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Industrialists
have demanded that the upcoming policy should have
provisions like a dedicated land bank for industries, a
freight subsidy, abolition of entry tax and
rationalisation of taxes, better infrastructure, among
others.
The
faulty tax structure of the state is the cause of concern
for all the stakeholders. High rate of taxation in the
form of infrastructure cess, rural development fund,
market fee, rationalisation of power tariff are the issues
the industry expects the state government to address.
Speaking
to Business Standard, SC Ralhan, regional chairman of the
Engineering Export Promotion Council, said: “The
government must create land bank for the industries and
create new focal points. In the absence of land bank, the
industries are coming up in a haphazard manner.
Moreover,
the land is too expensive which prohibits the
industrialists to set up their bases in Punjab.”
He
added: “Punjab has a disadvantage of location, so the
government must introduce fright subsidy to facilitate the
manufacturers. Also, the government must reduce VAT on
commercial gas from 12.5 per cent to 4 per cent.”
Further,
to encourage the usage of gas in industries the government
should offer them a capital subsidy of Rs 5 crore, Ralhan
said.
“Besides,
timely refund of VAT is also one of our key agenda which
should be taken care of in the industrial policy, he
added.
The
food processing industry, the backbone of Punjab’s
agrarian economy, has also been reeling under the tax
structure that makes it unviable. According to AP Sharam,
former president of the Solvant Extractors Association of
India, “The food processing industry survives on the
wafer thin margins. The revision of infrastructure cess on
the inputs, which was from 1 per cent to 2 per cent in
2007, and to 3 per cent in September 2008, has severely
undermined our bottom lines,” he said.
VK
Goyal, chief executive, Vardhaman Spinning & Ginning
Mills (Ludhiana) said: “The government must abolish the
entry tax on cotton which is being charged at 4 per cent.
Also, Punjab charges an 8.5 per cent tax on cotton
excluding entry tax, which makes our product costlier than
that of other states.”
The
upgradation of infrastructure Power, Roads air
connectivity and formation of group of eminent
industrialists to consistently review the competitiveness
of the industries is also one of the demand of the
industrialists.
As
the global meltdown had seriously impacted exports of
textiles, handtools, garments, hosiery and steel products
from the State, the government must focus aggressively to
boost these sectors.
Apart
from these demand, Industrialists demanded and suggested
that is need for PPP in the building of roads and
airports, focus on food processing sector, crop
diversification, backward linkages with the farmers,
vocational industrial training, reforms in governance,
strengthening of delivery mechanisms, reduction in
transport costs, abolition of mandi tax, and accent on
health and education sectors.
It
is worth noting that The UNIDO review report would form
the basis of the new industrial policy. The review report
had cited high land prices as one of the biggest
obstructions in the state’s industrial growth. Dr. Isher
Judge Ahluwalia said the report identifies the main
ingredients for industrial take-off in Punjab as natural
resource development, infrastructure development to
overcome the locational challenge, human resource
development and creation of a investor-friendly business
environment.
Some
of the major thrust areas mentioned in the Report are:
synergy between agriculture and industry – textiles,
agro-processing, synergy between small scale and large
scale sector, rejuvenating the small scale sector –
auto-components, garments, leather, attract investments in
large scale sector – automotive, textiles, food
processing, which will build links with small scale sector
and / or agriculture, promoting knowledge-based
industries, Biotechnology, IT and IT-related sectors etc.
Source
: Business Standard - Mumbai, Maharashtra, India, dated
08/01/2009
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