A number of small industrial units from the National Capital Region (NCR) have expanded base in Himachal Pradesh and Uttarakhand in the last 2-4 years to cash in on attractive tax breaks and other incentives there, a survey by industry body Assocham has said.
The survey named ‘Shifting of Industrial Units from NCR to neighbouring States’ also highlighted that Uttar Pradesh is yet to be considered by industries for their operations, while Haryana and Punjab are perceived as saturated by industrial enterprises.
The survey, which covered over 500 small and medium sized industrial units, reveals that a whopping majority of 75 per cent of the respondents were eager to grab tax holiday schemes ranging from 7-10 years and lower local levies extended to them by Himachal Pradesh and Uttarakhand.
“It is because of this reason that a vast majority of industrial units in 2007 and 2008 chose to widen their base in these states instead of expanding their capacities elsewhere,” it said.
Assocham Secretary General D S Rawat said, “NCR can no longer be termed a suitable place for either establishing a small size industry or for capacity expansion as its infrastructure is already under severe pressure.”
The industrial units in the NCR are receiving power supply for only 4-5 hours, while facing power cuts of over 9-10 hours.
Even law and order situation is not good enough and since neighbouring states such as Himachal Pradesh and Uttarakhand provide good facilities, a majority of industrial units of NCR have grabbed this opportunity, Rawat added.
According to Assocham estimates, in Noida alone over 2000 SSI units have shut their offices in view of high cost of power and lack of tax benefits. Companies who were adding on to their earlier capacities have either opted for Uttarkhand or else have given up their expansion drive.
According to Rawat, even Rajasthan is capitalising on the opportunity to attract a large number of NCR-based investors with easy availability of land, lesser administrative procedures along with tax incentives and reduced duties.