Assocham proposes comprehensive industrial policy for SMEs

Industry body Assocham has suggested announcement of comprehensive industrial policy in Punjab to bring back the past glory of the state


To reduce farmers’ debt, private moneylenders should be registered and regulated and instead of debt waiver schemes. Photo: Bloomberg
To reduce farmers’ debt, private moneylenders should be registered and regulated and instead of debt waiver schemes. Photo: Bloomberg

Chandigarh: Industry body Assocham has suggested announcement of comprehensive industrial policy in Punjab to bring back the past glory of the state, which was once a hub for small and medium enterprise (SMEs) and known for value addition to agri-products.

In a joint vision paper for the new government brought out by Assocham and Thought Arbitrage Research Institute (TARI) which was released by Assocham National Secretary General D S Rawat and Kshama V Kaushik, Director, TARI, it mentioned that the policy should focus on activities relating to farm products, horticulture, livestock products like milk and other dairy items, cotton and textiles which have strong backward and forward linkages in the state’s economy.

According to the paper, Punjab needs to promote less water guzzling crops like pulses, oilseeds, cotton, maize, millet, vegetables and fruits – by providing improved seeds and ensuring that farmers get a fair price for these crops through a market support mechanism. The area under paddy cultivation should be reduced and high value crops like cotton, fruits, vegetables, canola, menthe, turmeric should be grown to raise their share of cropping area from 3.4%, it said. “Ad hoc policies like ban on export of foodgrains, limits on private stocking and tax on purchase of food grains (14.4%) should be revisited and withdrawn wherever possible.

The fertilizer subsidy policy needs to be revisited to achieve balanced use of nutrients and subsidy should be transferred directly to the farmers,” the paper mentioned. It also suggested incentivising technology like direct seeding of paddy and drip irrigation which saves 30-50% of water. More investment is needed in production and promotion of organic manure, bio-pesticides to cut down use of chemical pesticides linked to the spread of cancer, it further said. “Also, Implement National Policy for Crop Residue 2014 which suggests suitable legislation, adoption of technical measures and training on crop residue management to eliminate crop residue burning.”

To reduce farmers’ debt, private moneylenders should be registered and regulated and instead of debt waiver schemes, state should find ways to expand institutional credit facilities; APMC Act should be amended to allow farmers to sell directly to food processing industry while ensuring that no hoarding of essential items take place. Punjab should join National Agriculture Market which provides e-mandis across the country to ensure better price realisation and soil testing facilities. Financial incentives -- like exemption or concessions in stamp duty and property tax should be extended to existing units which are fighting for survival, Rawat told reporters quoting the paper.

“Also, bring parity in tax structure and match financial incentives offered by rival states like Himachal Pradesh, Maharashtra, Gujarat and Madhya Pradesh to become more competitive,” adds the paper. It also suggested developing labour intensive technologies suitable for growth of MSMEs and support with adequate infrastructure to overcome problems of poor labour productivity and obsolete technologies. The state needs to take advantage of natural resources to promote farm products, horticulture, livestock products, manufacturing of textiles, machinery, motor vehicle and food processing since they have strong linkages with the state’s economy, noted the study.

“The power policy should be reviewed. Octroi and cow cess should be withdrawn and cheaper power available to new industries should be extended to the existing ones. IT and ITeS industries should be developed in Amritsar, Jalandhar and Ludhiana as proposed and fast-tracked,” it said. A petrochemical hub around Bhatinda’s refinery and bio- technology parks and incubators in and outside Mohali should be developed as new growth drivers, it said.

Single-window and IT-enabled mechanism should be set up for administrative clearances, extending various services and availing various incentives, adds the joint study. The state should also focus on building a dedicated rail freight corridor and add more dry ports for a double-digit growth, need to step up efforts to induct IT into agriculture and agri-processing, it further said. Policy should be changed to provide free power to only small and marginal farmers, while power to middle and big farmers could be charged at market rates (or slightly subsidized), it said.

The total shortage of housing units is 7,46,798 which includes shortage of urban housing of 2,80,050 units. A perspective plan for housing should be made at the state and city levels to address the shortfall in housing, it said. The study pointed out that the state’s growth is driven by the services sector which has grown disproportionately. “Interestingly, however, analysis of sub-sectoral data shows that the only sub-sector which has been growing is banking and financial services. The rest are slowing down, including trade and hotel which contribute the most (23.5%) to the services sector”.

Tourism is another area which has huge potential but remains neglected, it claimed. The study pointed out that Punjab has no clear and defined health policy despite the alarming level of cancer and drug addiction and high cost of hospitalisation.

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