Industrial Demands

  • FG Bureau
  • India
  • Jun 12, 2015

Even as the (Draft) Industrial Policy of Haryana takes on board suggestions and readies itself for a rollout, its focus is clear: industry has to progress in the State, and the thrust would come from medium and small enterprises. Entrepreneurship is the new plank on which the State’s economic development will rest. The creation of new enterprises will be essential to building a more industrial Haryana. To give a fillip to the MSME (Micro Small & Medium Enterprises) sector, the State has announced the setting up of a Rs. 1,000 crore corpus (State 10%, Centre 90%), under which loans will be provided to small and medium scale entrepreneurs, free of any collateral. This, the government hopes, will encourage many entrepreneurs to start fresh businesses, contributing to a healthy rise in investment and industrial growth in the State. The current collateral-free offering from banks has had no worthwhile response, as MSMEs can avail such loans only upto a limit of Rs. 10 lakhs – and banks have also been very selective in offering even this. Government sources say that the credit offtake under the existing schemes in the last financial year was only Rs. 60 crores in over 800 accounts. By making the scheme much larger, and promising a hassle-free environment, the State hopes for dramatically different results. The silver lining is that Non-Performing Assets (NPAs) in this category have only been a little over one per cent – which is very good, even for ‘selective’ lending. Department officials feel that the new approach to lending will help the banks overcome their inhibitions and enable them to meet their growth targets (in 2014-15, 2.86 lakh units were funded, versus 2.68 lakh units in the previous year). The new policy also envisages greater coordination between the lending banks and the State Industry department, which will make the monitoring process more secure for the banks. The Department will make sincere efforts to unearth new entrepreneurial talent (including among the educated unemployed) in the State.. According to the State Finance, Industries and Commerce Minister, Capt. Abhimanyu, the new Industrial Policy (expected in the next two to three weeks) wishes to bring in greater transparency as well as structural and procedural reforms, to facilitate entrepreneurs. The government has promised that the new policy will take care of the inadequacies of the previous (2005 & 2011) policies. The Chief Minister has referred to those inadequacies as ‘loopholes’ that need to be plugged, to make the policy more effective and industry-friendly. In the meantime, the govt. has been inviting suggestions from industrialists and other stakeholders, the stated objective being to make the policy prescriptions simpler and easier to understand and implement. “Industry must find our policies inviting and comfortable to do business in the State,” the Chief Minister has observed. At the same time, the State has been anxious to make the policy worker-friendly. In this context the State government is determined to simplify some of the existing laws (as done by other ‘successful’ States). Further, some obvious improvements will have to be made in the civic infrastructure. The power situation has to improve, as also the roads and the transportation system. In keeping with the spirit of the ‘Make in India’ policy of the Modi government at the Centre, the State will also adopt a ‘Make in Haryana’ programme to attract investments for the improvement of productive capacities.

 The Haryana Chamber of Commerce and Industry, in its memorandum to the State government, has urged for the creation of ‘free industrial zones’ and has asked the State to allow industries to directly acquire land from farmers to set up such facilities. The government, on its part, must provide the requisite infrastructure - such as roads, electricity and water -  for such zones, for which External Development Charges (EDC) could be levied. A demand has also been made for reduction of power tariff in the Panchkula district, from Rs 11 to Rs 9, to bring it at par with other districts. The Chamber has also urged for a tax concession to industry, to make it competitive with the adjoining (concession-benefited) hill states of Himachal Pradesh and Uttarakhand. An important cog in the wheel is Skill Development. The world is changing rapidly and transforming itself into a more knowledge-based environment, which has become central to industrial development. The focus is shifting from unskilled to a skilled and more educated workforce. A demand has also been made for the setting up of  more industrial training and technical institutes near industrial estates, to meet the growing requirement of skilled manpower. According to industry captains, the garment industry is an important one in the State and needs to be more carefully nurtured if it is to acquire a world standard status. Vasudev Loond of the Garment Manufacturers’ Association says that  the industry has been operating under difficult conditions, and a major policy change is necessary. The first need is to put in place a policy that enables capacity enhancement, as size does matter in this industry. “This would require more space, and  therefore an immediate requirement is that our industry should be allowed a higher Floor Area Ratio (FAR), which will enable the individual industrial units to increase their existing floor capacities. FAR needs to be enhanced to at least 2.25%, in conformity with the Okhla Estate III under DSIIDC,” says Loond. He adds that the enhancement in space must also be used for areas that support business enhancement. “The improvement in infrastructure must enable activities like banking, establishment of showroom-cum-servicing facilities, training institutions/centres, budget hotels/guest houses, etc.,” he says. Loond also points out that parking is a huge problem; multiple parking sites need to be set up and run by HSIIDC or private players/co-operatives. The garment industry also laments the stiff power tariffs and blames the high-handed approach of the DHBVN. Animesh Saxena, President of the Udyog Vihar Industrial Association, says that representatives of the industries in Udyog Vihar need to be involved. He is critical of the tax recovery system, whereby MCG levies property tax while HSIIDC recovers maintenance tax. He says this dichotomy is confusing and should be discontinued. “We should have a single tax authority for both levies,” he says. A universal concern is on the labour front. In order to enable the smooth functioning of industry, the government will have to discipline the workforce, says President, NCR Chamber of Commerce, H P Yadav. “Discontinuing the industrial peace-keeping squad was a mistake; it should be re-introduced, to help bring peace in the industrial areas,” he says. “Further, only barren land should be utilised for industries, not fertile land. This will help keep a balance in the city,” he adds. Pollution has become an extremely sensitive subject in the State, with the recent High Court order directing ‘red category’ industrial units presently situated in non-industrial areas/estates to be shifted out to notified industrial areas/estates. In this context, the Chamber has made a representation, stating that non-polluting industries should not be required to get a clearance from the pollution board. Besides, common effluent treatment plants should be created at designated industrial areas. The industry and trade body has also demanded that the government must put an end to inspector raj and introduce self-certification for all industries. The memorandum also states that the Panchkula industrial area should be allowed to have service sector industries, air cargo spaces, warehousing facilities, and health and related industries, so that all kinds of industrial establishments could benefit from the upcoming international airport at Chandigarh.



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