The northern states
viz. Punjab, Haryana and Himachal will see a major escalation in their GSDP
growth rates with the implementation of GST as the inter-state purchases would
see a significant decline of 5-6 percent in the prices of their raw materials and
finished goods, said Mr.
Gopal Jiwarajka, President, PHD Chamber of Commerce and Industry in a press statement issued here today.
The implementation
of GST would remove cascading impact of taxes and levies on their inter-state
purchases and would enhance their respective GSDPs by 2-3 percentage points.
GST will reduce the barriers between these states and will make the country a
common market. A wider tax base and better compliance will boost overall
economic growth of the country, he said.
Though predominantly Punjab,
Haryana and Himachal Pradesh are agrarian in nature, but the industrial sector
in the states has also emerged as a significant contributor in their economic
and social development, he said.
But all these three
States have increasingly focused on industrial activity and have enhanced the
industrial significance in their growth models for creating employment, he
added.
Now these States
play a pivotal role in the industrial development and manufacturing activity,
said Mr. Jiwarajka.
The share of Haryana in India’s GSDP (combined GSDP of all the States
in India) stands at 3.5%, followed by Punjab at 2.9% and Himachal Pradesh at
0.8%. The share of industry (secondary sector) in state’s GSDP of Himachal
Pradesh stands at about 41% , followed by Haryana at 29%, and Punjab at about
21%. The combined GSDP of Haryana, Himachal Pradesh and Punjab in India’s GSDP
(combined GSDP of all the States in India) stands at 7.4%.
Today, these states offer
favorable environment for attracting industrial investments through investor
friendly policies and better infrastructural support, he said.
These states are now on their way to
rapid industrialization through coordinated development of Small, Medium and
Large scale enterprises, he said.
These States are
dismantling barriers in markets for land, labour, infrastructure etc and
contribute in a massive way to help manufacturing sector achieve greater
heights, he added.
For improvement in the ease of doing
in the state, the state government must come forward for reforming labour laws in
order to implement minimum and uniformity across the States. Implementation of
reforms would also enhance the level of labour productivity. The current laws
make acquisition costly as well as tedious.
A robust land acquisition policy
would make availability of land much easier. Since land is the state subject,
states should ensure the adequate availability of land in terms of land banks.
Additionally an attractive relief and rehabilitation package is
essential for investment in infrastructure and manufacturing.
Further, the current overall cost of
setting up business in the states is very high which discourages the industries
as the Profit After Tax (PAT) obtained by industries becomes low. Thereby,
states should focus on reducing infrastructure and logistics costs to reduce
the transactional cost faced by industries, said Mr. Gopal Jiwarajka.
At the socio
economic front, these states have taken effective measures towards the
implementation of reforms in healthcare, education and in other indicators such
as reducing poverty and creating employment, he said.
We recommend setting up of 1 good
vocational training centre in the radius of every 25 kms across the states to
generate employment opportunities for the young population, he added.
Further, we recommend setting up of 1
good hospital with state of the art infrastructure in the radius of every 25
kms across the states for addressing the healthcare needs in the state, said
Mr. Jiwarajka.
The state of Punjab endowed with rich
culture, tradition and religion is predominantly an agrarian state and has been
accorded with the status of Granary of India.
The real Gross State Domestic Product
(GSDP) of the state has increased from Rs. 112997 crores in FY2007 to Rs 331940
crores in FY2016. However, the growth rate of real GSDP has been declined to
around 6% in FY2016 from 10% in FY2007.
Revistalisation of sectoral growth
coupled with diversified economic base and conducive industrial environment
with a special focus on the growth of MSMEs would go a long way to absorb large
proportion of unskilled, semiskilled and skilled workforce and push the
economic growth trajectory on high road.
We have prepared a roadmap to achieve
an 11% growth rate in the economy and to generate 2 million new employment
opportunities by 2020.
We will be releasing the details tomorrow under the
leadership of Hon’ble Chief Minister of Punjab, concluded Mr. Jiwarajka.
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