Why investors in Punjab are expanding their base to other states
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Ahead of the investor’s summit in Punjab, the industrialists in the state looked disgruntled on a slew of issues, including the law and order situation.
By Manjeet Sehgal: The Punjab government will be hosting an investor summit on February 23. The step by the AAP-led government is seen against the backdrop of the state’s business houses swaying to Uttar Pradesh, which has received Rs 10,000 crore investment from Punjab.
The manufacturers and exporters have been complaining about the “stepmotherly treatment” given by the government to old industrial units. Corruption, red tapism, lack of infrastructure, and dwindling law and order were among the other things which remain a concern for the business which are not letting the grass grow under their feet in Punjab.
Disgruntled old industrial units
United Cycles and Parts manufacturers association president DS Chawla said the government was attracting new investments by neglecting the old industrial units.
“The new investors are being offered incentives besides the cheap power. We were also promised that the tariff would be reduced to Rs 5 per unit, but we are paying nearly double,” said Chawla.
He also said that neighbouring states offered subsidised power and industrial polts, besides other incentives. “We have every right to protect our interests,” said Chawla, adding, “the previous governments failed to create an industry-friendly environment”.
Lack of Infrastructure
The Industrialists held the poor infrastructure, air connectivity, potholes, and non-availability of a seaport were responsible for the slow pace of industrial development. “The importers hesitate to visit Punjab’s industrial areas given its poor air connectivity. They insist on meeting manufacturers in New Delhi or elsewhere,” said DS Chawla.
Deteriorating law and order situation
The law and order situation continued to worry the businesses as the vendors found frequent protests and rallies in the state disruptive.
“The protests and rallies in the state are causing traffic disruption on state and national highways. Punjab was known for agriculture, but it has acquired a “dharna culture”, said Sandeep Jain of Monte Carlo to CM Bhagavant Maan during his visit to Ludhiana on Monday.
Corruption and Red Tapism
Punjab’s industrialists complained that they never got the GST refunds and the payments of government purchases on time.
Cycle parts manufacturer Sunil Sachdeva said that while the government pays no interest on the delayed payments, ironically, it demands a whopping 35 per cent interest from the industrialists in case they default.
“Officials demand cuts for releasing the payments. The state government says it has zero tolerance against corruption, but it still exists,” said DS Chawla.
Outrageous freight
The Industrialists said that the transporter unions in Punjab act like mafias and charge outrageous freight, which was three to four times higher than the market rates.
“The Congress government had banned the formation of truck unions, but the AAP government reinstated it,” said Chawla.
Leakage of investments
Many corporate houses in the past have shifted their base from Punjab to the neighbouring Gurugram in Haryana. Some industrial houses based in Gurugram include Mrs Bector’s Food Specialities Limited, Hero Cycles Limited and Oswal Mills Limited.
While some industries are expanding in other states, a few businesses closed in the state owing to the more lucrative proposals of other states. The covid-19 pandemic and year-long farmer agitation further resulted in losses for the business. State industries lost an estimated Rs 30,000 crore during the farmer agitation alone.
“If Rs 10,000 crore is being invested out of Punjab, the state government must take it seriously. The investments will not be limited to Rs 10000 crore but will be higher as many small and ancillary units will also migrate to other states. We will also start exporting from other states,” said cycle parts exporter HS Chhabra.
However, Chief Minister Bhagwant Mann visited Ludhiana, Amritsar and other districts and promised the industrialists that their concerns would be addressed.
“The era of harassment to the industry is over. We have already started a single window facility to ensure that the interests of the industrialists are safeguarded,” said the chief minister.
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