India Inc lines up Rs 5,000 cr for Pantnagar

Pantnagar, a small town in Uttaranchal best known for its agricultural university, appears poised to metamorphose into an industrial hub with no less than Rs 5,000 crore (Rs 50 billion) worth of investments in the pipeline.

Last heard, 3,349 acres of land were available to companies in and around Pantnagar.

Bajaj is spending Rs 500 crore (Rs 5 billion) on setting up a two-wheeler plant. For company, it has Tata Motors (Rs 2,000 crore worth of investment), ITC (Rs 125 crore), Mahindra & Mahindra (Rs 120 crore), Hindustan Lever (Rs 102 crore), Nestle (Rs 100 crore), Britannia (Rs 57 crore), Dabur (Rs 49 crore) and Escorts (Rs 50 crore).

Parle, Voltas, Bombay Burma, Greenply and ACME Telecom too have made plans to invest in Pantnagar.

The beeline includes hundreds of other companies, small and medium, taking the total investment flowing into Pantnagar – at least on paper – to Rs 5,000 crore.

"How much of it finally materialises is something we will have to wait and see," said Alok Kumar, managing director of the State Industrial Development Corporation of Uttaranchal, the body that facilitates fresh investments in the state.

But the initial reports should encourage Kumar. For instance, Dabur has made Pantnagar its biggest production facility in the country, contributing almost Rs 500 crore to the company's annual turnover.

Pantnagar is using an old formula to attract investment, one that combines tax incentives, rapidly developing infrastructure and surplus energy.

Investments completed before the end of the current financial year will be fully exempt from central excise for 10 years and from income tax for five.

The central sales tax will be only 1 per cent for five years. And there will be a capital investment subsidy at 15 per cent with a cap of Rs 30 lakh.

Yet, Pantnagar has managed to stand apart among the pockets of manufacturing emerging in the hills of North India, all using the same formula of exemptions and incentives.

Baddi in Himachal Pradesh, which went on a drive to draw investments four years ago, has managed to draw much smaller operations, mainly those by drug companies looking to save on excise. "It is not just about tax incentives.

This is probably one of the few states that has developed industrial infrastructure ahead of investments being committed by companies," said Kumar.

Uttaranchal, which has surplus power and good roads, is developing three large industrial clusters within the state – Pantnagar, Haridwar and Sitarganj.