EFY REPORT Why Manufacture in ? Uttarakhand is going hi-tech in a big way. Credit goes to sops offered by the state government to manufacturers, to meet its objective of developing the state’s infrastructure and generate employment for the locals

nature of business. Suresh Gupta, director-operations at Intex Technologies (), too finds Uttarakhand other than Himachal Pradesh and Jammu in J&K as a good location for manufacturing of electron- ics for the same reasons. Mirc Electronics has already com- menced commercial production at its Roorkee unit in Uttarakhand. Videocon Industries too is setting up a plant to make home appliances in Uttarakhand. The plant would manu- facture a wide range of home appli- ances and help Videocon expand its Uttarakhand map courtesy: Rajiv Rawat, uttarakhand.net reach in northern India. HCL Infosystems’ manufacturing unit at Rudrapur, Uttarakhand, will  Uma Bansal panies are flocking to Uttarakhand, initially manufacture desktop comput- where there is full exemption from ers and LCD monitors and later would orth Indian states like Uttara- sales tax and no excise duty for ten also cover products like notebooks, khand and Himachal Pradesh years besides income tax benefits. servers and thin clients. Nare emerging as the most George Van Der Merwe, chief op- Hewlett-Packard India too has favoured destinations for electronics erating officer of Sahara Computers, followed the suit. It has launched its manufacturers because of sops offered says that Himachal Pradesh and Ut- second manufacturing facility in the by the state governments and good tarakhand are giving Special Conces- country at Pantnagar, Uttarakhand, for work culture. The state governments in sional Industrial Package to attract the its latest range of desktop computers, north India not only offer benefits like manufacturing companies for setting workstations, notebooks and servers. tax holidays, exemption from excise up their production units there. Set- duties and land at cheap prices, the ting up of manufacturing units in these Advantage Uttarakhand work culture there is good and there is states would boost the infrastructure Uttarakhand is a young state, having no militant trade unionism. and further accelerate the development been carved out of . It Surprisingly, former leading states of the states. was formed on 9th November 2000 and like Maharashtra and West Bengal Sahara has set up its manufactur- accorded special status by the central have now taken a back seat as far as ing unit in Uttarakhand because of government. the electronics industry is concerned. its proximity to Delhi, and other con- Within a short span of its existence, While cost of labour and power is high ducive factors like labour policy of the state has several good things going in Maharashtra, militant trade union- the government, cheap electricity and for it. With its vast natural resource ism and lack of good work culture water, tax benefits, subsidies for trans- base and enormous power potential, plague West Bengal. port, road infrastructure and proximity Uttarakhand holds the potential of be- A large number of electronics com- to airport, as it is comfortable for its ing one of the most prosperous states www.efymag.com electronics for you • march 2008 • 123 EFY REPORT in the country. Also, levels of literacy in the state are higher than the national Manufacturing Drivers average. These are just a few of the 1. The potential for power generation is enormous with a potential of 22,000 MW of reasons why it is attracting electronics hydropower capacity. and IT manufacturers. 2. The state is promoting establishment of industrial estates, industrial parks and growth State Industrial Development Cor- centre in the State. poration of Uttarakhand Limited (SID- 3. A dedicated IT Park to come up in Dehradun. 4. Vast pool of a natural resource adds to the state’s attractiveness as an investment CUL), a government of Uttarakhand En- destination terprise established in 2002, took up the 5. Abundant availability of quality human resource base at competitive rates. mantle becoming the nodal agency for 6. Uttarakhand compares favourably with the all-India aggregates in terms of the spread promoting industrial development in of basic infrastructural facilities. the state. It is transforming Uttarakhand 7. Investments in Uttarakhand enjoy a number of fiscal benefits like the concessional into India’s leading manufacturing hub industrial package offered by the state and the central governments. with the establishment of a number of 8. Tehri Hydro Development is one of the highest multipurpose projects to be built across integrated industrial estates. river Ganges Let’s see the potential existing in the state for electronics manufactur- Transport Subsidy Scheme of govern- Other drivers. Education, housing ers, taking into account the resource ment of India, 50 per cent of transport and medical facilities are fairly good. base available and the policy measures cost on the basis of rates decided by the Free trade zones have been provided that have been initiated by the state state government or actual freight paid, with lots of incentives such as conces- government, as also those about to be whichever is less, has been provided as sional sales tax, excise duty exemption initiated, to develop the potential. subsidy for up to five years from the and income tax exemptions. Government’s labour policy. The date of production. Also, there is no political risk as the government of Uttarakhand has cre- Road infrastructure and proxim- state government is quite pro-industry ated an environment conducive to the ity to airport. The state already has a and stable. The host community is very rapid and sustainable industrial de- good network and is also planning to helpful with no mental blocks. velopment of the state. It enhances the connect every village, town and city to flow of investments into the industry local economic centres and major cities Vision and strategy and infrastructure. By doing so, the in the state through a network of all- Uttarakhand has the dynamism of a government is looking at generating weather roads. The proximity to Delhi new state eager to exploit its resources additional employment opportunities international airport is another huge and potential to attract investments in and has developed a manufacturer- advantage that it enjoys. its areas of comparative and competi- friendly labour policy. Proximity to customers. Connec- tive advantage. The key elements of Cost of electricity and water. The tivity with other regions/target cus- this strategy can be identified: provision of uninterrupted power to tomer base is not a problem. In India, 1. The state wants to promote in- industrial units is one of the most cru- it is very difficult to be close and dustrialisation both in the organised cial factors for ensuring rapid indus- within the reach of all the customers. and small-scale sector. trial growth. In order to give a boost Further, economies of scale may not be 2. Finally, the objective is to exploit to the industrialisation, a special tariff achieved if you set up manufacturing its proximity to the National Capital has been introduced. With the com- at many places. Availability of a good Region (the large urban and industrial mencement of the Tehri Dam Project, transportation system plays a very cluster around ) to market. waiver of peak hour restriction for all important role to service customers 3. The state aims to promote lead- industries, including heavy industries, efficiently, quickly and effectively. Ut- ing-edge technologies and sunrise is also proposed. The state has abun- tarakhand is very well connected with industries in the areas of information dant water supply, which is extremely good infrastructure. technology and biotechnology. important for any manufacturing unit. Total cost. Total cost of manufac- 4. Public-/private-sector involve- Tax benefits/income tax. The com- turing is less due to the availability ment in generation of power and panies also enjoy the tax benefits in the of incentives to manufacturers when strengthening of the transmission and state. Tax benefits in Uttarakhand, for compared to the cost of manufac- distribution network will be encour- example, include 100 per cent central turing for the units located in other aged in the state. excise exemption for ten years. Besides areas. 5. To develop Uttarakhand as a this excise exemption, there is 100 per Suppliers/raw materials. Though premier research centre by leveraging cent exemption from income tax in the the state doesn’t have any raw mate- the presence of world-class research first five years of operations, and 30 per rial produced locally, however, being and technical institutes existing in Ut- cent exemption from income tax in the very close to the major hub, i.e., Delhi, tarakhand. next five years of operations. there is no problem in arranging raw The New Industrial Policy an- Subsidies for transport. Under the material. nounced in 2003 by the state govern-

