Himachal gets extension on capital investment subsidy

Union Commerce Minister Anand Sharma Sunday announced that the capital investment subsidy on plant and machinery for the state would be extended by four years to accelerate the industrial growth of Himachal Pradesh.

"The capital investment subsidy has been extended till 2017," Sharma told reporters here.

The capital investment subsidy was one major component of a special industrial package offered to the state by the union government. While the package itself was withdrawn by the central government in March 2010, this component remained in force after that, but expired Jan 7 this year, official sources explained.

Likewise, Sharma announced a freight subsidy incentive for industry in the state. The same subsidy was earlier known as the central transport subsidy scheme.

Certain rules of the freight subsidy incentive have been relaxed to make it more liberal, Sharma said.

Sharma was in the state capital Sunday to hold consultations with state government functionaries on industrial development projects, especially those related to the ministries of commerce and industries.

He also announced central projects worth Rs.100 crore for the state.

A special package for industrial development in Himachal Pradesh was extended by the Atal Bihari Vajpayee-led National Democratic Alliance (NDA) government in 2003.

But the Congress-led United Progressive Alliance government curtailed it in 2007, before restoring it till 2010.

Chief Minister Virbhadra Singh met Prime Minister Manmohan Singh in Delhi in February this year and sought resumption of the special industrial package to boost industrial growth.

Officials of the industries department said the state had approved industrial proposals worth Rs.48,000 crore in the past 10 years, but got investments worth only Rs.13,000 crore.

The state got maximum investment from 2003 to 2010, when there was a special industrial package from the central government in force.

Most investments were in pharmaceutical, food processing, textile, packaging and light engineering sectors.