Tribune News Service
Ruchika M Khanna
Chandigarh, February 4
The Industrial and Business Development Policy, 2022, approved by the Cabinet yesterday is targeted at seeking new industrial investment in the state. However, the policy has failed to enthuse the industrialists, who feel left out from the incentives offered to new investors.
Rs 35K crore investment
- Sources said between March and December 2022, the state had attracted a fresh investment of Rs 35,486 crore
- This includes the plant being set up by Tata Steel in Ludhiana with an investment of Rs 2,600 crore
The previous industrial policy, which ended in October 2022, had allowed fiscal and other incentives to exiting industrial units. The new policy offers “incremental incentives” only for the expansion.
“With countries, including Vietnam, Indonesia and Thailand offering attractive incentives to industrialists, the export-oriented units are now talking of ‘options’ available to them. Labour and land is cheaper in these countries, besides their proximity to ports,” said Upkar Singh Ahuja, chief, Chamber of Industrial and Commercial Undertaking (CICU), Ludhiana.
“Punjab is a reasonable place to do business, with strong MSME clusters in auto and spare parts, hand tools, bicycles, yarn, sanitary fixtures and IT and ITeS in Mohali; and sports and leather goods in Jalandhar. There are five container stations in Ludhiana, but what lacks in the state is good infrastructure. The state government should commit to improve infrastructure for industry and create a more conducive eco system for existing industry,” he said.
Badish Jindal, president, Industries and Trade Forum, said incentives would be offered to existing units for only enhancing production capacities. “For example, the exemption in electricity duty to a new industry will be offered on its entire bill. But an existing unit will get the waiver only on the enhanced tariff for the expanded production. On the other hand, the new investors get investment subsidy by way of reimbursement of net SGST up to 200 per cent fixed capital investment. Where is a level playing field?” he asked.
Arvinder Pal Singh, one of the biggest basmati rice exporters in the state, said the incentives for units opting for expansion were missing in the policy. “Both the 2013 and 2017 industrial policies had brought us at par with new investors and we expanded our production capacities. The incentive to basmati unit is offered only if one sets up a new unit,” he rued. The policy offers 100 per cent exemption of market fees/RDF up to 100 per cent of fixed capital investment to new units.
RS Sachdeva of Punjab chapter of PHD Chamber, said though the Chamber had welcomed the policy, it would had been better if the government had helped the existing industry recover from the pandemic.
“We are still hopeful that the government will try and match the incentives offered by other states. They are offering a 40 per cent capital subsidy on plant, machinery and building, payable in four years,” he said.
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