Cash-strapped Uttaranchal embarks on industrialisation. However, its policies are frightfully blind to green issues

-- (Credit: EMKAY)Cash-strapped Uttaranchal's industrial policy, unveiled last month, primarily aims to create an investor-friendly climate. Nothing wrong with drawing up a roadmap for recovery, except that it makes no reference to a symbiosis between economic activity and environmental conservation. The Uttaranchal government has, within a short span, separately announced a slew of measures to prop up key sectors such as ecotourism, agriculture and mining. Now, an industrial vision is being prepared for the region. In the event that ecological concerns are lost sight of while conducting even this exercise, the forest-rich hill state is sure to find itself on a slippery slope.

The build-up to the proposed transition has been characterised by the state government eyeing big investment, local industry pitching for preferential treatment and experts striking a note of caution. "The authorities have failed to promote local entrepreneurs. Instead, they want the big players to come and resurrect the sector," laments a Dehradun-based industrialist.

There is no denying that rural and small-scale units, numbering more than 30,000 and 40,000, respectively, have been given short shrift in Uttaranchal. The handloom sector is a glaring example. Though areas such as Ranikhet and Pithoragarh have made a name for themselves as makers of shawls and carpets, yet they are suffering from gross neglect. The path outlined in the new policy, too, leaves them by the wayside.
Tunnel vision Industrial Policy 2003 of Uttaranchal will remain in force for the next five years. It envisages rapid industrial development of the state and lays down a "comprehensive framework" to facilitate the same.

The main features of the plan are:

l To create world-class infrastructure.

l To promote private sector participation in developing industrial estates and growth centres, as well as in generating and distributing power.

l To promote scientific exploitation of mineral resources.

l To provide special attention for setting up industries in remote areas.

Significantly, the document does not so much as mention the word "environment"!

In January, the Union government had also announced a package of fiscal and non-fiscal incentives for the state. Coupled with the new policy, these steps offer a bonanza to companies that come forward to set up shop in Uttaranchal -- from a 100 per cent central excise exemption for 10 years, to a complete income-tax waiver for the first five years and a 30 per cent exemption for the next five years. Additionally, they would be eligible for a central transport subsidy till 2007. Multiplexes would not be required to pay any entertainment tax for three years, and amusement parks and ropeways can avail themselves of the same benefit for five years.
Green issue, grey area To be sure, the sops announced by the Union government will not be applicable to polluting and hazardous industries such as coal washeries, coal-based foundries, tanneries, and insecticide and plastics manufacturing units. A 1989 notification of the Union ministry of environment and forests already restricts the siting of polluting industries in Doon valley. "These curbs will continue to be in force," points out R S Tolia, chairperson, Uttaranchal Pollution Control Board, Dehradun.

An office-bearer of the Dehradun-based Kumaun Garhwal Chamber of Commerce and Industry counters: "What of the areas outside the valley? The state government's sole objective is to attract capital. Pollution issues are, therefore, bound to be sidetracked in the long run." Tolia maintains that things would not come to such a pass, because "the thrust will be on agro-based industries".

But S Srinivasan's candid statement on the matter leaves room for doubt. "We are looking at the environment only in a generic sense and not delving deep into the issue," he admits. Srinivasan represents Dalal Mott-McDonald Consultants, the Delhi-based group in charge of preparing the industrial vision for Uttaranchal.

Most experts are of the view that Uttaranchal should not pass up this opportunity to project itself as a green state. "It could actually become the state's unique selling proposition and attract more investment," opines R Sreedhar of the Academy for Mountain Environics (ame), a Dehradun-based non-governmental organisation (ngo).

Meanwhile, in compliance with a Union government directive, Uttaranchal's state of the environment report (soe) is in the pipeline. The decentralised infrastructure division of the Industrial Development and Finance Corporation (idfc) has been entrusted with the job, and ame is its local partner. The report is expected within nine months. "So far the majority of the soes (prepared by other states) have been data inventories. We would like to focus on industrial development that is sustainable for a hill state like Uttaranchal," reveals Sreedhar.

Priority areas
The Union government has taken the initiative in this regard, identifying sectors such as horticulture, medicinal and aromatic herbs, wool products and mineral water bottling for the state (see table: The right choice).

