Punjab on path of recovery: FM

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Chandigarh, Oct 3: Manpreet Singh Badal, finance minister, Punjab, has claimed that Punjab is on the path to recovery. This is evident from a 25% increase in its plan size during the last two years. Punjab's plan size was about Rs 4,000 crore in 2006, Rs 5,111 crore in 2007 and Rs 6,200 crore in 2008. Talking to FE, Badal said the government was targeting a growth of 25% per

annum. He, however, agreed that the ideal plan size of

a state like Punjab should

have been about Rs 15-kcrore.

Badal said in the first five months of 2008-09, the collections under VAT had shown almost a 40% growth, the highest in the country . The latest report of the Centre for Monitoring Indian Economy (CMIE) also says Punjab is emerging as a preferred destination for investment.

The CMIE report refutes that only some real estate projects had come to Punjab by saying that maximum investment had come in manufacturing, followed by services, electronics and construction. The report adds that FDI flow to Punjab is also significant as 49% of the share in FDI had come from LN Mittal Company in a single project of about Rs 2,000 crore in the power sector,besides other investment from NRIs.

The report states that the manufacturing, textiles, chemicals sector along with the paper industry had attracted maximum investment. In the services sector, IT and telecom accounted for a greater share while in infrastructure, road projects, construction and housing projects took the lion's share followed by shopping malls.

Badal's observations and the CMIE report are in complete variance with the joint study conducted by KAF and Ficci on 'State-level reforms: Increasing investment in Punjab,' suggesting that Punjab was no more a favoured destination for entrepreneurs.