MP firms bear brunt of policy changes

Industries in Madhya Pradesh are on the verge of closure due to the poor execution of industrial promotion policy by the local government, as a result of which, more than half of small and big businesses (55-60 per cent) in the state have downed shutters. Steel, cement, soya, textiles, automobiles and chemical industrial units, are fast becoming sick.

Major industrial towns of the state such as Indore, Pithampur and Dewas, have witnessed the weakening trend. Above 250 small industrial units in Pithampur have stopped operations.

Only a few big and medium-scale businesses continue to run, that too, with poor infrastructure. Now that the small units have ceased operations, the big ones would be forced to source equipment and tools from outside the state.

Moreover, the last 15 years have seen frequently changing industrial policies, as well as formulations of new ones. However, none proved to be effective to promote the industries.

Abolishment of 25 per cent subsidies, which was granted by the Centre to large and medium-scale industries, is the main reason why the sick industrial units are dying in the state.

To make matters worse, the state government too, has stopped its Rs 5 lakh subsidy for small industry players. Power shortages also severely affected industrial growth in the state.

Currently, the state does not have enough power for industries and at the same time, it has hiked power tariffs. The current shortage is of 1800 mw.

The state also lacks proper infrastructure, which is required for proper industrial growth. Madhya Pradesh covers 9 per cent of the total area of the country.

The road density is much below the national average of 23.51 km per 100 km. Total length of the state's highways and roads comes to just around 8,099 km and 11,051 km respectively.

The more-than-a-decade experience has lead the state government to form a panel consisting of industry and commerce minister Babulal Gaur, energy and PWD minister Kailash Vijayvargiya and finance minister Raghav Ji, to formulate a new industry policy.

The current government withdrew its stand from the industrial promotion policy made on June 30, 2004. However, till the new policy comes into play, industries will continue to suffer.