FICO concerned about Punjab’s 19th ranking for ease of doing business

Says this is the high time that the state government should resolve the issues related to the industry

FICO concerned about Punjab’s 19th ranking for ease of doing business
Mr. Gurmeet Singh Kular, President, FICO.

Ludhiana: As per the Business Reform Action Plan ranking of states for Ease of Doing Business, as announced by Union Minister of Finance and Corporate Affairs, Nirmala Sitharaman, Punjab holds the 19th Rank out of 36 states in India, which itself is enough to describe the condition of Ease of Doing Business in Punjab.

Mr. Gurmeet Singh Kular President FICO said this is a matter of grave concern that the Ranking of Punjab in 2016 was 12th which has fall to 19th in 2019, which signifies that the investors will head towards the states like Andhra Pradesh, Uttar Pradesh, Telangana, Himachal Pradesh, Rajasthan etc, but not towards Punjab. This is the High time that the state government should resolve the issues related to the industry at the earliest to provide an industry friendly environment in Punjab, the government should immediately facilitate the industry with:  

No Enhancement Policy & OTS for Focal Point plot holders
almost 6 years back PSIEC issued a notice of Rs.249/- per square yard to Focal Point Phase VIII Allottees, which was finally settled at Rs.24/- per square yard. Now again PSIEC have again issued a notice and demanded Rs.474/- per square yard from Focal point Phase VIII allottees, whereas PSIEC have already taken 100% anticipatory enhancement. Now with inclusions of interest & other charges the cost has reached around Rs.1000/- per square yard, which is totally unjustified and unviable. As per the “No Enhancement Policy” of Haryana State Industries Development Corporation, the same should also be applicable in Punjab so as to facilitate the Industry of Punjab. The industrialists in Phase VIII Focal Point are demanding for One Time Settlement Solution with PSIEC, just like the Property Tax and other departments under the OTS Scheme.

Impact of Pending Enhancement Case
Due to the PSIEC Enhancement Pendency, the industry situated in Phase VIII is suffering a lot, as all the works related to all financial institutes including banks are stagnant so is the growth of the industry, as the financial institutes demand the Clearance Certificate from PSIEC, moreover, industrialists of Focal Point Phase VIII are not being able to adapt the Invest Punjab policy of government of Punjab, due to the given reason itself. Industry is already facing huge losses due to COVID-19, this is the time when the government should support the industry.

Infrastructure of PSPCL
It has been observed that existing 66 KV Power Feeding systems of Ludhiana are running to its maximum capacity, moreover Ludhiana is now a Smart City, considering the growth of a Smart City, the demand of power is on the rise, it is notable that more than 50 Industrial Connections in Ludhiana are pending due to feasibility limitation of the existing grids of Ludhiana. The biggest industrial grids in Ludhiana, Dhandari-1 & Dhandari-2 are running to their capacities, another grid is proposed, but the work on the same has not been started as yet, The pending 50 industrial connections one issued, will not only generate more revenue for the PSPCL, but also generate the revenue for the Government in form of GST, Property Tax, Octroi and other taxes. There is a need to upgrade the existing power distribution system of Ludhiana, FICO requests you to kindly get the power systems of Ludhiana strengthened before the summers, as the power demand will be on peak in summers.
Electricity @ Rs.5 per unit
The state government has promised to provide electricity to the industry at Rs.5 per unit, but still industrialist belonging to the MSME sectors are getting electricity bills at 10 to 15 rupees per unit; the state government should immediately look into the matter and provide the electricity at 5 Rs per unit to the industry.

Night Tariff
The Night Tariff should be introduced @ Rs.2.50/- per Unit to the industry, as Punjab is surplus state in terms of Power & due to COVID-19, there is not any high demands of electricity, especially at night time, so the benefit of surplus power should be provided to the industry in this hour of COVID-19 crisis, with the marginally lower rate of power at night as power is a raw material to the industry, It is notable that the huge amount of power is being wasted due to non-consumption at the night time as electricity cannot be stored, it can only be utilized so the industry should be facilitated.

Abolish of Cross Subsidy Clause
There is a clause which allows the industrial users buy & utilize the electricity from an open access, but for that also the industrial user needs to pay the cross subsidy of Rs.3.50/- per unit to PSPCL, which eventually raises the cost of open access electricity available at much lower prices. So it is requested to abolish the cross subsidy clause.

Designate the Mixed Land Use Area as Industrial Area
Ludhiana is known for its MSME Sector, majority of which operates from the Mixed Land Use Areas in Ludhiana like Janta Nagar, New Janta Nagar, Shimlapuri, New Shimlapuri, Dashmesh Nagar, Dhuri Line, Dholewal, Partap Nagar, Vishwakarma Colony, etc.; these industries have been working for last 60 years, majority of this industry falls under the Tiny & Micro Segment which operates on limited number of staff. These small units are the suppliers of the mandatory products to medium & large units. The industries in Mixed Land Use Areas are registered with the Government via Udyog Aadhar Memorandums, Government has allotted GST Number for industries to operate, PSPCL is issuing the industrial Power Connections in these areas, Moreover, these industries are registered with the Punjab Pollution Control Board. It is requested to kindly designate these mixed land use areas as the industrial areas.

Freight Equalization
There should be a freight subsidy for the north Indian exporters who have been far away from the seaports so that they should also be able to maintain competitiveness with those who are located near to the seaports. Rather the benefits of Freight Equalization Subsidy is available for the units availing the Invest Punjab Scheme, this benefit should be available to all the industry in Punjab, otherwise this will create a situation of competitiveness between the industries in Punjab itself. 

Technology & Incubation Centre in Ludhiana
A Technology & Incubation Centre at Ludhiana to Uplift & Modernize the Industry of Ludhiana at International Level to Compete with world. Our industry needs a center for technological assistance, where the industry can get technical assistance to improve their product & productivity. The Technology & Incubation Centre at Ludhiana is the need of the hour at Ludhiana, as the Industry is working on the old principles, whereas the technology went very advanced, and industry at Ludhiana need to update their technology in order to compete in international market.

Pending VAT Refunds before GST Period
Due to lockdown & curfew prevailing since more than a month now the Industry is facing working Capital shortages. The VAT refunds which are ranging in some hundreds of Crores are still pending with the government. Even after the completion of Assessments & issuance of various Circulars in the previous times, Relief is to reach at doorsteps of the Industry. This shortfall in Working Capital funds has landed the Industry in the trap of Loans & interest thereon leading to vicious circle of Capital erosion. It is requested to release the pending VAT refund at the earliest.

Pending Refunds of GST (State Portions)
The State portion of GST i.e. SGST in not being refunded to the fellow industrialist, which is resulting in limitations in Working Capital, heavy interests are being levied by banks on excessive usage of limits, it is industry’s own money, not a grant or subsidy. Tax refunds should be processes early, so as to facilitate the industry in this hour of COVID-19 Crisis.

Non availability of Major Anchor Units in Punjab
Despite providing alluring schemes in Invest Punjab, the Government has failed to attract the major industrial anchor units in Punjab, which is hampering the existing units in Punjab to flourish. The government should get some Major OEM’s in Punjab as soon as possible.