Year-on-year increases in the number of new micro, small and medium enterprises (MSMEs) set up in Uttarakhand over the last four years show that the hill industrial policy is slowly yielding results in the state.
The policy came into effect in 2008 to encourage the growth of MSMEs. The government claims that between then and June this year, more than 3,000 small (mostly micro) units, entailing an investment of Rs 400 crore and employing an estimated 12,000 people, have been set up.
According to official data, the number of units set up rose from 643 in 2008-09 (the first year of the policy) to 706 in 2009-10, 827 in 2010-11 and 911 in 2011-12. The investments made increased from Rs 58.49 crore in 2008-09 to Rs 115.72 crore in 2009-10, fell steeply to Rs 68.94 crore in 2010-11 (mainly because of torrential rains, landslides and floods in the hills), and rose again to Rs 105.63 crore in 2011-12. Until June-end in the current financial year, investments of Rs 40 crore had been made.
The number of jobs created were 2,225 in 2008-09, 2,797 in 2009-10, 2,738 in 2010-11, and 3,077 in 2011-12.
These units were set up mainly in floriculture, the herbal sector, food processing, hotels, flour mills, packaging, mineral water, handlooms, pharmaceuticals, steel fabrication and auto repair, officials of the department of industry told Business Standard.
“After some initial hiccups, the policy is slowly picking up momentum now,” said S C Nautiyal, Uttarakhand’s additional director, industries.
After facing criticism, the government last year brought in a series of amendments to give an impetus to the hill development policy. However, industrialists are still not satisfied with the government’s current policy. They say there is an urgent need to create a good business environment in the hills.
Several factors — such as the lack of a land bank, expiry of hill-based tax incentives, the bleak power scenario and bureaucratic hurdles — are said to be stumbling blocks to the success of the policy.
And yet, it has been able to attract investments of Rs 400 crore during the past four years. Under the special integrated industrial promotion policy of 2008, the government offers sops such as a rebate of up to 90 per cent 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 to set up ventures in eco-tourism, adventure sports and the service sectors, who can take advantage of the new policy.