Punjab woos new investors; but faces flak from existing ones

CHANDIGARH: Despite carrying pro-farmers image, the SAD-BJP government in Punjab managed to woo industry by rolling out red carpet for investors and offering "unprecedented" tax incentives during the year.

The state hopes to attract investment proposals worth over Rs 65,000 crore firmed up during the maiden two-day Progressive Punjab Investors Summit towards the end of 2013.

Already facing "dismal" financial position, Punjab government's efforts to mobilise additional revenue through higher property tax, introducing anti-tax evasion measure E-Trip and levying advance tax on a host of commodities came under fire from a large section of state industry.

The trading community termed such moves as "harsh" and "unjustified".

One of election promises of turning state into power surplus came to near realisation as Punjab saw commissioning of two coal-fired thermal power plants--Talwandi Sabo (660 MW) and Rajpura thermal power plant (700MW) towards the end of the year, albeit after failing to meet several deadlines.

As far as neighbouring Haryana state is concerned, the Bhupinder Singh Hooda government, sensing slower pace of investments into SEZ projects, came with a new policy in the mid of the year.

It decided to allow SEZ developers to convert their projects into industrial colonies or cyber cities with a clear intention to provide relief to them.

On the agriculture side, wheat procurement from Punjab and Haryana dipped by a whopping 30 per cent on account of adverse impact on crop output due to inclement weather conditions near the time of harvesting.

However, basmati growers saw their income growing because of good export demand.

Aiming to bring down area under water-guzzling paddy crop, both Punjab and Haryana laid emphasis on encouraging growers to diversify into less water consuming crops like maize, sugarcane, agro-forestry, oilseeds, vegetables,pulses etc.

Armed with a new industrial policy which promises to offer a host of fiscal sops to new investments, the Punjab government presented the state as best investment destination in terms of infrastructure, skilled manpower, energy, among other things.

It managed to bring a galaxy of country's leading corporates including RIL Chairman Mukesh Ambani, steel cazar L N Mittal, Airtel Chief Sunil Bharti Mittal, ITC Chairman Y C Deveshwar at its investors summit in December.

Among major investments, Mukesh Ambani and Sunil Mittal, who showered praises on state government's efforts, promised to invest Rs 2,500 crore and Rs 4,000 crore respectively on digital infrastructure in the state.