124 • march 2008 • electronics for you www.efymag.com EFY REPORT

(UPCL) would be bifurcated into separate companies in the transmis- sion and distribution sectors. While UPCL would distribute and market electricity, a transmission corporation called Transmission Corporation of Uttarakhand would be set up soon and both the utilities would work independently. This has been done in compliance with the Central Electricity Act 2003, which has made it manda- tory for states to carry out the power reforms. The Cabinet has also decided to set up a power-trading corporation to sell electricity. Investment climate. Uttarakhand Proposed state-of-the-art information technology park at Dehradun government encourages private-sec- tor participation in development ment puts in place the regulatory Interest with SIDCUL, which entail an of infrastructure projects including framework for Uttarakhand’s indus- investment of around Rs 200 billion. specialised industrial estates and trialisation. The Policy indicates that Major industrial infrastructure be- special economic zones, export zones, private resources may be tapped while ing developed by SIDCUL includes: generation, transmission and distribu- promoting integrated industrial estates 1. Integrated Industrial Estate (IIE) tion of power, roads, airports, civic in Uttarakhand. SIDCUL was formed at BHEL, Haridwar infrastructure, etc. to attain the following objectives: 2. Integrated Industrial Estate at Institution mechanism: single- 1. Promote industrial development Pantnagar window contract. The single-window in the state 3. IT Park, Dehradun contract facility is available at the Dis- 2. Provide financial assistance in 4. Growth Centre at Pauri trict Industrial Centres at the district the shape of debt, equity and venture 5. Integrated Industrial Estate at level and State Industrial Develop- capital ment Corporation of Uttarakhand at 3. Develop infrastructure and as- the state level. Apart from providing sist private initiative in industry and Infrastructure policy information and escort services to the infrastructure The state of Uttarakhand gives specific entrepreneurs, the centres will also be SIDCUL aims to implement, man- concessions for infrastructure projects maintaining a data bank. age projects and provide specialised on merit basis. A joint venture compa- financial, consultancy and construc- ny called Uttarakhand Infrastructure Industrial infrastructure tion and provide all such activities to Development Company (U-Dec) has Uttarakhand compares favourably with promote industries and develop in- been set up by the state government the all-India aggregates in term of the dustrial infrastructure in Uttarakhand along with the Infrastructure Develop- spread of basic infrastructural facilities. directly or through special-purpose ment and Finance Company to pro- The state has a good transport and vehicles, joint ventures, assisted com- vide necessary professional advisory communication network. It has a total panies, etc. services. length of 536 km of national highways The spate of concessions available Power: electricity reforms on their and 1138 km of state highways run- for industrial ventures in Uttarakhand way. The state Cabinet has decided ning through it. The length of metalled along with the proactive government to bifurcate its power utility to carry roads per 100,000 of population is high- and facilitative environment has led to out electricity reforms in the state. er than the all-India aggregate, though more than a thousand Expressions of Uttarakhand Power Corporation Ltd due to the nature of the terrain the length of metalled roads per thousand sq. km. of area is relatively lower. IT Infrastructure Initiatives Industrial estates and parks being • State Infrastructure & Industrial Development Corporation of Uttarakhand (SIDCUL) is developed include: setting up a state-of-the-art Software Technology Park at Dehradun—the state capital The Integrated Industrial Estate, with intelligent buildings and hi-tech habitat centre. Haridwar. Located just 3 km from • SPTI Earth Station at Dehradun with connectivity up to 100Mbps fibre-optic networks Delhi-Haridwar National Highway, by Reliance Infocom, Department of Telecommunication, etc. 225 km from national capital Delhi • MOUs signed with Cisco Systems, Intel Corporation, IBM, etc. for setting up of and 52 km from state capital Dehra- research academies dun, it will have electronics as one of

