Uttarakhand to review hill development policy

Two years after it was announced, the Uttarakhand hill industrial policy has failed to create an attractive business environment in the hill region of the state and entice manufacturing units., The policy aims to encourage the growth of small and medium enterprises (SMEs).

The government claims that micro and small units, mostly in the tourism sector, have been set up with a total investment of Rs 116 crore, but top officials admitted that a lot more needs to be done.

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 S C Nautiyal, additional director, industries, government of Uttarakhand.

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.

The government claims that it has also received investment proposals worth Rs 305 crore, but for certain reasons land could not be allotted to industries. Scores of these new proposals are for hotel resorts and spas at such key tourist sites as Tehri and Pauri.

“There is an urgent need to create a good business environment in the hills. But the response of the government is very 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.