Medical device park coming up at Nalagarh fails to make headway

The state is grappling with a severe financial crisis but the government has decided to construct the medical devices park from its own resources and return Rs 30 crore to the Central Government received almost two years ago. The state government has so far released Rs 74.95 crore for the Rs 350-crore medical device park project but the fund crunch is severely affecting its execution.

Rs 250 cr loan to be raised

• A loan of ~250 crore will be raised from a bank to complete the project, says Industries Minister Harshwardhan Chauhan
• Already running behind schedule, the state government is yet to complete the construction work and allot plots to prospective investors almost two years after the project was kick-started
• A policy is yet to be framed to allot the plots
• Key works like setting up of laboratories, factories etc are yet to begin as only plots are being carved out

The park is being constructed over 1,623 bighas at Gheed and Teliwal villages of Manjholi gram panchayat in Nalagarh subdivision. To lure investors, the state government has to provide land to industrialists for Re 1 per square metre, electricity at Rs 3 per unit and water, maintenance and warehouse facilities for 10 years without any charges.

The government, however, believes that since most of the equipment manufactured in the park will be sold outside the state, it will cause a direct loss of State Goods and Services Tax (SGST) to the state exchequer. Therefore, to overcome this binding, a decision has been taken to build the medical device park from the state’s own resources. The state expects to benefit by Rs 500 crore in the coming five to seven years though this park.

The investors are not keen to invest in Himachal in the absence of any fiscal incentive. That only two units have been set up in the past three years in 20 industrial areas in the state testifies this fact. One unit has been set up under the Centrally-sponsored Product-Linked Incentive (PLI) scheme. It has been granted 100 per cent exemption from electricity duty for five years, 15 per cent rebate on energy charges for five years, 100 per cent exemption on stamp duty and registration fee, besides subsidised land at the rate of Re 1 per sq m to facilitate its operations here.

Already running behind schedule, the state government is yet to complete the construction work and allot plots to the prospective investors almost two years after the project was kick-started. A policy is yet to be framed to allot the plots. Key works like the setting up of laboratories, factories, etc, is yet to even begin as merely plots have been carved out and some infrastructure work is underway, says sources in the HP State Industrial Corporation, which is handling the construction work.

Industries Minister Harshwardhan Chauhan says that a bank loan of Rs 250 crore will soon be raised to complete the project by the year-end. Since liabilities like subsidised power, land and subsidy on maintaining the warehouse woll drain the state’s finances, it has been decided to develop the project from the state’s resources.

Himachal Pradesh was along with other states, namely Uttar Pradesh, Tamil Nadu and Madhya Pradesh, were sanctioned the park project under the Centrally-sponsored scheme under which Rs 100 crore is provided to every state. The scheme was launched to reduce the dependence on the import of medical devices.