29 august 2024 : Reeling under heavy debt and low investment, Punjab on Wednesday received a booster dose from the Centre with a Cabinet meeting, chaired by PM Modi, approving Rajpura as one of the 12 sites for smart industrial city projects. The projects are to come up as a “grand necklace” on the golden quadrilateral that connects the country’s major industrial, agricultural and cultural hubs.
The entire plan under the National Industrial Corridor Development Programme will be worth Rs 28,602 crore, with Rajpura industrial city alone approved at a cost of Rs 1,367 crore. The 12 cities have an investment potential of Rs 1,52,757 crore and are expected to generate 9.39 lakh jobs. The investment potential for Rajpura is Rs 7,500 crore and it can generate 64,204 jobs.
Speaking to The Tribune about the Rajpura project, Commerce Minister Piyush Goyal said 1,099 acres of land had been acquired and fenced. “We are ready to start the project. I met Punjab CM Bhagwant Mann and he has assured of full support. With the state’s cooperation, we can complete the project in three years,” Goyal said, adding the land was free and the project ready to roll.
Rajat Kumar Saini, the chairman of National Industrial Corridor Development Corporation, which will power the project across all 12 sites, said he had visited Punjab to assess the situation and found everything in place. “We will start work in three months,” said Saini. The development comes at a time when certain national highway projects in Punjab have been stalled due to multiple challenges, including land acquisition.
About investment potential, Saini said the Rajpura industrial city could become a hub of electronics system design and manufacturing. Located at a 35-minute drive from the Chandigarh airport and connected with road and railway network, the city would also be in a position to woo investors in food and beverages, pharmaceutical, machinery, textile and rubber and plastic sectors, he said.
The Cabinet has assessed these sectors as potential investor sources for the project in Punjab, which is among the top indebted states of the country. Punjab was among 12 states red-flagged by the RBI for fiscal mismanagement. It was on top of the ladder with a debt of more than 35 per cent of the gross state domestic product at the end of the last financial year.
Punjab has also been struggling to woo investors. In the pre-Fiscal Responsibility and Budget Management Act (2005) period, Punjab ran huge deficits due to the significant deviation in the state expenditure and revenue. “The Punjab Government indulged in competitive tax concessions and incentives to attract private investments, which negatively impacted its revenue generation. At the same time, it was unable to increase tax ratio and improve productivity of non-tax revenue due to political constraints. On the expenditure side, populist policies like free power for irrigation, hike in salary and interest payments increased the state’s spending. Several competitive tax concessions, including change in land use (CLU) charges, licence fee, stamp duty exemption and incentives to attract private investments, negatively affected the state’s revenue generation,” NITI Aayog had mentioned in its assessment of Punjab’s fiscal health.
The Cabinet approved one smart industrial city for Haryana too, but withheld the announcement due to the election code. The other 10 sites are: Khurpia in Uttrakhand, Dighi in Maharashtra, Palakkad in Kerala, Agra and Prayagraj in UP, Gaya in Bihar, Zaheerabad in Telangana, Orvakal and Kopparthy in AP and Jodhpur-Pali in Rajasthan. These industrial cities are envisioned as growth centers for transformation of the whole region.