Investors Elude Himachal
Himachal is striving hard to give impetus to industrialisation that can also open numerous employment opportunities. However, investors elude Himachal despite its industry friendly atmosphere, uninterrupted power supply, peaceful environment and other incentives. Even investor meets organised in Bengaluru, Delhi and Kolkata failed to attract big investors to this hilly state. As a result, pace of industrialisation has slowed here even as the state will develop three new industrial areas. Neighbouring states are also posing hurdles in Himachal’s industrialisation.
Industries In Himachal
Class Industries Investment Employment
( In crores)
Micro & Small 42000 7164.35 225,889
Medium 403 5173.33 31,968
Heavy 138 6705.82 29,072
Situation After 2003
Class Industries Investment Employment
( In crores)
Micro & Small 12037 6459.72 96,962
Medium & Heavy 345 9501.09 31,217
* Big industrial houses did not invest in BBN that lacked infrastructure besides rail and air connectivity. Since industrial package is over, implementation of GST and time bound official clearances can help bring investment
-Arun Rawat, Former CII, Himachal, Chairman
Industrial development picked up pace after Vajpaye government had granted industrial package to Himachal in 2003. Nearly 600 pharma units have been established in Baddi-Barotiwala-Nalagarh area. The industrial units had made a beeline to invest in Himachal due to incentives available under the package. It was the time when reputed industrial houses had shown intention to establish units in BBN area. The area emerged as a pharma hub while textile, automobile, consumer and packaging goods industries were also established. However, many industries migrated after culmination of the special industrial package.
Hurdles In Investment
Neighbouring states of Punjab and Haryana pose biggest hurdle in Himachal’s industrialisation as they have been opposing growth of industries here. They want Himachal’s water for their agriculture but don’t want that industrialisation should gain momentum in this hilly state. These prosperous neighbours don’t like industry friendly atmosphere to develop in Himachal. If it happens then industrial units from Punjab and Haryana will shift to this hilly state due to uninterrupted power supply, peaceful environment and accountable administration and other facilities. These states always oppose when Himachal raises its voice for its rights.
Failed Investor Meets
Investor meets organised in Bengaluru, Delhi and Kolkatta only attracted expansion plans by already established industrial units in Himachal. No big company invested in Himachal through investor meets. NRIs from Himachal had proposed to invest in Pong area and tourism sector but it also couldn’t realise. Tata’s proposal to boost Kangra tea has also stumbled. Nothing could be achieved even after spending Rs. 1 crore on investor meets.
Officers and employees are yet to become investor friendly. As a result, files move at a slow pace. Despite claim of clearances in 90 days and 45 days, investors have to toil hard to get no objection certificate. Norms are so stringent in tourism sector that investors are unwilling to invest. However, a committee has been formed for simplification of norms on Chief Minister’s direction.
Unplanned Development Of BBN Area
Unplanned development in the Baddi-Barotiwala-Nalagarh belt after announcement of the 2003 central industrial package has stunted its growth and prevented it from emerging as an ideal industrial area. The government started planning its development after haphazard industrial growth had spread all across the area. A master plan was planned to be implemented in 2007 when industrialisation was at its peak but it could not be finalised until 2016. By this time, industries which had come merely to gain incentives of the central industrial package had already started moving out.
There were few facilities available for investors here and they preferred to go back to the Tricity rather than staying here. Though government efforts helped to bring some reputed universities but the lack of good schools acted as major hurdle for investors from staying here. The area does not have quality housing. Several builders have come up with flats that are located in areas where the industrial pollution did not create a good atmosphere for people to stay back.
Though labour hostels have been constructed now but there were few takers for it and slum colonies at various places have given the area an ugly look. Efforts were made by the government to create quality infrastructure by constituting the Baddi Barotiwala Nalagarh Development Authority (BBNDA) but initial scarcity of funds and lack of permanent CEO reduced it to a toothless body. It took years for the area to be connected to Chandigarh through the Siswan Road but rail and air connectivity were yet to be established. This has hit the growth of industries. Being a distant location, the industries were spending more on buying raw material from outside and sending the finished goods to far off places.
The area also lacked in providing entertainment facilities. Though a mall has come up, it has failed to stop the industrial workforce from staying back. Filth and dirt on roads due to lack of proper maintenance is enough to deter people from staying here. The area does not even have a bus stand and has parking space for only 200 vehicles even as more than 72,000 vehicles are registered here. Crime and accidents due to over congested roads have made driving risky in the BBN and people prefer to drive back to the Tricity after their work.
Existing Units Expanding
Several facilities for industries were now in the pipeline like creation of a pharma
testing lab, central institute of plastic engineering, solid and industrial waste management plants and container corporation of India which will provide facilities to the industry. But since incentives were not available for the industry, the amount of new investment was only in the form of expansion of existing industry. Several investor meets have been organised to bring more investment to BBN but success has been limited. The area has 2260 industries in various sectors like pharma, automobile, consumer goods, steel, engineering services, etc. Tax to the tune of Rs 22,000 crore is collected annually and investment of Rs 15,000 crore has been made here.
Promote Made in Himachal
Many national and multinational companies have also been established here under Make in India initiative announced by Modi government. These include TVS, Phillips, Havells, ITC, Hindustan Lever, Wipro, Godrej, Cremica, Colgate, Laureal cosmetics, Maxima watches, Lee Cooper shoes and others. These industrial units also act as Himachal’s brand ambassador by selling their products across the globe. As consumers have become more aware, they always check date and place of manufacturing different products. Himachal is running after Bollywood celebrities to make them
brand ambassadors but role of these companies promoting Brand Himachal needs to be appreciated. It is high time that Made in Himachal brand under make in India needs to be popularised to attract more investors.
* Three New industrial areas to be developed in Pandoga in Una, Kandrori in Kangra and Dabhota in BBN area
* 2050 industries established in three years with investment of Rs. 2764.22 crore generating 20,633 employment opportunities
* Pharma companies doing Rs. 30,000 crore annual business
* Products manufactured in Himachal exported to 52 countries.
* Himachal to become power state as it has nearly 23,230 MW hydro power potential
* Produces nearly 30% production of FMCG and agro processing units
* Cement plants supply cement to 15 states
* HPMC is major Make in Himachal brand
* Bhuttico is global Brand Himachal
Industry Friendly Atmosphere
The state government is offering industry friendly atmosphere besides simplifying procedures for establishing industrial units here. Himachal has assured time bound clearance and incentives for new industries to be established here. Industrialisation, notably, can open numerous employment opportunities. Besides constituting Single Window Interface, the state has also adopted Common Application Form system.
Himachal In Top 10
Himachal has been placed at 9th place in Ease of Doing Business in a survey conducted by Singapore’s Asia Competitiveness Institute. Himachal has been placed above Punjab, Haryana and Uttarakhand.