Industrial growth in Punjab on the decline
Even as the Badal government made tall claims of attracting big-ticket projects and huge investments from across the country, the growth rate in the industrial sector in the state for 2013-14 has been still crawling at 2.55%. This growth rate in the industrial sector has been abysmally low since 2009-10 when it was 8.77%.chandigarh Updated: Jul 17, 2014 08:02 IST
Even as the Badal government made tall claims of attracting big-ticket projects and huge investments from across the country, the growth rate in the industrial sector in the state for 2013-14 has been still crawling at 2.55%. This growth rate in the industrial sector has been abysmally low since 2009-10 when it was 8.77%.
It appeared that the economic recession had hit not only Punjab but was a global phenomenon as the growth rate of the industrial sector of India has also touched an all-time low in 2013-14 with just 0.35%. The national industrial growth rate was 9.16% in 2009-10.
On the brighter side, however, Punjab has been witnessing an increase in the contribution of industrial sector in the Gross State Domestic Product (GSDP), thus reflecting its growing importance in the state’s economy.
The contribution of industrial sector in the GSDP for the year 2013-14 is 28.31% which though is higher than the national percentage for the same period but lower than that of Gujarat, Rajasthan, Odisha and Tamil Nadu.
Despite being a border state Punjab stands sixth in terms of the number of factories in India. At the same time, 177 factories have closed down during the 2011-12 fiscal showing a decline of industry in the state. As per Annual Survey of Industries (ASI) collected every year by National Sample Survey Organisation, factory units have gone down from 12,770 to 12,593.
The maximum capital investment in the factories is in Gujarat where the capital investment touches Rs 4,57,052.65 lakh; whereas in Punjab it is just Rs 67,845.1 lakh.
According to the annual report of 2012-13 of the union ministry of commerce and industry, during 2012 the Punjab government implemented just six Memoranda of Understanding (MoUs) signed with various sectors of industry worth Rs 1,042 crore, which is barely 1.26% of the total industrial investment made across the country.
Gujarat, on the other hand, implemented 153 MoUs and invested Rs 49,616 crore in various sectors, nearly 60% of the total investment, followed by Andhra Pradesh and Maharashtra, which attracted 19% of the total industrial investment.
The Punjab government, in order to reach out to the industrial investors across India, had organised the two-day Progressive Punjab Investors’ Summit in 2013. During the summit, MoUs were signed with 117 companies proposing an investment of Rs 65,000 crore in the state in sectors such as agro and food processing, biosciences and health care.
During his budget speech, finance minister Parminder Singh Dhindsa said that to accelerate industrial and economic growth the state government had notified an incentive package under fiscal incentives for industrial promotion 2013.
“The package provides benefits on VAT and CST, stamp duty, property tax, electricity duty exemption besides additional incentives for specific sectors such as food processing, textiles and information technology,” said Dhindsa, adding that the Punjab government would strengthen and upgrade the existing skill training infrastructure and would partner with reputed private institutes so that the unemployed youth got easily absorbed in various industrial sectors.
Co-chairman, Punjab committee, PHD chambers of commerce and industry, RS Sachdeva welcomed the skill development initiatives of the government.
“There is an urgent need to maintain and upgrade industrial areas and focal points and the state government must address the issue on priority,” said Sachdeva, while asking the government to review the iron and steel sector, which was put in the negative list of industry in the state industrial policy, so as to enable the sector to attract new investments.
Chairman, CII Punjab State Council and managing director Ralson India Limited, Sanjeev Pahwa said no new budgetary announcements or allocations had been done to promote new or existing industry on the pretext of the provisions announced in the newly released Punjab Investment Policy-2013. Pahwa hoped the government would implement the provisions of its new industrial and investment policy-2013 in letter and spirit.