With a week to go before the Union Budget, Uttarakhand Chief Minister B C Khanduri today expressed the hope that the Centre would extend the 2003 tax holiday scheme by three years. With Himachal Pradesh, the other beneficiary of the scheme, Khanduri plans to launch a joint campaign to secure the extension.

“This is my long-standing demand that the industrial package should be extended till 2013 and my expectations are high from the Union Budget,” Khanduri told Business Standard. Neighbouring Punjab has launched a campaign against the tax breaks, claiming revenue losses.

Khanduri said it was wrong to withdraw the tax incentives just because companies were setting up new units in Uttarakhand. “I want the Centre to examine the factual position before taking a stand,” he said.

If the Centre withdraws the tax sops by 2010, as planned, it would adversely affect the new hill industrial policy announced recently by the state.

“I cannot give industries the benefit of central tax exemptions. So it is very important that the tax holiday scheme continues till 2013,” Khanduri said. Otherwise, he said, companies may move out of Uttarakhand.

Khanduri pointed out that he had already urged Prime Minister Manmohan Singh to extend the package till 2013, a demand supported by the industry associations in Uttarakhand.

Khanduri said that he had raised the issue in the recent National Development Council meeting and also with the Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia.

Khanduri said he would talk to his counterpart in Himachal Pradesh, Prem Kumar Dhumal, on the issue and launch a joint campaign in this respect. “Our concerns and Himachal’s are very similar,” he said.

Uttarakhand has seen an industrial boom of sorts after the special tax holiday scheme of January 2003 was announced. Leading companies like Tata Motors, Bajaj Auto, Nestle, Mahindra and Mahindra, Britannia and LG set up new units to take the benefits of the incentives.

Khanduri pointed out that former Prime Minister A B Vajpayee had announced the industrial package for Uttarakhand for 10 years.

But the United Progressive Alliance later curtailed the package to seven years. The need, he said, was to extend the package to cover 10 years.

News Source: http://www.business-standard.com

The Uttarakhand government appeared to have started cracking the whip on all those industries which are taking benefits of the tax holiday scheme but have not begun any construction or production.

A total of 20 industrial plots have been cancelled so far and all others, which have not started their production, are being given notices, top officials today said.

The plots of these industries were cancelled after they failed to start construction work at the industrial estates developed by State Industrial Development Corporation of Uttarakhand Limited (SIDCUL). While eight industries are from Haridwar, 12 are from Pantnagar, they said.

The plots were cancelled after Chief Minister BC Khanduri took serious note of all those industries, which were allotted industrial plots but did not start any construction work. The industries whose plots were cancelled include PSR Aqua, Gauri Shankar Alloy, Essar Jee Udyog, Veekay Polycot, Tarmit Shri Kunj, SB Industries and Indica Foods.

However, under the SIDCUL’s policy, these industries can apply for restoration of their cancelled plots, the sources said.

Under these provisions, the government would ask all these defaulting industries to furnish a bank guarantee of Rs 5 lakh and complete construction in six to nine months.

In case the industries fail to meet the provisions again, the allotment would be cancelled, the official said. This was being done after these industries gave fresh representation to SIDCUL pleading that their plots should not be cancelled and that they were ready to start construction immediately.

When contacted, government officials said nearly 15 to 20 notices had been served to various industries in Pantnagar which have not started production so far. These industries have been asked to start production immediately, the official warned.

News Source: http://www.business-standard.com

The Annual Plan outlay for Uttarakhand for the year 2008-09 was finalized at a meeting, here today, between the Deputy Chairman Planning Commission, Shri Montek Singh Ahluwalia and Chief Minister of Uttaranchal Shri B C Khanduri. The Annual Plan size was agreed at Rs. 4775 crores. This includes additional Central assistance of Rs. 300 crores for infrastructure needed for Kumbh Mela and SAF Winter Games and other projects of special interest to the State.