www.efymag.com electronics for you • march 2008 • 125 EFY REPORT

the proposed industries. It will have commercial areas. Specialised Theme world-class infrastructure and facilities Parks are also contemplated within like hotel, bank, school, hospital, petrol these estates so as to garner all benefits pump and golf course. of a cluster-based development. Integrated Industrial Estate, Si- SIDCUL plays a stellar role in in- targanj. Eldeco Infrastructure & Prop- dustrial development by providing ad- erties Ltd (EIPL), in association with equate and timely finance, developing SIDCUL, is developing a futuristic the required infrastructure, ensuring industrial park in Sitarganj in Udham development, technology upgradation Singh Nagar district. The site is located and setting up of high-technology pol- at a distance of about 300 km from lution-free industries. It ensures speedy Delhi and the nearest large town is Mo- clearances to enable the shortest lead- radabad (UP), which is at a distance of time in setting up industrial projects. about 80 km. Units are currently being SIDCUL would be administering all set up in IIE, Sitargunj. promotional schemes of the govern- Its key advantages include: ment for industries and administer the 1. Area sprawling over around 5 single-window system. sq.km (1200 acres) with land availabil- ity to spread more. Infrastructure: new 2. As per current availability of initiatives industrial land, it is few of the largest For a nascent state like Uttarakhand, tracts of land available in NCR (Na- it is important to assess the new initia- tional Capital Region) and surrounding tives taken by the government to aug- region. ment infrastructure facilities rather 3. Its regional connectivity (50- than focus entirely on the existing 100 km) to major towns and cities: infrastructure. Rudrapur, , Mordabad, Power: increased private sector Rampur, Kashipur and across states presence to tap the efficiencies. The (300-500 km) to Uttar Pradesh, Delhi, potential for power generation is enor- Haryana and Himachal Pradesh. mous with a potential of 22,000 MW of 4. The nearest airport is at Pant hydropower capacity. National Ther- Nagar (50 km), which the government mal Power Corporation (NTPC) signed intends to upgrade an agreement with the Uttraranchal 5. Water is available in abundance, government to develop two hydroelec- both ground and surface water. tric projects with an installed capacity 6. Cheapest and uninterrupted of 1120 MW—the 600MW Loharinag- power supply. Pala in the Uttarkashi district and the 7. Skilled and semi-skilled man- 520MW Tapovan Vishnugad in the power is easily available. Chamoli district, which would generate Development is in full swing. Fi- 3525 million units of power a year on nancial incentives offered at IIEs are: completion. The state would get 12 per 1. 100 per cent central excise ex- cent of electricity produced from the emption for ten years projects free. A detailed project report 2. 100 per cent income tax exemp- is also being prepared by the NTPC on tion for first five years and 30 per cent the Lata Tapovan hydel project with a for next five years capacity of 108 MW. 3. CST at 1 per cent for five years IT: Enhancing the presence of IT 4. Capital investment subsidy at and ITES services in the state. The state 15 per cent with a maximum of Rs 3 is coming up with a dedicated IT park million in Dehradun. The site offers adequate The facilities in IIEs of SIDCUL infrastructure support and is expected in general include dedicated 220kV to host a large number of ITES and substation with a string of feeder sub- software companies that will further stations, common effluent treatment give a boost to the demand drivers of plants, 60m roads, all modes of connec- the state economy.  tivity, logistic centres, zonal distribu- tion of industries, and residential and The author is an assistant editor at EFY

126 • march 2008 • electronics for you www.efymag.com