The Gross State Domestic Product (GSDP) of Punjab, Haryana and Himachal Pradesh will grow after the Goods and Services Tax (GST) is implemented, said Gopal Jiwarajka, President, PHD Chamber here. “The northern states – Punjab, Haryana and Himachal Pradesh will see a major escalation in their GSDP growth rates with the implementation of the GST as the inter-state purchases will see a significant decline of 5-6 per cent in the prices of their raw materials and finished goods,” Jiwarajka said in a press statement here today.
The implementation of GST will remove cascading impact of taxes and levies on their inter-state purchases and will enhance their respective GSDPs by 2-3 percentage points.
The 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.
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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 Jiwarajka.
The share of Haryana in country’s GSDP (combined GSDP of all the states in India) stands at 3.5 per cent, followed by Punjab at 2.9 per cent and Himachal Pradesh at 0.8 per cent.
The share of industry (secondary sector) in state’s GSDP of Himachal Pradesh stands at about 41 per cent, followed by Haryana at 29 per cent, and Punjab at about 21 per cent.
Today, these northern states offer favourable environment for attracting industrial investments through investor friendly policies and better infrastructural support, he said.
These states are now on their way to rapid industrialisation 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.