The right choice
Non-farm sector industries which can thrive in Uttaranchal
District Potential Activities
Hardwar Agro-processing, cane and bamboo cultivation, tourism and transport
Nainital Gemstone cutting and polishing, forest-based industries, tourism
Almora Fisheries, tourism
Pithoragarh Cultivation of medicinal plants, horticulture, tea processing and manufacture of woollen garments
Dehradun Information technology, biotechnology, tourism, cultivation of organic food
Tehri Handloom products and micro-hydel power generation
Uttarkashi Agro/fruit processing, cultivation of medicinal plants and tourism
horticulture & organic farming: "Uttaranchal is ideally suited for the cultivation of organic foods. Barring small areas in the plains, hardly any chemical pesticides are used in the state," asserts Rajesh Khanna, a consultant with Dalal. "Despite tremendous potential for growing fruits, vegetables and spices ... the hill districts import nearly 90 per cent of (the produce) from adjoining foothills and plains," notes a report released by the National Bank for Agriculture and Rural Development (nabard).

"The state government needs to concentrate on these areas rather than opting for large-scale manufacturing industries," avers Anil P Joshi, head of Himalayan Environmental Studies and Conservation Organisation, a Dehradun-based ngo. nabard has recommended that local growers should be given concessions to facilitate transportation and marketing of their produce. Assistance must also be provided to strengthen processing technologies to bolster the horticulture sector.

medicinal & aromatic herbs: Several varieties of such plants are abundantly available in the state for extraction -- 17,100 tonnes annually, according to nabard estimates. "So far, the segment has been hamstrung by the absence of a clear-cut strategy," concedes a senior official of the Uttaranchal government. "Worse still, this has led to the sprouting of an illegal market," he adds. After being extracted on the sly, around Rs 600-900 crore worth of herbs are believed to be smuggled out to cartels in Delhi and Himachal Pradesh. Ironically, the same consignments are bought in Delhi at exorbitant prices by medicinal plant-based industries located in Hardwar. Herbs produced in Uttaranchal, therefore, make their way back to the state, but only illegal traders gain in the bargain.

Pushp Jain, a Delhi-based consultant, has recently submitted a new policy to the authorities to tide over these problems. Jain was commissioned by the International Development Research Centre's India chapter. "We have laid emphasis on appropriate stakeholders being given charge of the processes involved so that the sector can flourish," says Jain.

"The Union government will have to distinguish between land-use and forest policies," stresses the state government official. Sreedhar concurs and adds: "While van panchayats should be allowed to cultivate medicinal plants, local villagers can be made responsible for extraction and upkeep."

The government seems to be listening. "By the end of this year we will become the first state in the country in which every revenue village will have its own forest," Tolia tells Down To Earth (dte). " Van panchayats will manage these forests and use them for forestry purposes like cultivation of medicinal plants, fodder and bamboo," he adds.

mineral water bottling: Players belonging to this sector have undergone a bitter experience in the past. Bottling plants mushroomed in the region after the state government promised to give them several sops. Not only did these industries have to pay higher transportation costs since they were sited in far-flung areas, the local authorities also reneged on their assurances and slapped stiff levies. "This made the plants financially unviable," points out an industrialist, and adds: "Today, almost all units have closed down."

ecotourism: The idfc had, sometime back, declared Uttaranchal a pure tourism state. The annual revenue from tourism is reportedly Rs 12,000 crore at present. The amount could go up to Rs 16,000 crore in the near future. "Last year the state earned Rs 1.02 crore from various ecotourism activities alone, and the projected returns this year are Rs 1.5 crore," reveals Rajiv Bhartari, conservator (ecotourism), Uttaranchal government. "We need to have a shared vision between industry, government and local communities to promote ecotourism," he adds. "The potential of tourism in Uttaranchal can be gauged from the effect of the installation of the ropeway at Maa Chandidevi temple in Hardwar. The structure resulted in the number of tourists rising from 50,000 in 1996 to 0.65 million in 2000," observes a media report.

As of now, the authorities seem to be assessing the situation. "We are trying to spot the constraints to development as well as taking stock of the resources available," Khanna informs dte. Sreedhar sees a greater role for local civil society organisations. "External consultants can't cope with internal problems," he contends. "Local ngos are being ignored because they may raise pertinent socio-ecological issues, which would not fit into the state government's scheme of things," alleges Sreedhar. "We are looking at a smokeless industry only," retorts the official.

It remains to be seen whether Uttaranchal takes the route less trodden or the high road to disaster.

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