State expects more funds for Central schemes, industry

Neena Sharma

Tribune News Service

Dehradun, February 26

Despite discontinuation of the concessional industrial package in 2008, the industry sector continues to make a vital contribution to the gross domestic product (GDP) of Uttarakhand. In the present scenario, Uttarakhand has to brace up to the challenge of preventing flight of industries that had set up shop before the discontinuation of the package and also build a conducive environment to attract new investors willing to take risk and work with few sops.

To that end, in the run-up to the Union Budget to be presented on February 28, Chief Minister Harish Rawat, during the NITI Aayog meeting in New Delhi, had demanded allocation of more funds under the centrally-sponsored schemes. He had cited shortfall in funds for meeting the annual plan target.

Further, the state is looking for adequate funds for the upcoming Kumbh Mela and continuation of funding to complete the reconstruction work underway in the disaster-affected districts.

Condition of Industry

The Uttarakhand government recently revised the 2003 industrial policy to attract more investments and is also encouraging online approvals and tax payments to get rid of red tape. Further, with the release of the new Micro Small and Medium Enterprises Policy, small entrepreneurs are quite upbeat. With the Narendra Modi government focusing on encouraging small and medium size industries, the state expects some budgetary allocations to help it capitalise on this potential.

Other steps for improving industrial climate

Uttarakhand has introduced a statutory single window system and an online electronic clearance mechanism for time-bound approvals for investment proposals as one-stop facilitation centre for industries.

Hurdles

Poor connectivity 

Poor connectivity continues to pose a problem. The proposed 125-km Rishikesh-Karnprayag rail line is a key link for the state. It will pass through Dehradun, Tehri Garhwal, Pauri Garhwal and Chamoli districts, connecting Rishikesh to many pilgrimage spots, including Devprayag, Rudraprayag and Karnprayag. Efforts are on to expand infrastructure at the two airports at Jolly Grant and  Pantnagar. Efforts are underway to operationalise airstrips at Naini Saini in Pithoragarh, Gauchar in Chamoli and Chinayalisaud in Uttarkashi. These airstrips will provide the vital air connectivity to some remote locations of the state, giving a boost to tourism and other developmental activities. But the work will start only in the coming two to three years.

No food processing policy

According to a study by the Associated Chambers of Commerce and Industry of India, the food processing sector has the potential of raising the contribution of agriculture and allied activities to Uttarakhand’s GSDP from 13 per cent to about 25 per cent over a 10-year period. Hence, the state expects the Union budget to make some announcements to help it exploit this potential. 

Shortage of trained manpower

The new state lacks trained manpower. So far, its skill development mission has failed to achieve the target of training youth.  Skill development is one of the pet schemes of Prime Minister Narendra Modi, the state expects help from the budget in this regard.

Viable industries

Food processing

Policies should be framed to facilitate development of an agriculture and food processing industry in Uttarakhand. The state has two mega food parks - one in Haridwar and another in Udham Singh Nagar district — expected to get functional within next four years. 

Industries promoting clean, green energy

“Uttarakhand could take advantage of the Make in India programme and initiate clean and green energy projects. For example, companies that manufacture electric cars and other equipment should be promoted,” said Pankaj Gupta, president, Industries Association of Uttarakhand.

Green Bonus

It has been a major demand of the state. The budget will bring a lot of cheer with some positive announcement.

Clarity on Goods and Service Tax (GST)

The state has to be assured of its effectiveness and benefits. As the GST will replace VAT, there is  apprehension that the state will lose a major source of income. Infrastructure will get boost if cities from Uttarakhand  are selected under the smart city  project.

Financial health

Uttarakhand has registered impressive gains in the per capita income, which has risen to Rs 1.03 lakh in  financial year 2013-14, Rs 11,000 (approx)  more than the previous year (Rs 92,191). Besides the rise in the per capita income, the gross domestic product (GDP)  estimates  for 2014-15 are expected to remain at 9.34 per cent (national GDP is 7.4). The per capita income of the state for 2013-14 (advance estimate)   and 2012-13 (quick estimate)  is Rs 1.03 lakh and Rs 92,191, respectively, and for year 2011-12, it is estimated to be at Rs 85,372. The Directorate of Economics and Statistics  has estimated the GDP at 9.34 per cent for 2014-15, while last year it was 8.43 per cent. The   rate of industrial growth is expected to remain at 12.33 per cent for 2014-15. The growth rate for the agriculture and service sectors for the same period is expected to remain at 5.12 per cent and 7.85 per cent, respectively.