Investors want key issues like infra, connectivity addressed

In a bid to enhance industrial competitiveness in the state, investors expect the Union Budget to address key policy interventions on pressing issues like taxation challenges and infrastructure gaps.

Himachal Pradesh CII Chairman Navesh Narula and Vice-Chairman Deepan Garg voiced their concern against the Certain Goods Carried by Road (CGCR) Tax and Additional Goods Tax (AGT), which continue to be levied despite the implementation of the Goods and Services Tax (GST).

“In industries such as cement and plastics, double taxation has significantly increased operational costs. CGCR is charged twice in cement production, first on clinker and then on the final product. Similarly, AGT on plastic granules results in double taxation of Rs 0.56 per kg, increasing costs for the manufacturers. These taxes are an unnecessary financial burden on industries and should be subsumed under the GST to enhance competitiveness,” asserted Navesh Narula.

CII also emphasised the need for better infrastructure and connectivity, particularly in a landlocked state like Himachal Pradesh where logistical constraints and recent flood damage have disrupted industrial activities. They stressed on the construction of a 500-m road connecting the Kamli Industrial Area (Parwanoo) with the Himalayan Expressway. "Strengthening road and rail connectivity is essential for sustaining industrial operations and attracting further investments,” said Deepan Garg.

Investors also urged the Central Government to prioritise key railway projects, including the Chandigarh–Baddi Rail Link and the Chandigarh–Kala Amb–Paonta Sahib–Dehradun Rail Link, which would significantly improve transportation for industries.

“The CII has also recommended the extension of the Chandigarh Metro to Baddi, which would integrate the industrial town with the larger regional economy, ease workforce mobility, and reduce transportation costs,” observed Narula.

Rajiv Aggarwal, president of the Baddi Barotiwala Nalagarh Industries Association which is a conglomerate of more than 500 industries, stressed on formulation of a dedicated policy for micro, small and medium sector enterprises besides the rehabilitation of sick MSMEs by introducing a one-time settlement scheme for the sick units.

Himachal Drugs Manufacturers Association president Dr Rajesh Gupta demanded a re-look at the 43 B section of Finance Act, 2023, as it created hurdles in the growth of small and medium sector enterprises. It stipulates that any sum owed to MSMEs for goods supplied or services given may be deducted in the same year if it is paid within the stipulated deadline.

“Small and micro enterprises (SME) needs good environment and interest subvention of 5 per cent on their existing and upcoming loans, besides a reduction in the interest rate rather than availing subsidies due to heavily burdened interest cost,” said Gupta.

“The government should re-examine the maximum retail price related hurdles posed by the National Pharmaceutical Pricing Authority which controls price of medicines as well as lack of control on the price of raw materials like active pharmaceutical ingredients, along with import-related complications, to ease the problems of the pharmaceutical sector,” added Gupta.