1

INDUSTRIAL VISIT TO HIMACHAL PRADESH-REPORT Akhil Saxena , CM Fellow Bhind District, Madhya Pradesh Industrial Growth Stimulus and State Investment Policy (along with the commercial sector) was chosen as the Individual district specific project. Accordingly , an industrial tour to the Baddi Industrial Area , District Solan (Baddi-Barotiwala-Nalagarh belt) , Himachal Pradesh was organized to study the model of industrial development adopted by the Government of Himachal Pradesh for the region that generates an annual turnover of INR 30,000 crore and generates 95% of the revenue from industries for the State Government. Baddi industrial area was chosen due to its similar characteristics as the Malanpur industrial area in Bhind viz. lack of proper connectivity and infrastructure, inefficient delivery of public services by the Government , semi-arid land terrain as against the ravines-based geographical terrain in District Bhind and yet , Baddi had emerged as a model industrial area known world over in the present time . Meetings were held with the following: Joint Director , Industries Department HP Government ; Shri RK Kaushik , State Vice-President of Industries Association of Himachal Pradesh ; Shri Sanjay Batra , President BBN Laghu Udyog Bharti ; Shri Rajeev Kansal , Gen Secretary HP Industries Association amongst others .

2

ABOUT SOLAN DISTRICT: The Solan district is the most developed district of the Himachal Pradesh from the the point of view of setting up of MSMEs. A total number of 5677 Micro, Small & Medium Enterprises have been set up in the district. Most of these enterprises have been set up in the bordered area like Baddi, Brotiwala, Nalagarh & Parwanoo of the district. Solan has the largest share of approved industries post 2003 after the concession were announced by the Central Government. The major groups which saw boom after implementation of special package of incentives to the state which has been partially withdrawn now are the pharmaceutical group and corrugated box enterprises. As far as employment is concerned , Baddi employs one-third of all persons engaged in medium and large industries of Himachal pradesh. The Baddi-Barotiwala-Nalagarh (BBN) industrial belt is ranked at 14 globally in terms of value of bulk drugs being manufactured here. It stands third in terms of volume. Baddi is Asia’s biggest Pharmaceuticals hub.

3

MAJOR DEVELOPMENTAL SCHEMES BEING IMPLEMENTED BY DIC (in HP)

1. Prime Minister’s Employment Generation Programme (PMEGP): This scheme is being implemented by DIC , KVIB and KVIC under which loans are provided through Banks upto Rs.25 Lacs for manufacturing industrial Projects and upto Rs.10 Lacs for Service Projects with subsidy ranging from 15% and 25% for Urban area and 25% to 35% for Rural area depending upon the category of applicant. During the financial year 2014-15 , Margin Money Subsidy of Rs. 149.57 lacs disbursed to 70 beneficiaries under PMEGP scheme creating employment to 351 people.

2. Rural Artesian Programme (RAP): 612 rural women are being given 9 months

skill training in the trades of Cutting- Tailoring, Computer etc. under RAP scheme.

3. Rural Engineering Based Training Programme(REBTP): 12 SC, BPL, rural

candidates are being given 9 months skill training in the trades of Electrician, Motor Mechanic, Carpenter, Computer Tally etc. under REBTP Scheme.

DEVELOPMENT PLAN 2025 (IN HP): Development plan 2025 is a blue print and future layout of BBN area. It controls the development activities and makes balance approach between environment and built form. Following are the reason which has led to the thinking of having a Development Plan for the BBN (Baddi-Barotiwala-Nalgarh) Special area.

• To control the development of various urban uses in the systematic way; • To discourage the growth of town in an unplanned and unscientific way; • To give a perspective picture of a fully developed town; • To limit to a certain extent the unprecedented flow of rural population to the

urban area.

GENERAL ISSUES RAISED BY INDUSTRIAL ASSOCIATION :

§ Insufficient supply of skilled labour / unskilled labour. § Industrial area should have proper water & sewerage facilities, better roads and

proper street lights etc. § The branch level officers of banks and other financial institutions should have

proper awareness about the schemes being implemented by central and state government for the benefit of MSE sector.

