From attracting investments in the remotest of areas, to building an industrial park dedicated to women entrepreneurs, the young state of Uttarakhand has become a force to reckon with in a very short span of time. The Dollar Business catches up with Harish Rawat, Chief Minister of Uttarakhand, to understand how he plans to make it a destination of choice for foreign and domestic investors.
Ahmad Shariq Khan | January 2017 Issue | The Dollar Business
TDB: In a span of 16 years, Uttarakhand has made rapid strides on several fronts. Are you satisfied with the progress, particularly when it comes to creating an enabling environment for industries to flourish?
Harish Rawat (HR): The progress made by the state of Uttarakhand has been remarkable in many ways. Talking about the state’s economic growth, Uttarakhand has indeed made rapid strides since its inception. Today, the annual growth rate of the state is about 50% higher than the national growth rate and the industrial growth rate stands at 16% y-o-y. The services sector has shown 12% y-o-y growth and the agriculture sector has grown by 5.5% y-o-y in 2016. We are hopeful that in the next five years our overall growth rate will assume an exponential trajectory. Also, the state’s per capita income is way above the national average. When I took over as the Chief Minister of Uttarakhand, the per capita income of the state was Rs.84,000, which now stands at about Rs.1,20,000.
TDB: Tourism is a big foreign exchange earner for Uttarakhand. Yet many potential attractions remain under-developed. What are you doing to improve earnings from this sector?
HR: The tourism sector is one of Uttarakhand’s USPs, the backbone of our state’s economy. After I took office, we have undertaken various initiatives to promote tourism in the state. Eco, yoga and medical tourism, Home Stay Policy, trekking, mountain biking and paragliding are some of the areas which are being developed in a big way. Under the same scheme, places such as Jauljibi, Pancheshwar, Chandrapuri, Madmaheshwar-Tungnath, Jageshwar, Purnagiri, Chhota Kailash, Dyara Bugyal, Satopanth, Har Ki Doon, Kanva Ashram, etc., will be transformed into world-class tourist and leisure destinations. In addition, more than 80 trekking routes are being developed to make Uttarakhand a paradise for trekkers.
We are organising bird festivals throughout Uttarakhand – and setting up butterfly parks too. In recent years, Suman Sarovar (Tehri Lake) that spreads across 45 sq. km. has become a new attraction for tourists. Considering that yoga is fast gaining huge popularity across the globe, Jageshwar and Rishikesh are being developed as yoga circuits. Through all these activities, we plan to earn foreign exchange and generate employment for our youth.
I would also add that, under the Home Stay Policy, about 1,000 buildings have been constructed in our traditional style. And we are making efforts to promote skill development centres to support human resources for the sector. These are some of the focus areas that we believe hold immense potential for growth in the state. At the same time, we are also exploring other sectors for development.
TDB: Over the last few years, Uttarakhand has moved up in the Ease of Doing Business ranking. How do you plan to leverage this and promote exports from the state?
HR: Uttarakhand is fast becoming a hot spot for industrialists and investors alike, both from India and abroad. About 11 months ago, we were ranked 23rd. But today, we have climbed to the 9th position in the Ease of Doing Business Index amongst Indian states. It proves that the state offers a conducive atmosphere for investments. In my opinion, by 2018, the state will grow at 18% y-o-y, largely because of better law and order enforcement, availability of uninterrupted and low-cost electricity and investment friendly policies.
We are offering more incentives to those industrial houses that are setting up facilities at places higher than 1,000 metre above sea level. And, I am glad to tell you that we are getting a tremendous response from MNCs.
To attract investments and grow the economy, the “Mega Industrial and Investment Policy 2015” has been implemented. Under this scheme, projects with more than Rs.75 crore investment have been declared as Mega Projects. They are entitled to 25% exemption on land premium (on the present base price), 50% concession on stamp duty, only 1% central sales tax and 50% exemption on electricity duty for captive power generation for seven years.
In addition, there is a discount on Mandi Tax and a 15% capital subsidy in place (up to a maximum of Rs.50 lakh). It offers 50% stamp duty discount for completing land purchase/lease deed. Interest subsidies are also being given along with 100% discount on electricity duty for five years. We believe that these are adequate incentives to make products from Uttarakhand globally competitive. Also, under the Mega Textile Park Policy, we are encouraging textile manufacturers to export from Uttarakhand.
"Our Plicies Will Help Our Products Become Globally Competitive"
TDB: There have been talks that the state government will set up an industrial park for women. What is your expectation from this project?
HR: Uttarakhand has over 1,000 women entrepreneurs and there are 469 units that are being exclusively managed by women entrepreneurs. However, to accelerate the participation of women in the process of economic development, we believe that the first step is to develop and promote entrepreneurship among women. We believe the industry, government and the society have to build something concrete together. So, we are setting up an industrial park for women at Sitarganj (in Udham Singh Nagar district), which will be spread over 200 acre.
In the first phase, a 10-acre industrial park will be started at Sitarganj Phase-II area by SIIDCUL (State Infrastructure & Industrial Development Corporation of Uttarakhand Ltd.). Later, more such specialised industrial parks across all districts will come up. With this endeavour, we believe that a percentage of jobs will be allocated for women in the newly built industrial park. In addition, the state government would set up a single-window umbrella organisation for the benefit of units promoted by self-help groups.