Commenting on the performance of the State, Deputy Chairman Planning Commission, Mr. Ahluwalia said that growth rate was good and even plan expenditure during the tenth plan is encouraging but per capita income remained rather low. Achievement in the agriculture sector was commendable. However, the poverty level was much higher than those at the all India level or in Himachal Pradesh in both rural and urban areas. This shows that topmost priority should be given to creating livelihood opportunities.

Appreciable achievements have been reached in the tourism sector during tenth Plan period and needs to be carried forward as the State has immense potential for becoming a world class tourist centre. The State offers all types of tourism like pilgrimage, cultural, adventure, wildlife and eco-tourism. To develop high value tourism, the State should focus on developing adequate infrastructure facilities at the destinations and circuits.

On industrial policy, it was pointed out that the policy seemingly was driven by subsidy. Efforts should be to have a comprehensive plan of action for identified industries. Benefits of concessions should reach far-flung areas.

Briefing the Commission on the pace of development, Mr. Khanduri said that emphasis would continue on social sector. This is clearly reflected in both Eleventh Plan and Annual Plan proposal. Over 37 percent of plan outlay would be ear-marked for social services. He said efforts are on to further accelerate development of infrastructure and for this purpose four projects are being executed through external aid. These would be in roads and bridges, urban infrastructure, power and tourism development. He sought additional support from the Centre for Haridwar Maha Kumbh in 2010, South Asia Winger games and additional grant to support earthquake affected people.

Mr. Khanduri said that the Centre should supplement efforts to bring at par with other developed States and in view of the state of industrialization, tax holiday period should be extended upto 2013. he also sought Central support in tackling problem of silting of dams.

News Source: http://pib.nic.in

Press Release – Asia Development Bank

The Asian Development Bank (ADB) will provide a $350 million loan to improve urban infrastructure and services in 31 towns and cities in India’s mountainous northern state of Uttarakhand, one of the country’s top tourist destinations.

Despite its attractiveness to visitors with its dramatic landscapes and rich cultural and religious heritage, Uttarakhand is one of India’s less developed states. Health indicators are below the national average and about a third of the state’s 8 million residents are impoverished.

ADB has identified Uttarakhand as one of its priority states in India because its development is lagging behind other states. Improved urban services are needed to support tourism and industry – two economic sectors with substantial development potential in the state.

“The prospects for the growth of industry and tourism in Uttarakhand are contingent upon the availability of infrastructure and services in urban centers that will support this economic growth and cater to the needs of a rapidly growing urban population,” said Ms. Gulfer Cezayirli, Principal Urban Development Specialist with ADB. “However, the potential role that urban areas can play in Uttarakhand’s development is constrained by limited urban infrastructure and services.”

Water supply is poor in Uttarakhand towns with most houses only getting water for a couple of hours a day. Only two towns have sewage treatment facilities, with the majority of wastewater being dumped into water courses – a major environmental and health risk in the state, which is the source of the Ganga and Yamuna rivers.

Less than half the solid waste generated is collected. Much of it is dumped in drains or hill slopes. Urban roads are inadequate. Traffic volumes have doubled in the past decade and are expected to double again in the next 10 years.

The ADB-financed Investment Program will improve the quality of life of about 3.8 million urban residents projected to be living in Uttarakhand by 2016. The Program’s 31 towns and cities were chosen because they are expected to lead industrial and tourism growth. In addition to ADB’s $350 million, which will be provided in a multi-tranche loan, the Government of India will invest $150 million.

Under the Investment Program, the quality and quantity of water supply will be improved to meet national standards. About 60% of wastewater from the towns and cities will be properly collected and treated. Nearly three-quarters of all solid waste will be collected and disposed of adequately. The road network will be improved to shorten travel times and increase road safety. Investments will also focus on improving the conditions of slums that are home to about 300,000 people.

In addition, part of the funds will be used to improve the capacity of relevant state departments, urban local bodies, and other urban service providers to ensure that they have the ability to manage and deliver urban services efficiently and on a sustainable basis.

While this is the first urban sector assistance of ADB in Uttarakhand, ADB, to date has provided India with nearly $3 billion for urban development in other states, with its assistance focused on poverty reduction through shared growth, social development, and good governance.

