Chandigarh- 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 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.