Chandigarh, July 7
The Punjab Chief Minister’s advisory committee on industrial growth and development of relevant infrastructure has recommended a proactive industrial policy and stressed on refurbishing government credibility and confidence-building among entrepreneurs to attract investment.
The committee, headed by former Chief Secretary, A. S. Chatha, in its 36-page recommendations for a new industrial policy has desired the creation of an efficient and cost-effective infrastructure, human resource development, positive policy environment and good governance to attract new enterprises and resuscitate the existing ones, particularly small and tiny units that are burdened with outdated technology and equipment and suffer from inadequate market linkages.
The recommendations are prefaced with a brief note on reasons for failure of industrial development in the state after the mid-eighties. It has apportioned a part of the blame to recession, economic slowdown and militancy, as also finding faults with the state financial institutions — the Punjab Financial Corporation (PFC) and the Punjab State Industrial Development Corporation (PSIDC).
Despite the financial constraints faced by Punjab and notwithstanding what the Disinvestment Commission has suggested in respect of public sector undertakings (PSUs), the report favours the revival and restructuring of the PFC and the PSIDC by improving their cash flow and profitability in the future interest of small and tiny units.
The report has recommended various ways to salvage the PFC and the PSIDC as well as upgradation of the existing units and helping new ones. The steps include introduction of a mechanism similar to the BIFR (Board for Industrial and Financial Reconstruction), exclusively for the state to cover such units that are not covered under this. Some states have done this, why not Punjab? Likewise, it wants SIDBI and the IDBI to share some of the financial burden of the states when loan and equity cases are decided.
The suggested industrial policy contains a string of ‘’incentives,’’ including payment of arrears of sanctioned incentives that were promised but not paid. The piled up arrears are to the tune of Rs 500 crore.
The suggested mode of payment is through state guaranteed and redeemable bonds, which should be marketable, so that eligible entrepreneurs can appropriate them for discharging their liabilities towards financial institutions and government departments or for raising loans. And entrepreneurs eligible for incentives by the cut-off date should