News Source: http://www.harolddoan.com

The Uttarakhand government today announced its new industrial and power policy with a focus to attract investments in the hilly region of the state.

Following a cabinet meeting, Chief Minister B C Khanduri told reporters that a special package has been prepared for the hilly region under which special tax incentives would be given to industries, setting up their units in the hills for a period of 10 years.

The special package would remain in force for a period of ten years beginning from April 1, 2008, he said.

Under the new industrial policy, the government has made special provision for creating private industrial estates at an area comprising only 2 acres of land. Earlier, such facility was extended to 30 acre-long industrial estates under the industrial policy announced in 2003.

All those industries which are having an investment of Rs 5 crore has been given the status of big industries, a status which was earlier given to all industries with investment of Rs 50 crore in the state.

Special incentives including rebate in power tariffs would be given to all those industries which set up their units in the hills, Khanduri said.

The government also announced its new power policy in the cabinet meeting. Under the new power policy, the government would give special focus on small hydro projects and involve village panchayats in building hydel projects up to 5 MW.

News Source: http://www.outlookindia.com

Uttarakhand Chief Minister Bhuwan Chandra Khanduri has warned that land allotted to various industries will be taken back if the entrepreneur does not establish the unit within the stipulated time.

“Uttarakhand is striving for development and only those genuinely interested in the State’s welfare are welcome,” he said.

Instances of people getting land allotted and not establishing their units and attempts by certain parties to use the premises as a mere assembling area have come to light and the Government would take strong steps to stop this practice, he warned.

Jobs for locals

The industries would also have to ensure a 70 per cent reservation in jobs to locals so that the community also benefits, he added.

Advocating the need for a balanced industrial growth all over the State, the Chief Minister urged government officials, local youth and investors to jointly come up with proposals that could catapult the village economies. The youth must get trained in value addition of farm produce and marketing skills and the trade confederations and social activists should come up with special programmes to impart the necessary skills, Mr. Khanduri said.

News Source: http://www.hindu.com

The Central Electricity Authority (CEA) has stayed the approval of the Rs.43-billion ($1.1 billion) Lakhwar Vyasi hydroelectric project on Yamuna River in the hill state of Uttarakhand on technical grounds.

CEA declined to appraise the detailed project report (DPR) submitted for the 420-MW project, saying the agreement signed by Uttarakhand government and proposed developer National Hydroelectric Power Corp (NHPC) for implementing the project has expired, a senior CEA official said.

The agreement signed by NHPC with the Uttarakhand government for the project expired Oct 31 last year, the official added.

‘In view of above, it may be appreciated that revival of DPR by CEA for examination for concurrence is not feasible till implementation agreement is signed by NHPC with government of Uttarakhand,’ CEA has told NHPC.

CEA has advised NHPC to sign a fresh agreement with Uttarakhand for executing the project before seeking its approval, the official told IANS.

NHPC expects to complete the project in 54 months after securing approval and clearances.

The proposed hydroelectric plant is expected to generate 1,050 million units of electricity a year.

Tariff for the power generated at the project is expected to be Rs.3.77 per unit of electricity at the currently estimated completion cost of Rs.43 billion.

News Source: http://www.earthtimes.org

Norms for projects coming under the public-private-partnership (PPP) model in Uttarakhand have been made transparent with the government setting up an appraisal committee for clearing such ventures.

The six-member committee, headed by the principal secretary, finance, would examine only those PPP projects where capital investment would be Rs 5 crore or more, official sources said.

A government order (GO) to this effect was issued today, the sources said. All other projects where capital investment is less than Rs 5 crore need not be brought before the committee, the sources said.

In the fist phase, the department concerned has to prepare a feasibility report and other details related to the projects before sending them to the planning and finance departments for approval on principle.

The move comes in the wake of certain projects running into controversy during the past five years. Recently, the Sitarganj industrial estate project has come under the scanner, following which a judicial probe was ordered by the government.

