Courtesy: PR DEPTT, HP GOVT
There is a tremendous scope for industrial expansion in Himachal Pradesh which is contributing nearly 15 percent to the State Domestic Product. In order to accelerate the pace of industrialization, the State Government has formulated an investor friendly Industrial Policy which is contributing towards sustainable industrial and economic development. The new Industrial Policy-2004 announced by the State Government specifically focuses on ensuring inter-sectoral co-ordination and planned industrial development throughout the State. It focuses on planned industrial development in industrially potential areas of the State and on uniform dispersal and promotion of industry throughout the State.
To ensure balanced industrial development and encouraging local enterprise, new focus areas such as agro-horticultural produce based industries, local resources based industry and development of rural industry, have therefore been identified and prioritized for focused development and accordingly an attractive package of incentives, concessions and facilities have been provided to them. In addition, certain activities complementary to growth of industry and having core comparative advantages have been identified and provided incentives at par with industry.
A Special Economic Zone is also being set up in the Kangra, Una and other districts of the State with an estimate cost of over Rs. 5000 crores. The units located in this economic zone could avail certain specific concessions and facilities like exemption from the payment of central excise duty, levies, specified taxes, relaxation in labour laws, which will ensure a strong competitive and comparative advantage to these industries. The new units are however eligible for the State incentives only if they employ at least 70 % of its total manpower whether on regular/contractual/sub contractual/daily basis or any other mode from amongst the bonafide Himachalis.
There are a number of fiscal incentives available to industrial units in the form of subsidies, concessional rate of electricity duty and deferment of the VAT depending on their locations. All the eight Tribal Development Blocks, 15 other backward Blocks and all the backward panchayats of the State have been included in "C" category area and they have been declared as Tax Free Zone and units located in these areas are exempted from the payment of Sale Tax/VAT and other levies for a period of 10 years. The units being set up in industrially potential border areas of Solan and Sirmaur Districts have been categorized as "A' block area and all the industries coming in this area are being provided with the incentive of deferment of VAT for a period of 5 years. In the other intermediate areas, which have been classified as "B" category area, the deferment of VAT is for a period of 8 years.
The concessional rate of Electricity Duty at the rate of 10 paisa per unit is being charged from new units located in category "B" and "C" area for a period of 5 years in respect of units with a connected load upto 100 K.W. Special incentives are being provided to special category of Entrepreneurs for setting up of Tiny and SSI units and also to thrust Sector industry. Incentives are not admissible to those industries, which are listed in the Negative List under the 2004 industrial Policy.
The efforts of the State Government to accelerate the industrialization has received further impetus with the notification of special package of incentives for Himachal by the Central Government on 7th.January, 2003. As a result of aggressive marketing of the industrial package throughout the country, a large number of project proposals have been received by the Department of Industries. About 6881 investment proposals from the entrepreneurs have been provisionally registered/approved for setting up of industry in SSI, Medium and Large Scale Sector till 31st March, 2006. These projects envisage an investment of about Rs.16870.98 Crores and are expected to generate employment opportunities for about 243729 people.
The Government has simplified procedures for approval of medium /large scale industrial projects. In order to ensure expeditious clearances, a State Level Single Window Clearance and Monitoring Authority had been constituted under the Chairmanship of Chief Minister to clear projects and ensure speedy approval from various departments and agencies.
The Committee has so far held 20 meetings and cleared 511 projects with an investment of Rs. 9872 crore and employment potential to about 71975 people. Thus as on today a total number of 32,666 Small Scale and 310 Medium & Large Scale industrial units with an investment of about Rs. 4175.37 crore which are generating employment for about 1.85 Lakhs persons are already running in the State. This package of the Government of India and new industrial policy-2004 announced by the State Government has also benefited existing industry, as these units on substantial expansion will be able to avail incentives being made available to new industrial units.
As a result of this, the State now has the traditional Industrial Sector on one side and the most modern factories on the other side contributing towards the economic prosperity of the State.