4

ABOUT BHIND DISTRICT: Bhind was one among the 16 districts of United State of Madhya Bharat which was constituted on 28th May 1948. Subsequently, as a result of reorganization of States in November 1956, district became part of new Madhya Pradesh. It is well known fact that the region has been subjected to depredations of dacoits, robbers or thugs since ages. Even during Mughal times the powerful administration failed to curb these menace. As many as 216 dacoits were shot dead and 697 arrested in Bhind district alone from 1959 to 1963. The soil of Bhind is very fertile and is well drained by the Chambal and Sind rivers and the tributary streams of the Kunwari and Puhuj. MALANPUR INDUSTRIAL AREA: Industrial Area Malanpur is in Bhind district in the state of Madhya Pradesh. It is multi-product and part of which is food processing industrial area with 1389.34 hectares of land, near to city of Gwalior. The Industrial Area is situated on NH-92, Connecting Gwalior-Etawah-Kanpur and 03 kms away from North South Corridor. Malanpur has dry port Inland Container Depot. Excellent infrastructure has been upgraded at the cost of 40 crores recently providing world class infrastructure in Malanpur.

Fig.- Snapshot taken from Google Map

5

Developed/Devoloping/Undeveloped government land in industrial areas of Madhya Pradesh can be viewed through GIS. The online system helps for booking/allotment of vacant plots on http:/www.invest.mp.gov.in. This land bank book as well as the GIS based online system of land identification and allotment will prove to be useful for the investors.

6

Trade and Investment Facilitation (TRIFAC): Madhya Pradesh Trade and Investment facilitation Corporation Limited (TRIFAC) formerly known as Madhya Pradesh Export Corporation Limited, is a Company established under Companies Act 1956 and wholly owned by Government of Madhya Pradesh. (Certificate of Incorporation) Since 2004, TRIFAC is functioning as Single Window Facilitation Centre For Investment promotion in Madhya Pradesh.

MUSTARD BEING DROUGHT RESISTANT VARIETY AND GROWN IN BHIND: Mustard is the major source of income especially even to the marginal and small farmers in rainfed area Since these crops are cultivated mainly in the rainfed and resource scare regions of the country, their contribution to livelihood security of the small and marginal farmers in these region is also very important. Due to its low water requirement (80-240mm), mustard crops fit well in the rainfed cropping system. Madhya Pradesh is the fourth major mustard producing state in India followed by Gujarat and West Bengal, with a share of nearly 11% to the country’s total mustard production. Among various oilseed cultivation in MP, mustard is the second major oilseed crop, after soyabean. Mustard covers nearly 5.5% of net sown area in the state.

7

In the state, Chambal area (Bhind and Morena) produce more than half of the production share of mustard in MP (53%) , Sheopur Kala (11%), Gwalior(7%) , Mandsaur(6%) and other remaining districts(23%).

OILSEED AND CLUSTER BASED INDUSRTY APPROACH : Oilseeds plays the second important role in the Indian agricultural economy, next only to food grains in terms of area and production. In India, major mustard producing state are Madhya Pradesh, Rajasthan, Uttar Pradesh, Haryana, Gujarat, West Bengal and Assam. Mustard oil consumption is increasing at a rate of 20 per cent every year. Demand for mustard for mustard oil comes from rural areas and consistent owing to its multi uses. Mustard oil refinery can definitely provide a boost for our industrial area(Malanpur).Solid waste from mustard oil refinery which is generally called ‘Peena’ in our local language is also useful for the Animals feed. As we know Chambal area produce more than half of the production share of mustard in MP(53%). Oil based cluster can definitely give a new life to our industrial area. Till date more than 30 cluster development schemes/programmes like MSE-CDP, SFURTI, etc. have been introduced by various institutions including ministries of the Central government, different State Governments, financial institutions, technical institutions, apex business member organizations and international agencies. However the issues/problems of the sector have largely remain the same and are primarily because of poor execution. Hence it is recommended in the study not to create any other new policy/schemes/programme, etc. but to develop strong mechanism for efficient and effective implementation of the existing schemes for the benefit of the sector. The problems and challenges by MSMEs are multi-faceted encompassing social, economic and environmental areas, and therefore there is a need for integrated support that can be ensured with convergence of development schemes of assistance and

