"Chief Minister Virbhadra Singh requested Prime Minister Manmohan Singh to restore the industrial package of the state till 2020 to remove regional disparity in the field of industrial development and create employment avenues for the youth," an official statement from the Chief Minister's Office said. A special package for industrial development in Himachal and Uttarakhand was extended by the Atal Bihari Vajpayee-led National Democratic Alliance (NDA) government in 2003.
But the Congress-led United Progressive Alliance government curtailed it in 2007, before restoring it till 2010. However, the incentive of the central excise duty was withdrawn in March 2010 and income tax incentive was withdrawn in March 2012. The Chief Minister said these incentives to the special category states are not adversely affecting the industrial development of bigger states.
During the industrial package period, he said, the state got about 16,500 units in small, medium and large-scale sectors, with the proposed investment of Rs 48,830 crore having employment potential of 5,42,580 people. However, of these approved units, only 9,353 units with investment of Rs 14,557 crore, having employment potential of 1,20,602 people, were actually set up in the state.
The Chief Minister said the state had made massive investment to improve infrastructural facilities in industrial areas and facilitate investment. Union Commerce Minister Anand Sharma, who was in Shimla on Sunday to hold consultations with state government functionaries on industrial development projects, announced that the capital investment subsidy on plant and machinery for Himachal Pradesh and Uttarakhand would be extended till March 31, 2017, to accelerate industrial growth of the hill states.
The capital investment subsidy was one major component of a special industrial package offered to the states by the union government. While the package itself was withdrawn in March 2010 in both the states, the capital investment subsidy component remained in force after that, but expired January 7, 2012, official sources said.
Likewise, Sharma announced a freight subsidy incentive for industry in both the hill states, on the pattern of the northeastern states. The same subsidy was earlier known as the central transport subsidy scheme. Certain rules of the freight subsidy incentive have been relaxed to make it more liberal and it would be applicable till 2017, he said.