Industrial resurgence

Print edition : April 22, 2005

The government is projecting the State as a favoured destination for investment in the IT, biotechnology and other knowledge-based and high-tech industrial sectors.

SARABJIT PANDHER in Chandigarh

At a unit of Punjab Tractors Ltd. The government's Industrial Policy 2003 aims at creating a vibrant industrial sector in the State.-

IN its endeavour to revive the stagnating economy, the Punjab government has made some special efforts to promote industrialisation in the State. Thanks to the efforts, the primary sector has registered a growth rate of 7.22 per cent and the secondary and tertiary sectors 4.7 per cent and 3.75 per cent respectively.

In its Budget proposals, the State government has accorded the highest priority to the development of industry and infrastructure. A new Industrial Policy, notified in April 2003, aims at creating a vibrant industrial sector in the State by cutting red tape. Under the policy, various procedures relating to the inspection and verification of premises and equipment and adherence to the Prevention and Control of Pollution Act were streamlined by inducting chartered engineers. The self-certification facility was provided with regard to 12 labour laws, making employers more conscious about workers' rights.

To avoid red tape, the State government set up an empowered committee under the Chief Minister to grant clearance and consider special incentives to mega projects with a capital investment of more than Rs.100 crores. However, a project worth Rs.25 crores to be set up in the border areas was treated as a mega project and was considered by the empowered committee. Subsequently, amusement parks and tourism projects with investment worth Rs.5 crores were also included in the same category.

In the last fiscal, the committee approved 27 mega industrial projects involving a projected investment of about Rs.7,500 crores. The projects cover the entire industrial spectrum - Information Technology (IT), industrial infrastructure, sugar, textiles, hosiery, distillery, foods, paper and pharmaceuticals - and are expected to provide jobs to 1,57,175 people.

A milk processing unit at Golumajra village in Patiala district, which is coming up at a cost of Rs.120 crores, will provide employment to 50,000 people. The United States-based Quark Incorporated's IT Park and services facility at Mohali, Punjab Apparel Park Limited's apparel park at Ludhiana, and a rice, bran oil and amorphous cake unit near Dhuri will be set up at a cost of Rs.1,000 crores, Rs.355 crores and Rs.205 crores respectively, providing jobs to at least 20,000 people.

The committee has cleared the establishment of eight distillery units to prevent the rotting of stored foods. Five projects worth Rs.2,000 crores to construct multiplexes, shopping malls, integrated industrial facilities, industrial estates and residential complexes in Ludhiana, Jalandhar and Sangrur have been cleared. The government has made efforts to project the State as a favoured destination for investment in the IT, biotechnology, and other knowledge-based and high-tech industrial sectors. Punjab InfoTech is the nodal agency to ensure fast-track clearances for such projects.

Developed by the Punjab government as a satellite town of Chandigarh, a Union Territory, the Sahibzada Ajit Singh Nagar, commonly known as Mohali, is fast coming up as a hub for IT and electronics industries. Quark's research and development (R&D) centre is already operating in Mohali. At the government level, while efforts are on to set up a special economic zone (SEZ) for industry at Amritsar, Mohali will have an IT SEZ.

The Government of India has sanctioned another Software Technology Park of India (STPI) near Patiala, for which Rs.4 crores have been sanctioned. Following Chief Minister Amarinder Singh's visit to Bangalore in November 2004 to invite investors to Punjab, IT giants such as Wipro and Dell International have set up shop in Mohali. Recently, prominent business houses such as Reliance and Hutchison began their operations in Mohali. The Tata group's subsidiary E2E Serwiz Solutions and Rakhra Technologies too are planning to set up units in the township.

MEANWHILE, the traditional industrial strength of the State has not been ignored. New investments worth Rs.510 crores and Rs.360.69 crores have been made in the large, medium and small-scale sectors respectively. While the State's industrial production increased from Rs.47,400 crores in 2001-02 to Rs.59,000 crores in 2004-05, exports rose from Rs.7,013.51 crores in 2002-03 to Rs.8,933.31 crores in 2003-04.

In the recently passed Budget, the State government proposed to set up an investment commission, which will promote investments in agriculture, infrastructure, industry and the services sectors, on the lines of the National Investment Commission. A sum of Rs.50 crores was allocated to clear the backlog of undisbursed subsidies, which had piled up to Rs.600 crores during the tenure of the previous government.

The government believes that to attract more investment an urban renewal programme needs to be initiated immediately. For this, the Budget proposed to set up a municipal development fund under the Punjab Accelerated Infrastructure Development Programme. A provision of Rs.100 crores has been made in the Budget for the fund, with an equal contribution from the Punjab Infrastructure Development Board. This, in turn, will be leveraged to fund the infrastructure projects of each municipal body.

However, no attempt at encouraging industrial growth would succeed unless the generation capacity of the State's power sector is improved. The government took note of the concerns and allocated 25 per cent of the annual plan outlay to the energy sector to ensure adequate supply of power. A sum of Rs.199 crores was spent in 2004-05 and Rs.229 crores has been allocated this year to renovate and modernise the existing power plants.

The 500 MW stage-II of the Guru Hargobind Thermal Plant at Lehra Mohabbat in Bhatinda is being constructed by Bharat Heavy Electricals Limited at a cost of Rs.1,750 crores. A memorandum of understanding was signed with the National Hydro Power Corporation to construct the 168 MW Shahpur Kandi Hydel Project on the Ravi river in Gurdaspur district. The Punjab State Electricity Board is engaged in negotiations with Gas Authority of India Limited for a joint venture to set up a 1,000 MW gas-based power generation facility near Doraha in Ludhiana district. The project is expected to cost Rs.4,000 crores.

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