TDB: MSMEs are the backbone of many industries in Uttarakhand. What are you doing to boost this sector?
HR: Considering the significant role of MSMEs (Micro, Small and Medium Enterprises) in the state’s economic development, the state government has implemented MSME Policy 2015. Various financial relaxations and facilities are being provided under the scheme. The policy also aims at utilising local resources to generate employment opportunities and promote self-employment, skills development among the youth, etc.
The Uttarakhand Industrial Single Window Act has been implemented to grant time bound and speedy approvals to establish industries in the state. The last Friday of every month is celebrated as the “Self-Employment and Entrepreneurship Day”. And, on this day, the District Industry Centres (DIC) give out information about their schemes and invite all the departments, institutes, and banks, to try and solve the problems of the self-employed.
Also, “Mukhyamantri Swarojgar Yojana” has been implemented under the MSME Policy, whereby Rs.3 lakh to services sector and Rs.5 lakh to manufacturing sector are being granted as margin money. Further, to promote entrepreneurship amongst women, capital and interest subsidies are now being granted. We are also granting concession on stamp duty if industries want to develop their projects in hilly regions.
TDB: Uttarakhand is said to be making a significant investment in industrial infrastructure. Can you elaborate what SIIDCUL has done to attract investments, especially FDI into the state?
HR: SIIDCUL plays an important role in promoting industries and attracting FDI into the state. At the moment, the industrial body is providing adequate and timely finance, developing the required infrastructure, ensuring development and technology upgradation as well as setting up high-tech pollution-free industries. It also ensures speedy clearances to enable the shortest lead time in setting up industrial projects.
Presently, SIIDCUL is involved in the development of an Integrated Industrial Estate at BHEL Haridwar, an Integrated Industrial Estate at Pantnagar, an IT Park at Dehradun, Pharma City at Selaqui, a Growth Centre at Pauri and an Integrated Industrial Estate at Sitarganj, among others. Considering the critical role SIIDCUL plays in the economic growth of the state, I intend to personally oversee the development work of this body so that there is consistent and non-stop development in the state.
Many textiles parks have been set up in recent times, and, under our Mega Textile Park Policy 2014, we are inviting textile players to come and invest in our proposed textile parks. Also, the logistics hub operated by SIIDCUL-CONCOR Infra Company Ltd., a joint venture initiative of the state with CONCOR, in Pantnagar has now become operational.
"SIIDCUL plays an important role in promoting industries and attracting FDI"
TDB: Uttarakhand Start-Up Policy was implemented in July 2016. Can you elaborate on the policy?
HR: The main purpose of the scheme is to attract investments into the incubation and start-up ecosystem in Uttarakhand, to bring investment into the state from well-known companies such as Infosys, Wipro, Tech Mahindra, Tata, etc., to provide a stable platform for new entrepreneurs. The focus sectors include agri-business, biotech, healthcare and e-commerce, among a host of others.
The policy aims to establish at least a few technology businesses in different sectors in the first year of the policy period – the final figure at the end of the five-year period should be 10 businesses. Under this scheme, development of 2,00,000 sq.ft. of incubation space in the state has been planned. We also plan on facilitating angel and venture capital funding of a minimum of Rs.500 crore under this scheme.
To help actualise the dreams of our start-ups, we are committed to providing them with core infrastructure across sectors and locations in the state. This could be funded by state or via PPP (public-private partnership) mode and would be available on lease for entrepreneurs.
Fully furnished and ready-to-use plug and play infrastructure, along with computers with 2Gbps Internet connectivity, electricity, water and other office facilities would be provided as infrastructural support from the state government to host organisations to set up incubators. In addition, common facilities such as testing labs, design studios, etc., set up by state government at nodal incubators will be shared with all incubators.
In the coming times, the government will also earmark start-up parks in all districts. Skills mapping has been initiated to develop skills according to the demands of industries.
Numerous soft skill courses have been started with the help of NIESBUD (National Institute for Entrepreneurship and Small Business Development). Small start-up programmes have also been initiated for the youth, women and artisans, and a corpus fund of Rs.10 crore has been constituted for this. We are also going to link our Start-Up Policy with MSME Policy, because MSMEs are not just the real drivers of our growth but also the source of creative ideas that transform our industries.
TDB: It is said that unemployment is a big problem in the state, resulting in migration of youth to other states. How do you plan to leverage business potential of the state when it comes to solving this problem?
HR: Yes, we are aware of the concern and we are taking several steps to reverse the trend. Through our various initiatives, we are focusing on reverse migration. In order to attract investment to our hilly areas and promote commercial activities there, we are offering special discounts to industries, educational institutes and tourism initiatives. Various facilities are being developed in these areas and the MSME Policy has been implemented to promote industries in the hilly region. Six small industrial institutes are already being established in the hilly areas of the state with the help of SIIDCUL.
And going forward, we are hopeful that our various small initiatives such as boosting tourism through innovative experiences, promotion of textiles, agricultural industries and handicrafts, women self-help groups, etc., will stem the tide of migration.
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