Burdened with ever-increasing taxes for the past two years, industry is not only struggling to survive in the state but it is also unable to undertake substantial expansion, thus limiting the availability of jobs.
With limited avenues available with the state government, industry is a key option for securing jobs in Himachal Pradesh.
The state government, however, remains in a state of denial about the declining employment in the industrial sector and continues to paint a rosy picture. It claims that 1,328 new industrial units were set up while 71 existing units expanded their manufacturing capacity in the last two years in the state.
These figures were presented in the recent Vidhan Sabha session in response to queries raised by several MLAs. The government further claims that 2,651 persons were employed in the notified industrial areas. As per these figures, each industry — among the 1,328 new units or the 71 existing ones which undertook expansion — on average employed only 1.89 persons. This puts a question mark on the government’s claim of employment generation through industries.
While the government claims 33 units got themselves de-registered and none had closed, units like Hindustan Unilever at Baddi not only closed its operations but also rendered hundreds of employees jobless.
The state government is clearly in a state of denial about the declining charm of Himachal as an investor destination and is seeing the gradual exodus of industry.
The increasing burden of state-level taxes after the lapse of the central financial package emerges as the key reason. “Successive state governments have failed to do away with state-level levies like ‘Certain Goods Carried by Road Tax’ as well as ‘Additional Goods Tax’ despite the ‘one nation, one tax’ in the form of Goods and Services Tax having been implemented since 2017.
“This makes the industry uncompetitive vis-à-vis other units in the region and further impedes its growth,” observed Rajiv Aggarwal, president, Baddi Barotiwala Nalagarh Industries Association, which is a conglomerate of over 650 units.
In another blow to investors, the HP Electricity Regulatory Commission has withdrawn night charges of Rs 1 per unit that were available to all industries from 10 pm to 6 am. These charges are provided in all states like Punjab where night charges are at Rs 1.20 per unit, much to the discomfort of the state’s industry.
Not only this, the additional 15 per cent concession on power tariff available to industries undertaking expansion has also been withdrawn in the tariff for financial year 2025-26.
“The announcement of providing 20 paise concession per unit to the power-intensive units in the Budget by the Chief Minister has been nullified by the decision to do away with night charges and power has become dearer by 35 paise per unit,” rued Rajiv Singla, general secretary, HP Steel Industries Association.
The absence of jobs has hit the over seven lakh educated unemployed youth who are waiting for the Congress government to fulfil its promise of providing them one lakh jobs every year after assuming power in 2023.
Key central projects like medical device park have been abandoned due to lack of funds after the state government returned the central financial assistance, leaving little scope for generating employment. The other centrally aided bulk drugs park is running behind schedule.
