M A I N   N E W S

No space for industry in Punjab
* When land is found, it’s costly
* Conversion charges prohibitive
Ruchika M Khanna/TNS

Chandigarh, April 21
Unavailability of land, its high cost - when available - and inordinate delays in clearance for change in land use (CLU) have meant that Punjab has not attracted any large industrial investment for over two years.

Industry from outside prefers to set base in surrounding hill states, as these allow them huge tax concessions. The local industry is going to Haryana, Madhya Pradesh, Maharashtra and even Gujarat.

In the recent past, the only large investment in the state has been in the Guru Gobind Singh Refinery at Bathinda.

Efforts on to create land pool: Govt

Principal Secretary Industries Punjab SS Channy admitted that the high cost of land and its unavailability in the major industrial towns was a hindrance in attracting industrial investment. “We are making several efforts to solve this problem. Many small units have been allotted land in industrial focal points in the off-the-shelf scheme. We are also creating a land pool in Kapurthala (260 acres), Ropar (300 acres near IIT), Rajpura (1,400 acres) and Bathinda (1,500 acres),” he added.


  • Industry says that there are inordinate delays in clearance for change in land use
  • Punjab government’s New Industrial Policy had promised setting up of a land bank at concessional rates to the industry. However, the scheme has failed to take off
  • Though the state govt has a policy to allot land off-the-shelf, industrialists rue lack of transparency in the scheme

Leading industrial groups in the state like the Vardhman Group and Trident Industries have preferred to migrate to not just to the tax havens of Himachal Pradesh and Uttarakhand, but also to Haryana, Madhya Pradesh, Gujarat and Maharashtra, where land is much cheaper.

So, the contribution of industry to the state’s Gross Domestic product (GSDP) has been falling. The Punjab government says that manufacturing sector contribution grew 11.99 per cent in 2009-10. However, this resulted from the low base that this secondary sector contributed in 2008-09.

The Punjab government claims that it has approved mega industrial projects entailing investment of thousands of crores over the last five years. However, a majority of these projects have failed to take off, and the state has failed to see the benefits of these (proposed) investments. There is hardly any land available to set up big industrial units.

Though Punjab government’s New Industrial Policy had promised setting up of a land bank at concessional rates to the industry, the scheme too has failed to take off.

When land is available, it is very expensive. A CII report said that the estimated cost of industrial land in Mohali was $35.42 per sq m, $17.71 per sq m in Ludhiana and $11.10 per sq m in Amritsar. Adding external development charges and licence fee, and land in Mohali costs approximately Rs 3.50 crore per acre.

“In case one finds cheap land, it will not be a part of the industrial zone. Getting a CLU is a very

long-drawn process. Land availability is the biggest problem that thwarts growth of industry in the state,” said Amarjit Goyal, CMD, Modern Steels, Mandi Gobindgarh.

Though the state government has a policy to allot land off the shelf, industrialists rue lack of transparency.

“If land is allotted in a transparent manner through this scheme, industry would get land at Rs 2700- Rs 10,000 per sq meter in different cities. In comparison, the market price of land is around Rs 15,000 per sq m, which increases the project cost and desists industrialists from making investment,” said RS Sachdeva, co chairman, Punjab committee, PHD Chamber.

Sachdeva added though he had a CFL lamp manufacturing unit in Baddi, he wanted to expand in Punjab. “Getting land allotted is a tardy process. When all other state governments like Madhya Pradesh woo industrial investment by offering land at just Rs 5- 10 lakh per acre, besides all support in getting CLU, why would one want to expand in Punjab,” he reasoned.

(To be concluded)





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