No incentives, investment down to a trickle in Himachal

Ambika Sharma

Tribune News Service

Solan, August 5

With no Central incentives available to the state industry, new investment has reduced substantially. Facing locational disadvantage and higher tariff, investors are not keen to come here without getting alluring financial incentives.

Industry wants scheme on lines of J&K

The industry had demanded a scheme on the lines of the New Central Sector Scheme, which cater to Jammu and Kashmir, from the Centre, but to no avail. — Rajeev Aggarwal, president of Baddi-Barotiwala-Nalagarh Industries Association

While Himachal Pradesh lacked in raw material for various industries, goods manufactured here had to be transported on a higher freight to other states, dissuading fresh investment.

“The move to create industrial parks in the private sector has not yielded the desired results, though the investors have been demanding setting up of such parks and zones with land on a subsidised rate,” Director, Industries, Rakesh Prajapati said.

Though the provision of setting up private industrial zones did figure in the state’s industrial policy, it had found no takers. The Centrally-sponsored Industrial Development Scheme (IDS) 2017, was closed abruptly in 2020 during Covid times. The investors who had registered provisionally failed to get the incentives as promised under the scheme, landing them in a financial mess. The IDS was the lone scheme that promised certain financial incentives to the industry in Himachal. Even the investors whose cases had been approved were yet to get their entire claims settled.

“No Central scheme has been announced for Himachal since the IDS was rolled back in 2020. Though the industry did demand a scheme on the lines of the New Central Sector Scheme that catered to Jammu and Kashmir, promising incentives to boost investment, from the Union Finance Minister, but to no avail,” rued Rajeev Aggarwal, president, Baddi Barotiwala Nalagarh Industries Association.

The lack of fresh investment has also affected the sale of industrial plots. No allotment of industrial plots has been done in the last six months in the state.

With state-specific levies like higher rate of electricity duty of 13 per cent, Certain Goods Carried by Road (CGCR) tax and Additional Tax burdening the investor, the future of industrialisation was grim as these levies added to the production cost, making manufacturing here uncompetitive. “These issues have been raised time and again before the state government, but to no avail,” lamented Aggarwal.

“The CGCR and ADT should be subsumed into the GST, which was introduced on the principle of one nation one tax in 2017,” Aggarwal added.

The state government has, on the contrary, enhanced the electricity tariff and revenue charges on land, having a negative impact on profit margin and expansion plans.