ASSOCHAM moots plan for comprehensive industrial policy for SMEs


newznew (Chandigarh) : Apex industry body ASSOCHAM has mooted a proposal to the newly elected government of Punjab for announcement of comprehensive industrial policy to bring back the glory of ‘Sher-E-Punjab’ hub for small medium enterprise (SMEs) and value addition to agriproducts.

In a joint vision paper for the new government brought out by the ASSOCHAM and Thought Arbitrage Research Institute (TARI) which was released by ASSOCHAM National Secretary General Mr. D S Rawat and Ms. Kshama V Kaushik, Director, TARI at a press conference here in Chandigarh.

The policy should focus on activities relating top reservation, farm products, horticulture, livestock products like milk and other dairy items, cotton and textiles etc. 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 etc. should be grown to raise their share of cropping area from 3.4%.


Ad-hoc policies like ban on export of food grains, limits on private stocking and tax on purchase of food grains (14.4%) should be revisited and withdrawn wherever possible.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.


Incentivise technology like direct seeding of paddy and drip irrigation which saves 30-50% of water. More investment needed in production and promotion of organic manure, bio-pesticides to cut down use of chemical pesticides linked to the spread of cancer.  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’ indebtedness, 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.


The financial incentives – like exemption or concessions in stamp duty, property tax etc. – should be extended to existing units which are fighting for survival.  Also bring parity in tax structure and match financial incentives offered by rival states like Himachal Pradesh, Maharashtra, Gujarat, Madhya Pradesh to become more competitive, adds paper.


Develop 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, food processing etc. since these have strong linkages with the state’s economy, noted the ASSOCHAM 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.


A petrochemical hub around Bhatinda’s refinery and bio-technology parks and incubators in and outside Mohali should be developed as new growth drivers.  Single-window and IT-enabled mechanism should be set up for administrative clearances, extending various services and availing various incentives, adds the joint study.


Fiscal Incentives for Industrial Promotion 2013 should be amended to provide incentives to proposed ITeS hub in Jalandhar which has necessary infrastructure. There is a huge potential for financial services -capital market services, private banking to HNIs, brokerage and insurance etc. The state should take help of financial institutions to spread financial literacy.


The state has no clear and defined health policy despite the alarming level of cancer and drug addiction and high cost of hospitalisation etc. The health expenditure needs to go up to Rs 5,000 per capita by 2030 from current level of Rs 1,015 (2014-15). The public health infrastructure needs drastic restructuring at sub-centre, PHC and CHC levels to ensure adequate healthcare coverage, including treatment for cancer and drug addiction.


IT solutions should be developed to check rampant absenteeism of medical personnel and to record and report health transactions. The curriculum and vocational training programme for tourism should be developed at school level particularly targeting high dropouts in districts of Pathankot, Muktsar Sahib, Fatehgarh, Mansa and Sangrur.


The state needs to set up skill development/training institutes either on its own or with private participation since the current skilling programme has been taken over by industries for in house training and is not benefitting general labour force. A strategic road-map needed for skill development in districts with low penetration of vocational education-Gurdaspur, Sangrur, Barnala, Muktsar, Jalandhar and Mohali.


More funds should be mobilised to set up commercial dairy farms, poultry farms etc. and provide marketing infrastructure to help such farms garner maximum benefits rather than middlemen. Proposed district haatcentres in Amritsar, Jalandhar, Ludhiana, Patiala, Ferozpur and Mohali should be completed on a priority basis.


The state should 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. 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). In addition to renewable energy like solar power, plans should be worked out for harvesting bio-energy to use bio-mass generated.


Total number of housing shortage is 7,46,798 units 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; about 20-25% of developed land in urban areas should be reserved for urban poor. To prevent slum formation, industries and builders should be persuaded to provide reasonable accommodation equipped with basic services to their workers.


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 contributes the most (23.5%) to the services sector. The banking penetration is high but there is a potential for expanding financial services like capital market services, private banking to HNIs, brokerage and insurance services etc. The state would do well to focus on financial literacy with the help of banks and other financial institutions.


Tourism is another area which has huge potential but remains neglected. Health services too have been neglected which is strange given the high incidence of drug addiction and cancer and high cost of hospitalisation. The health infrastructures like PHCs and CHCs, availability of doctors etc. have witnessed sharp decline. There is a need to substantially increase public investment in health but the new government should better form a comprehensive health policy for the state first.

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