NEW DELHI (TIP): The Cabinet Committee on Economic Affairs (CCEA) extended the special industrial package for Himachal Pradesh and Uttarakhand till 2017, a move that will boost industrialisation and create more employment in the two hilly states. Both the states have seen phenomenal growth in investment and industrial growth in the last 10 years due to the package.

However, the neighbouring states like Punjab have been opposing the extension of the package on the plea that it is driving industry out of the state towards the hilly states because of special incentives. Welcoming the decision to extend the package, Commerce and Industry Minister Anand Sharma said this would generate gainful employment, especially for the rural youth. “It will also give a fillip to manufacturing and the small and medium enterprises in these two states”, he said.

A special package for industrial development in both the states was extended by the government in 2003 as these states were lagging in industrial growth. In 2007, it was curtailed, before being restored till 2010. The capital investment subsidy was one of the major components of a special industrial package offered to the states by the union government. The objective of the policy announced in 2003 was to provide the required incentives as well as enabling environment for industrial development, improve availability of capital and increase market access to provide fillip to private investment.