Industrial region battles, Logistics
Industrial belt, which houses over 2,000 manufacturing units, infrastructure and high Logistics costs are among the critical concerns.
The haphazard development of the Baddi Barotiwala Nalagarh (BBN) industrial region, which is dotted with villages and fields along with innumerable industrial units, is a bit baffling for a first time visitor. For the industrial belt, which houses over 2,000 manufacturing units, infrastructure and high Logistics costs are among the critical concerns.
Take for instance, the four-laning project of the Pinjore-Nalagarh section on NH21 A, which has been lying in limbo for some time due to issues involving high costs of land acquisition.
Shailesh Aggarwal, President, BBN Industries Association, said, “There needs to be close co-ordination between the State and Central Governments to expedite this matter. We have already conveyed our concerns to both the State and Central governments. The highway is a critical connectivity link for the BBN industrial hub.”
Another key issue has been the lack of railway connectivity to this region despite a rail link project approved by the Central government between Pinjore and Baddi. Aggarwal pointed out that the inland container depot, which has been set up in the area is operating at very low capacity utilisation levels due to lack of a rail link.
Industrial units operating in the area are also deeply unhappy with the high Logistics costs due to the monopolistic practices of the State’s transport unions. Sources said freight costs in the State on majority of the routes are nearly 40 per cent higher than other regions making industrial units operating in the region uncompetitive.
A senior executive with a large-scale company said the truck unions, during recent talks, were warming up to the idea of rationalisation of freight rates. “But, whether they will start allowing trucks (from other States) that come in with the raw materials to ferry finished goods from the area to other regions, instead of going empty, will continue to be a key issue,” the executive added.
While companies in the area are battling these issues, the key question remains what will be the future of this industrial belt in the current GST regime? Companies in the region are facing delays when it comes to getting CGST refunds under the Central government’s Scheme of Budgetary Support which was given to support units in such regions which were earlier availing Central excise benefits. A special industrial development package has been given to the Himalayan States, including Himachal Pradesh, offering capital investment subsidy, interest subsidy and insurance subsidy on substantial expansion till 2022. However, local news reports indicated that over 100 units have already closed down in recent times.
Sanjay Khurana, Senior Vice-President, BBN Industrial Association, said, “Companies that have units in other States, have cut down on production in their units located in this region in recent times. But I believe the companies who have invested crores of money in this region over the years are here to stay. Attracting new investments in the region remains to be seen. So far, the state government has been pro-active about this and they are keen to attract new investments.”
The State government is in the process of finalising a new industrial policy and also plans to host an investor’s summit later this year.
Harish Agarwal, Chairman, CII Himachal Pradesh State Council, said, “The focus should be to encourage employment while leveraging on the strengths of the state. This includes the State being a large producer of fruits and vegetables, has high literacy rate and offers a peaceful and clean environment. There is a huge untapped potential for sectors such as IT, food processing healthcare industry in the State..”
He added that steps need to be taken to rationalise Logistics costs by eliminating certain practices, which will help boost not only the economy but also tourism in the State.