Young states push for growth, ignore environment

The relatively younger states in India are making a big push for industrialisation. In the process, they are eating into fertile agricultural land, circumventing environmental concerns and dispossessing people. bidisha kumar tracks policy trajectories in Uttaranchal

Published: Thursday 30 November 2006

Young states push for growth, ignore environment

-- (Credit: Samrat Mukherjee / CSE)PRIME agricultural land in the fertile terai of Uttaranchal is being acquired to set up industrial estates in the districts of Udham Singh Nagar, Nainital and Haridwar. Mining and topsoil quarrying are compounding the problem of agricultural retreat in the terai and the hills.

Following its new industrial policy of 2003, Uttaranchal has achieved an impressive industrial growth rate of 18.18 per cent in 2006 compared to the national growth rate of 10.1 per cent. This is a quantum jump from the 1.9 per cent achieved between 1993 and 2000 by the districts that now comprise the state. Uttaranchal was separated from Uttar Pradesh in late 2000. Both the public and private sectors are involved in the industrial push. The State Industrial Development Corporation of Uttaranchal Ltd (sidcul) has been deployed, for instance, to acquire land and set up industrial estates, which it is doing at a fairly fast clip.The corporation has already established 152 heavy and medium-scale industrial units on fertile land in the terai-bhabar region of Haridwar, Sitarganj, Kashipur, Bajpur and the Rudrapur-Pant Nagar University belt in Udham Singh Nagar district. Private sector growth is also proceeding apace -- whether through direct acquisition of land or the good agencies of the government.

The growth in private investment has been facilitated by an array of sops to big players in the form of single-window clearances, subsidies, cheap land and tax concessions. A 100 per cent central excise waiver for 10 years lasting till 2013, a complete exemption from income tax for the first five years followed by a 30 per cent exemption for the following five years, a central transport subsidy till 2007, applicable to firms located within a 5-km radius of industrial estates, are part of the deal that is making Uttaranchal an attractive investment destination. Nearly Rs 24 crore has been released to industries in Uttaranchal till date as subsidies.

Down to Earth But it's just the big players that are getting the windfall benefits. The small-scale sector has been left out of the loop. "Hardly any incentive has been given for the growth of the large number of rural and small-scale units, numbering more than 30,000 and 40,000 in the state," says Ajay Rawat, professor and head of the department of history, Kumaon University. The traditional handloom sector has been hit worst. Small-scale units that need 0.2 hectare (ha) of land to set up their factories, for instance, pay premium rates. "The cost of this land is pegged at an unjustly high rate of Rs 130 lakh per ha compared to land for big business groups, which get a cheaper rate (see table Small beer). Clearly, the intention of the government is to leave small players by the wayside," says Rawat.


Uttaranchal's growth push discounts long-term concerns
[Nov. 30, 2006]

Subscribe to Daily Newsletter :

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.