When Uttarakhand MSME minister Harish Durgapal recently reviewed the progress of the Prime Minister Employment Generation Programme (PMEGP) in the flood-hit state, he was more than satisfied.
After deliberations with entrepreneurs, Durgapal is confident that the MSME sector is the only sector that can reduce growing unemployment in the state, especially in the wake of the mid-June deluge that devastated the five districts of Rudraprayag, Chamoli, Uttarkashi, Bageshwar, Tehri and Pithoragarh.
"The migration of the youth can only be stopped by the MSME sector in the hills," said Durgapal. During the past five years, the hills of Uttarakhand have witnessed investments worth Rs 570.95 crore through 4,873 units under the special integrated industrial promotion policy of 2008 for hilly and remote areas.
Until 2008, the hills of Uttarakhand were virtually devoid of MSMEs, total investment amounting to only Rs 25.25 crore. But once the hill promotion policy was introduced, investments grew sharply. Some 643 units were set up in the first year (2008-09) with an investment of Rs 58.49 crore, creating jobs for 2,225 people. In 2009-10 investments almost doubled, reaching Rs 115.72 crore through 706 units.
The first problem came in 2010-11 when the state was badly affected by heavy rains, floods and landslides. MSME growth hit a roadblock, with investments coming down to Rs 68.94 crore, though 827 units were set up.
But following the deluge of mid-June 2013, Uttarakhand witnessed the worst floods in recent memory. Initially, it was thought that thousands of MSMEs had been affected. But Durgapal did not buy this claim. "We think there was not much damage to the MSME sector in the hills," said Durgapal.
Until November 2013, investments had already reached Rs 62.77 crore through 763 new units, providing employment opportunities to nearly 2,690 people. These are the latest figures released by the state's MSME department to show that there wasn't much damage. "We must forget the floods and move ahead to take a positive approach," said Durgapal.
The hill promotion policy which was introduced by the former chief minister, B C Khanduri, for a period of ten years is now available until 2025, following a series of amendments. Entrepreneurs setting up new units will get all the incentives like transport subsidy and price purchase preferences for 10 years in case they start production by 2015. For units set up in 2016, the incentives will be available for nine years, and so on.
The policy envisages a subsidy on fixed capital investment in building, plant and machinery at the rate of 25 per cent. The maximum permissible capital subsidy of Rs 30 lakh has now been doubled to Rs 60 lakh. Enterprises that are going in for sizeable expansion by increasing either investment or output by more than 25 per cent will also be entitled to all the benefits under the policy.