Hill industrial policy finally gets impetus

Three years after it was announced, the Uttarakhand hill industrial policy is slowly picking up momentum in the state.

The policy aims to encourage the growth of small and medium enterprises (SMEs), with the government claiming that small units entailing an investment of Rs 259 crore have been set up.

According to official sources, a total of 643 units were set up in 2008-09 with an investment of Rs 58.49 crore which created 2,225 jobs. In 2009-10, a total of 706 units were set up entailing an investment of Rs 115.72 crore. This created 2,797 jobs. In 2010-11, nearly 827 units were established with an investment of Rs 68.94 crore creating employment for 2,738 persons.

In the current financial year till June, a total of 186 units have been set up with an investment of Rs 15.8 crore creating employment for 520 people.

These industries were set up mainly in floriculture, herbal, food processing, hotels, packaging, mineral water, handloom, pharma, steel fabrication and auto repairing sectors, officials of the department of industry told Business Standard.

“After initial hiccups, the policy is slowly picking up momentum now,” said S C Nautiyal, additional director industries.

After facing criticism, the government has now decided to hold periodic review meetings. “Through these reviews, we will try to give a fresh impetus to the hill development policy,” said Nautiyal.

Under the hill industrial policy that came into effect on April 1, 2008 — which offers a slew of sops, including heavy transport subsidies —only a couple of manufacturing units have been set up in the hills so far.

However, industrialists are not satisfied with the government's current policy. “There is an urgent need to create a good business environment in the hills. But the response of the government is indifferent,” claimed Pankaj Gupta, president of the Industries Association of Uttarakhand (IAU), an organisation of SMEs.

Several factors, such as the lack of a land bank, expiry of the term of the concessional industrial package (CIP), the bleak power scenario and bureaucratic hurdles are said to be rendering the policy ineffective. There is no transport subsidy in case the raw material is brought from outside the state.

Another reason that has hampered industrial growth in the hills is the expiry of the concessional industrial package on March 31. Despite the state government’s repeated requests to the Centre to extend the package, the Centre has maintained a silence on the issue in the wake of opposition from neighbouring states like Punjab, Haryana and Uttar Pradesh.

Under the special integrated industrial promotion policy of 2008, the government offers sops like up to 90 per cent rebate on value-added tax (VAT), exemption from stamp duty, heavy transport subsidy and a rebate on power tariffs.

The government is also looking for new entrepreneurs venturing in eco-tourism, adventure sports and the service sectors, who can take advantage of the new policy.

With the aim of attracting small units, the government is offering sops for a period of 10 years under the new hill industrial policy.