8

coordination of relevant stakeholders. There is a need to optimize efforts through inter-sectoral approaches and synergies between different government schemes in terms of ensuring their reach and benefits to the target industry stakeholders. It is recommended to create an umbrella body, named as Cluster Program Support Agency (CPSA) to execute, coordinate &manage the MSME development initiatives including clusters approach in MP.

Following are the problems which makes difficult Ease of doing business.

9

Some of the key services to be provided or integrated with cluster initiatives are as follows:

• Capacity Building initiatives for stakeholders like Financial & Technical institution, Developmental organisation – NGOs, BMOs and so on.

• Skill development programs • Vendor Development programs (VDP) • Business Development Services strengthening (BDS) • Industrial Linkage Programs (ILP)

SKILL DEVELOPMENT PROGRAMME: For development and sustenance of MSME clusters, special focus on Skill development programmes is very important. For example, Handloom & handicraft cluster, Leather Cluster, jewellery cluster etc which are basically traditional in nature may be the target cluster. This may be done by undertaking few Skill development program based on the requirement of the clusters. This will help the state to sustain and enhance the MSMEs growth prospect through disseminating the skill& information to its members. Methods for skill development: Promotion of in house training programmes, Exposure visit, earning through the evaluation of activities, dissemination of public awareness materials, community meetings, sharing information on websites, and sharing experiences with other communities that have successfully initiated or implemented innovative programmes. VENDOR DEVELOPMENT PROGRAMME: Local small and medium-sized enterprises are vital part of Madhya Pradesh economy, however, they often lack the resources to grow their business, expand by meeting national & international standards. MSMEs also often struggle to penetrate into existing markets, or create new ones, especially when competing against established businesses. To address this issue, Vendor Development Program (VDP) is recommended in few clusters of the State. BUSINESS DEVELOPMENT SERVICES: A major finding which came out of the study is that MSMEs in Madhya Pradesh are underperformed and non-competitive because of lack of awareness about market access and their limited capacity to respond to the growing demand. MSMEs Cluster in Madhya Pradesh have a range of different “needs” that are critical to their survival and growth. SMEs need more types of intervention to support and sustain in the competitive world for example, awareness and access of target market, designing of products, enhance productivity, quality of product, Raw material procurement, awareness on standardisation, communicate effectively, and access new technology. The nature & degree of support and services will be influenced by sector of cluster and stage of Cluster development.

10

POTENTIAL SECTOR FOR NEW MSMEs:

• Mustard oil refinery • Dehydration of vegetables • Dairy & Milk products • Cattle feed plant • Stone grits • Roller flour mill • Bakery • Processed species • Carpet Weaving • Mill board

CONCLUSION AND EMPHASIS POINTS :

• Emphasis on MSMEs. • Emphasis on Skill development programmes like Rural Artesian Programme

(RAP), Rural Engineering Based Training Programme (REBTP) which also helps to encourage Women Empowerment in Rural areas and limit the unprecedented flow of rural population to the urban area.

• Control the development of various urban uses in malanpur industrial area. • Preparation of Development Plan for the region by considering the basis

infrastructure like roads, water, housing , municipal wastewater and solid waste management.

• Existing situation analysis of road network, water supply system, drainage pattern and social infrastructure requirements.

• Cluster-based industrial development , specially for oil sector based raw material. An invitation was also served to the industrialists of Himachal Pradesh to come and invest in Madhya Pradesh as per the Hon`ble Chief Minister’s vision of Red Carpet moving forward from the times of Red Tapism . The report may serve as a policy input for Sushasan Bhawan(Centre of Governance) and the State Government departments viz. Dept of Commerce , Industries and Employment ; Dept of Micro Small and Medium Enterprises for better growth and industrial development of an area having massive but untapped potential .