Noida: a tale of shut factories

April 19th, 2009 - 1:39 pm ICT by IANS  

By Pupul Dutta
Noida, April 19 (IANS) Once advertised as the business hub of Uttar Pradesh and a source of a major chunk of the state’s revenues, this suburban town of Delhi that had witnessed a real estate boom has been reduced to an industrial wasteland of shut factories - as many as 67 percent of them.

Spread across 203 square km and housing some 9,000 industrial units, has only 2,700 of them functioning. Almost 6,300 units have shut shop owing to poor infrastructure and lack of tax benefits, their owners complain.

“These are some of the basic issues that need to be addressed and we may get back some of the industries that have moved out of here,” said Rakesh Katyal, president, Noida Entrepreneurs Association (NEA).

“The tax structure prevalent in the state is a major turnoff for most industries. While other states are offering tax holidays, Noida extracts the most,” Katyal told IANS.

The sales tax is higher than in any other state. On petrol, for example, it is around 20-22 percent, prompting a lot of vehicle owners to get their tanks filled in Delhi, where the tax is 12.5 percent.

Among companies that have moved out of Noida owing to higher taxes and raw material cost are biscuits manufacturers and fast moving consumer goods majors like Lancer Foods and Priyagold, sweets maker Haldiram and a number of paper and cardboard industries.

“We recently closed all our operations in Noida and moved to Pantnagar (in Uttarakhand) as the state offered us a tax holiday for 10 years and a lower excise duty,” said Dinesh Shukla, owner of Lancer Foods.

“Moreover, the cost of electricity and raw materials are lower than Noida.”

Long and frequent power cuts is another factor that has forced many industrialists out of Noida and added to that is the law and order problem.

It was here that the chief executive of a multinational firm, Italian auto parts company Graziano, was lynched.

“There are inadequate street lights on the roads. This helps criminal activities in such areas,” Aditya Ghildyal, general secretary of the Association of Greater Noida Industries, told IANS.

Last October, the authorities gave weapons licences to all industrialists and top company officials who wanted them, owing to increasing crime incidents and mafia threats. Some executives said that was not enough.

“Obviously, neighbouring states have been quick in capitalising on the opportunities, providing a more conducive environment and better benefits,” said Ghildyal.

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