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State in transition

Print edition : Mar 24, 2006 T+T-
A shopping mall in Gurgaon.-BY SPECIAL ARRANGEMENT

A shopping mall in Gurgaon.-BY SPECIAL ARRANGEMENT

The predominantly agricultural State embarks on a rapid industrial development programme by taking innovative policy initiatives.

ON March 5, the government led by Chief Minister Bhupinder Singh Hooda completed one year in office. In keeping with its electoral promises of solving issues such as law and order, unemployment and retrenchment of workers, one of the first things the Congress government did on assuming office was to formulate new industrial and labour policies. It ushered in a slew of programmes, primarily in the area of industry and infrastructure investment.

Haryana has the highest per capita income among the States. It is also the first State to have achieved 100 per cent rural electrification; ensured availability of clean drinking water to all villages and laid metalled roads connecting all parts of the State. To encourage investment, which has been the thrust of the industrial policy, the government has accorded top priority to the expansion of infrastructure facilities and industrial development. The nodal agency entrusted with this responsibility is the Haryana State Industrial Development Corporation. Its tasks include developing industrial estates, industrial parks, marketing complexes, institutional and commercial premises and expressways.

The policy lays special emphasis on fostering public-private partnerships in infrastructure development and building industrial townships to attract big projects. As Haryana is a predominantly agricultural State, the industrial policy aims to develop agriculture-related food processing units. In addition to this, the policy envisages the promotion of priority areas such as, Information Technology, biotechnology and scientific instruments production. The government aims at providing one million jobs through industrial ventures. The Chief Minister's Rural Employment Scheme is expected to encourage the expansion of industry and employment avenues in rural areas. In order to streamline the rural industrial projects and to ensure their speedy take-off, a single window clearance scheme is on the anvil. The government, under the Industrial Promotion Act, will ensure quick clearance of new industrial projects. The Act stipulates that new projects should be cleared within six months.

To facilitate easy access to information for entrepreneurs, export promotion centres have been set up, in Delhi and Chandigarh. These Unified Nodal Agencies will disseminate information and guide entrepreneurs on the various provisions of the new industrial policy. An Investment Promotion Board to attract domestic and foreign investment and an Investment Advisory Council that would help the government in planning industrial and infrastructure projects have been set up under the leadership of the Chief Minister. In addition, a joint task force of industry representatives and the government has been established.

One of the first laws that the new Assembly passed was the Special Economic Zone Act, 2005. To be run on the pattern of the exclusive economic zones in other States, these centres will generate employment and promote economic growth. The zones are taking shape with foreign direct investment and public sector investment. The Act exempts developers from State-level taxes and duties. It also envisages devolution of powers to the development commissioners of these zones.

The Special Economic Zone (SEZ) around village Garhi Harsaru on National Highway 8 in the Gurgaon area is a telling example. Developed by the Haryana State Industrial Development Corporation, this zone, christened New Gurgaon, is expected to attract an initial investment of Rs.2,060.40 crores and provide direct employment to 12,000 persons. It is spread over 3,000 acres (1,214 hectares) of land.

Some key facilities are being offered to create an atmosphere friendly to investors and manufacturers. These include a duty-free enclave, grant of foreign territory status for purposes of trade, tax rebates, a world-class infrastructure base, an internationally competitive atmosphere, efficient transportation and communication arrangements, smooth access to regional and international markets and duty-free receipt of materials from regional levy areas. The zones will have features such as a world trade campus, a gems and jewellery park, shopping malls and freight movement facilities.

At least 10 such economic zones are being planned. One of them is a joint venture of HSIDC and Reliance Industries Limited. This world standard SEZ will be located in Gurgaon and spread over an area of 10,000 hectares. Reliance is expected to make investments in the range of Rs.25,000-40,000 crores to develop the SEZ. The government has received 10 proposals from big companies, with each investing Rs.1 crore. More economic zones are being planned along the Kundli-Manesar-Palwal expressway and the National Highway.

Under the new industrial policy, the government intends to develop economic centres, modelled on technology parks. For instance, for the development of ancillary industries related to the Panipat Oil Refinery, a technology park called Petro Chemical Hub is being developed in Panipat. This will lead eventually to the establishment of 3,500 ancillary units based on petrochemicals and will provide jobs to about 50,000 people. Entrepreneurs are being given financial and non-financial incentives to set up units at the hub.

In order to promote equitable and all-round development, the government plans to give special concessions to large industries that set up base in backward areas. A scheme has been drawn up to promote units that invest Rs.100 crores or more and give employment to more than 500 people. Such units will be given interest free loans for a period of five years under the Haryana Value Added Tax (VAT) Act, 2003.

Similarly, small-scale industries that wish to set up base in backward areas will be given promotional benefits such as interest free loans for five years. The loan amount will be equivalent to half the tax paid by the units on goods produced under VAT for five years after the commencment of commercial production.

The focus on backward areas reflects the government's keenness to promote rural industrialisation, which would meet the twin challenges of unemployment and irregular employment, address issues related to diversification of economic activities in rural areas and serve the objective of decreasing the pressure on land.

Non-governmental organisations and the Khadi Rural Industry Board will be associated with the onerous task of rural industrialisation. The government is also keen to encourage cooperative system of production, which will ensure the easy availability of raw material, design and development aids.

In order to give a fillip to the development of semi-urban pockets in economically backward areas, the government plans to identify independent entrepreneurial zones where industries can set up units without waiting for permission for the change of land use.