Investment hopes: Year on, only part of dream realised
It has been a year since Punjab was projected as the best business destination at the Progressive Punjab Investment Summit in order to attract big-ticket projects. But things apparently have not panned out the way the government intended them to be.chandigarh Updated: Dec 10, 2014 20:26 IST
It has been a year since Punjab was projected as the best business destination at the Progressive Punjab Investment Summit in order to attract big-ticket projects. But things apparently have not panned out the way the government intended them to be.
During the two-day summit organised at Mohali on December 9 and 10, 2013, led by Punjab deputy chief minister Sukhbir Singh Badal, where corporate heads had descended from all over the country, the SAD-BJP government had claimed that it had been promised investments worth Rs 67,000 crore.
But one year after, the state has been able to attract only Rs 8,200 crore.
The government had even coined a new term while inking the memorandum of understanding with the interested parties calling it a memorandum of commitment.
As of today, 144 business houses have expressed interest in setting up shop in Punjab of which 54 projects have been given the go-ahead while 12 are awaiting clearance.
The government claims to have attracted investment primarily from agro and food processing, manufacturing, tourism, solar power, health and biosciences, and IT sectors.
Punjab Bureau of Investment Promotion (PBIP), which functions under direct supervision of Sukhbir, gloats over its efforts of bringing in a little over 10% of investments of what was promised during the summit, terming it to be a good beginning.
‘Done little’ for existing industry
The government, however, has drawn flak for “doing too little” for the exiting industry in the state. Some industrialists are of the view that the government has done virtually nothing for cycle parts and hosiery industry in Ludhiana, sports industry in Jalandhar, iron and steel industry in Mandi Gobindgarh and the sewing machine industry in Batala. They say that Trident and Oswal groups have even set up their units in Madhya Pradesh, adding that there is no plan with the government to develop, upgrade and transfer technology, human resource training and skill development. As a result, the existing industry is dying, they rue.
Punjab Governance Reforms Commission chairman Dr Pramod Kumar, who has recommended a number of industrial reforms, says though it is good to attract new industry, not enough is being done to save the existing one. The government must have a plan to provide incentives to the industry for upgrade and transfer of technology, human resource training and development and mechanism for pollution management, he adds.
In November, when PBIP CEO Anirudh Tewari and former principal secretary Karan Avtar Singh went to Karnataka and Maharashtra on the directions of Sukhbir to woo investors, some of the industrial representatives wanted that the Punjab government provide them free-of-cost land for setting up units.
On the various fiscal incentives being provided by Punjab, the representatives were of the view that those were no different from the ones provided by the other states. They also suggested that Punjab should build industrial clusters on the pattern of Maharashtra, especially the way the pharmaceuticals and textile industrial parks had been set up.
Starting of process
According to Sukhbir, he started the laborious process of inviting investment to Punjab about two years ago. “First, we drafted a new industrial policy in which a number of tax incentives were offered, including that of VAT retention, to those who either plan to set up new units or have expansion plans. I also introduced the single-window system for the convenience of industrial houses to get all important clearances under one roof without any bureaucratic hassles,” says Sukhbir.
“My aim is to create IT, Medi and Edu cities in Punjab with top institutes setting up their units here. I would also want Mohali to establish as a base for research on varied subjects besides it being a hub of biosciences,” he adds.
Sukhbir admits that providing land to industrial houses is an issue of concern. He says the government has already earmarked a few thousand acres of land at Dera Bassi and Rajpura near Mohali to resolve the issue. “This is just the beginning. By next year, one would see a paradigm change as the state is likely to attract many more projects,” he adds.
Cong not convinced
But state Congress president Partap Singh Bajwa is not convinced. He says Sukhbir has a style of beginning the things with a bang, only to end in a whimper, and this is what happened with the much-hyped progressive Punjab summit.
Bajwa says, “The basic problem with the Badal government is the trust deficit. The investor is always the best person to assess the situation before making big investment. Like water, investment has a natural flow. One of the problems is the business interests of the Badal family.
Sukhbir, who himself is a hotelier, took along a group of investors to offer an island in the Ranjit Sagar Dam Lake to build a tourist complex. How come he himself is not coming forward to invest in the project? How come the family is not investing in any big-ticket projects in the state? This riddle provides the answer to the failure of the investment summit. Badals themselves are not sure of the returns. How can you then persuade others to invest in the state?”
But, not everyone is critical of the government as Amul India managing director RS Sodhi, Achyut Iyengar of Cargill India that is setting up a feed plant, and Sachid Madan of ITC were all praise for the single-window system, saying they had got important clearances done in 15 to 45 days without any hassle.
Rajesh Salwan of DSM India says the company is setting up a pharmaceutical unit near Rupnagar and plans to set up a renewable energy project with the help of Punjab Energy Development Agency. “We are happy with the set-up. If the government can provide us uninterrupted power supply at competitive rates and set up waste treatment plants, it will be of immense help,” he adds.
How things have panned out
The state has received 144 applications, primarily from agro and food processing, manufacturing, tourism, solar power, health and biosciences, and IT sectors.
ITC Limited, Amul, Cargill India, Mahindra Agro, International Tractors, Nahar Spinnings, Sportking, Amarsingh Chawalwala (Lal Quilla), Ranbaxy, Khanna Papers, DSM Sinochem, Vardhman, Garg Acrylics, solar power projects (more than 100 MW)
What they say
We have offered a number of tax incentives to investors. This is just the beginning. By next year, one would see a paradigm change as the state is likely to attract many more projects. Sukhbir Badal, deputy CM.
How come the family (with business interests) is not investing in any big projects in the state? When Badals themselves are not sure of the returns, how can you persuade others to invest? Partap Bajwa, state Cong chief.
I am all praise for the single-window system started by the state government. When we applied for investment, We got all important clearances done in 15 to 45 days without facing any hassles. Sachid Madan, ITC agri director.
Not enough is being done to save the existing industry. The government must have a plan to provide incentives to the industry for upgrade and transfer of technology. Dr Pramod Kumar, chairman, Punjab Governance Reforms Commission.