Once considered goldmines, industrial plots in Uttarakhand are losing their sheen as a result of industrial stagnation.
After the industrial boom of the past few years, the demand for industrial plots in the hill state is declining in view of the growing shortage of power, as well as the expiry of the area-based exemptions that had attracted companies to set up shop. Experts said there had been a fall of 25-30 per cent in the sale of industrial plots during the past six months alone.
The expiry of full excise exemption, a key component of the concessional industrial package (CIP) of 2003, has jeopardised further industrialisation.
Scores of companies which had earlier approached both the government and private developers to buy industrial plots in the Garhwal and Kumaon regions are now backing out. The situation is particularly bad in the Sitarganj industrial estate, where only 94 units have been able to start production so far out of a total of 330 allotments until March 31.
Of this, only 46 units are under construction and the fate of the others is not known. The government is also hesitant to develop two more industrial estates in the Kumaon region, which has been proposed by SIDCUL (State Industrial Development Corporation of Uttarakhand Limited), because market conditions are not conducive.
In 2005-06, land prices at the key industrial estates of Pantnagar and Haridwar were hovering at around Rs 500 per sq mt. Within a period of two-to-three years, prices shot up as high as Rs 4,500 per sq mt in Pantnagar. To buy a 1,000 sq mt plot, the companies would have to shell out Rs 45 lakh in Pantnagar, government sources said.
Likewise, land prices at Haridwar rocketed to Rs 3,800 per sq mt. The price of land has also shot up in the Siggadi growth centre at Kotdwar and in Pharma City at Selaquie. All these industrial estates have been developed by SIDCUL.
However, prices are not so high in the private sector, where 47 industrial estates have been developed so far. Before the expiry of the excise incentive, the prices of industrial plots had touched Rs 3,000-4,000 per sq mt. Now it is expected that prices will fall to Rs 1,500-2,000 per sq mt, since the excise part of the CIP has not been extended by the Centre.
Despite the slump, however, a few players continue to develop industrial estates even now. Arrow Infra, an arm of the Munjal family-promoted Hero group, is the latest entrant in the business. The company is developing two industrial estates in Haridwar district.
