Himachal Faces Industrial Slowdown Blues, Plots Left Unsold

Shimla: With excise exemptions for new industry gone, pace of industrialization has slowed down in Himachal and sluggish demand for industrial plots has left a government undertaking saddled with unsold plots at its news estate.

At an industrial plot auction at Davni, in the industrial belt of Baddi-Barotiwala-Nalagarh (BBN) on Monday, Small Industrial Development Corp (SIDC) was able to sell only 2 of the 19 plots that were to go under the hammer.

Left with unsold plots, marketing officer SIDC, Anilesh Sharma said that demand for plots at their second industrial estate was low. “Only 2 of the 19 plots that were put up for auction were sold,” he said.

Prior to March 2010, when Himachal along with Uttrakhand were drawing full benefits of the industrial package, SIDC had made a complete sell out of 326 plots at the first industrial estate it had developed.

Projects coming up for principal approval at the high powered single window clearance authority headed by chief minister to has slowed down. While earlier there would be as many as three such meets of the authority in a month which has now trickled down to one.

Director industries JS Rana, however, denied any slowing down of industrialization. “Project proposals cleared at the last single window clearance meeting involved fresh investments of over Rs 800 crore,” he said.

Department sources maintained that most of the proposals cleared at the last meet were expansion plans of existing units, who have been allowed to avail benefits of ten year excise exemptions provided for under the industrial package.

“With the central government not only extending the industrial package in Jammu & Kashmir to 2017 but even increasing capital subsidy from 15 to 30 %,” said an industry department officer, “many are opting for setting up their units elsewhere.”

Downplaying the SIDC failed auction, Rana says that the corporation normally has plots of smaller dimensions whereas the industry department has a land bank for larger projects.

“Genuine investors are still evincing interest here for many reasons, which include uninterrupted power supply and industrial friendly environment. Only this month two large companies with an combined investment plans of over Rs 1300 crore have put forth their letter of intent with us,” he said.

Along with North Eastern states, Himachal, Uttrakhand and J & K were handed out a 10 year incentive driven industrial package in 2003, which included incomes tax holiday, capital subsidy and excise holiday. Under pressure from neighbouring states, excise holiday was withdrawn prematurely that ended in March 2010.

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