PSIEC enhancement pendency: Industry body demands immediate resolution
Due to this long-pending issue, industries in Phase-8 are unable to obtain financial assistance, resulting in stagnation and slowed growth
The industrial sector in Focal Point Phase-8 is grappling with severe challenges due to the Punjab Small Industries & Export Corporation (PSIEC) enhancement pendency, which has stalled all financial transactions and hindered industrial growth. Banks and financial institutions demand a clearance certificate from PSIEC, preventing industries from securing loans or expanding operations. As a result, industrialists are unable to leverage the Invest Punjab policy, which was introduced to facilitate industrial growth in the state.
Recognising the urgency of the matter, a delegation from the Federation of Industrial and Commercial Organisation (FICO), led by president Gurmeet Singh Kular and vice-chairman Vipan Mittal, met Punjab’s industry minister Tarunpreet Singh Sond and principal secretary industry and commerce, Tejveer Singh. The delegation submitted a memorandum, urging the government to resolve the pending Phase VIII enhancement issue immediately.
The controversy dates back to a PSIEC notice issued a few years ago, demanding ₹249 per square yard from Focal Point Phase-8 allottees. The amount was later settled at ₹24 per square yard. However, in an unexpected move, PSIEC reissued a demand of ₹474 per square yard, despite already charging 100% anticipatory enhancement. Now, with interest and additional charges, the cost has skyrocketed to around ₹2,500 per square yard, which industrialists argue is unjustified and unviable.
FICO members demanded the immediate waiver of penal interest, citing that PSIEC is charging a staggering 21% interest rate, while the average bank rate does not exceed 7%. The delegation has urged the government to introduce an “Amnesty Scheme” to settle the issue permanently.
Due to this long-pending issue, industries in Phase-8 are unable to obtain financial assistance, resulting in stagnation and slowed growth. Industrialists have also raised concerns that existing policies favour new investments while neglecting the survival of established industries.
According to Kular, the latest industrial policy of Punjab includes a clause requiring an additional 50 percent investment in fixed capital for industries to avail incentives. However, industrialists argue that this requirement should be abolished, and incentives should be provided based on any investment made in fixed capital, allowing for multiple-time incentive benefits.
“The government should encourage inter-state competition instead of fostering competition within the state, which is counterproductive,” said Kular.
Further he added that Punjab has introduced “green stamp papers” for industries to expedite project approvals. Despite obtaining these papers, they still need clearances from multiple departments, making the approval process cumbersome and inefficient.
