Power pangs spell trouble for industry
Naveen S Garewal
Tribune News Service

Chandigarh, December 25
The Punjab Government has unsuccessfully tried to stop the flight of industry from Punjab to neighbouring states that provide a better infrastructure and cleaner business environment. With no immediate relief to power cuts, the Punjab industry has nothing to look forward to the coming year when the power position is unlikely to improve any further.

Despite Punjab’s new industrial policy announced this year to attract investment, there is hardly any optimism in the business circles.

Though the new industrial policy has targeted IT and agro sectors, there is no way the government can provide the required power to these sectors. The announcement about doing away with the mandatory requirement of change of land use for using agricultural land for industrial purpose, there has been some increase in real estate value but this hardly come as a booster for the industrial investment.

The current year has seen Punjab’s industry facing unscheduled and long power cuts, restriction on peak load hours and weekly load shedding. Besides, there has only been a promise of an “inspector free raj”, but this is yet to be implemented on ground.

Punjab’s new industrial policy announced this year has been in the pipeline for long, which was drafted after seeking suggestions from the United Nations Industrial Development Organisation. The thrust of the new industrial policy-2009 is to facilitate potential investors, mainly in the private sector and under the PPP mode, create dedicated fund for the development clusters, common facilities centres and providing infrastructure support under the initiatives of the Centre and the state government.

The Punjab Cabinet has already cleared the one-time settlement scheme for the revival of sick units in the state, besides helping in debt restructuring.

To further help the industry become competitive in comparison with the neighbouring states, Punjab has given several concessions to information technology and other industry. This includes exemption from stamp duty and registration fee for IT industry that can now be set up in residential areas as well. Further VAT on all IT products rationalised to be on a par with the minimum floor rate of 4 per cent.

For the agro sector, Punjab has decided to provide a subsidy on interest at the rate of 5 per cent for 5 years, subject to a ceiling of Rs 20 lakh per year per unit. Further a dedicated fund of Rs 150 crore per annum has been created for creation and upgradation of industrial infrastructure and for contribution as state share in Central schemes like cluster development, common facility centres, R&D, etc. Some of the money spent from this fund could see some improved infrastructure available to the industry in the coming year.

The Railway Ministry has announced its plan to connect Ludhiana with Kolkatta through freight corridor, which will help trade in the state. Punjab is demanding the extension of this corridor up to Amritsar so that trade could improve with the CIS nation linked with the Rajasansi International Airport at Amritsar.

If that happens, goods produced in Ludhiana, Amritsar and other industrial hubs of Punjab could see a rapid rise in export volumes. However, this too may not become a reality during the coming year.

Punjab has set up special boards for the promotion of trade and industry through which a capital subsidy of Rs 250 crore has been disbursed to industrialists, besides giving major concessions on VAT and turnover tax worth over Rs 300 crore.

However, none of the major projects or power generation units or even Bathinda Refinery is expected to become functional during the next year.