Once approval on principle is given, the department concerned can invite a “request for qualification or expression of interest”, the sources said.

In the second phase, the department has to get clearance from the appraisal committee.

But before going to the appraisal committee through the planning department, the department has to prepare all agreements like the concession agreement and project agreement related to the particular project and enclosed these reports with the proposal.

When all these clearances have been made, the project can be put up before the competent authority on the basis of rules of business.

Top officials, however, made it clear that all these norms are only applicable on projects coming under the PPP mode.

News Source: http://www.business-standard.com

Amid reports that a large chunk of agri land has fallen into the hands of land builders and industrialists in Uttarakhand, the state government is contemplating Special Agriculture Zone (SAZ) to protect agriculture.

“We want to protect agriculture, for which we want to bring SAZ in Uttarakhand,” said state Agriculture Minister Trivendra Singh Rawat.

However, Rawat made it clear that the idea of SAZ was not being mooted to replace the much contentious special economic zone (SEZ).

For the purpose, Rawat said, he had asked experts from Pantnagar Agriculture University to prepare a blueprint of SAZ.

But it was not immediately known whether SAZ would form a part of the new agriculture policy, which is being discussed by the government.

The government is bringing the new agriculture policy to clear whether the agri land can further be given for SEZ and other industrial purposes.

Significantly, the decision to bring a new agriculture policy comes close on the heels of Nandigram episode in West Bengal where the Left-Front government is facing the wrath.

“Our main aim is to protect agriculture land, which is falling in the hands of land mafia and builders,” Rawat said.

The government has also toughened laws pertaining to purchase of revenue land in the state by amending present laws.

In the new agri policy, the government would focus on setting up of more mandis across the state, particularly in the hilly areas where farmers don’t get fair price for their yields. “The new policy would safeguard the interest of both farmers and consumers,” the minister said.

Contract farming would be promoted, he said adding the role of agents would be minimised so that farmers could get much better price for their produce.

Special sops like electricity and water supply and seeds at cheap rates would be provided to farmers, he added. In addition to this, toll free call centres for farmers would also be set up across the state.

News Source: http://www.business-standard.com

A treaty for 6,000 MW Pancheshwar (in Champawat district) multi-purpose project was signed between India and Nepal in 1996

New Delhi: The 6,000 MW Pancheshwar multi-purpose project, for which a treaty was signed between India and Nepal in 1996, is yet to see the light of day for lack of consensus between the two countries on a rehabilitation policy.

The project, which would cost nearly Rs. 30,000 crore over 10 years, also does not have a detailed project report (DPR) yet.

According to official sources, the project which seeks to build a storage dam on Mahakali River at the boundary of India and Nepal, would lead to submergence of 60 villages affecting about 19,700 people in Pithoragarh and Champawat districts of Uttarakhand.

Nearly 80 per cent of the total catchment area for the project would be in India and the rest in Nepal.

The sources said in India agreement on many issues among various States has to be reached with regard to this project.

“At that time, Uttarakhand can think of rehabilitating the oustees in Uttar Pradesh… in Uttarakhand there is an acute problem of availability of land,” the sources said.

Also, the sharing of electricity between the countries has to be addressed when the DPR is finalised and an agreement for construction with Nepal is signed.

“No agreement has been finalised so far. The issue has to be decided on the basis of ‘Mahakali Treaty’ between India and Nepal,” the sources said.

The treaty on development of Mahakali river, known as Sarda in India, had been signed between the countries in February 1996, and came into force in June 1997.

The Pancheshwar project would also facilitate regulated release of water contributing to development of irrigation potential and control flood downstream.

There is also a proposal to construct a regulatory dam downstream of Pancheshwar dam.

While India wants to construct it at Purnagiri in Uttarakhand, Nepal is interested in building it at Rupaligarh so that the relief and rehabilitation problem in Nepal in minimised.

Two high-level committees — India-Nepal Joint Committee on Water Resources was formed and the Joint Group of Experts — were formed for speeding the project. — PTI

News Source: http://www.hindu.com