Given the sluggish industrial growth and poor economic condition of Jharkhand, the central government has asked the state government to evolve an appropriate and comprehensive policy framework to attract private players and guarantee attractive returns on their investments. The state government also drew flak from the Centre for its tendency to depend more on subsidies.
?The planning (of the state) is not only still tilted towards providing subsidy/ concessions, but also depicts an increasing trend. No subsidy-based projects should be encouraged, as they are unsustainable in the long run and fails to yield the desirable impact. However, ?Jharkhand is still heavily dependent on subsidy based regime to attract industrial investment,? the Centre said, in paper prepared prior to finalising the state?s Annual Plan for fiscal 2008-09.
To pep up the state?s industry, there has been a sizeable hike in incentives and concessions with an outlay of about Rs 28 crore in the Annual Plan for the state for the next fiscal. This is an increase of Rs 8 crore over this fiscal?s outlay.
Meanwhile, the Centre also asked the state to expedite work on a policy to revive sick industries which is long overdue and devise strategies to address the problem of lack of entrepreneurship and training among the rural and tribal people.
Jharkhand, rich in mineral resources, with 40% of the country?s total resources, has great potential for rapid industrial development. However, large-scale industrial development is yet to take place, with the growth rate of state gross domestic product hovering around 5.5% during 2005-06.
One way Jharkhand can grow is by adopting the public-private partnership (PPP) route to implement industrial development schemes under the Industrial Area Development Authority, for which Rs 28 crore has been allocated in 2006-07 and another Rs 31 crore was sanctioned for 2008-09, the paper said.
The state has also fared badly on the power front. The transmission & distribution losses are as high as 43.05%. However, Jharkhand has assured to bring these down to to 39.87% in 2008-09.
