Ministry of Industry has recently forwarded a new policy to the cabinet, mooting an industrial infrastructure development financial mechanism under which the government will provide 70 percent fund for roads construction, electricity lines, telecommunication, water supplies and other facilities, if the investors submitted a proposal to make 30 percent contribution from their side.
"The new proposal has been forwarded as per the new draft of the industrial policy, which promises state support for laying down trade and industries related infrastructure," said Pratap Kumar Pathak, secretary at the Ministry of Industry.
Sources told myrepublica.com that the proposed facility will mainly be extended to the industries categorized in the new industrial policy as priority sectors. Those include industries such as agriculture, timber-based industry, construction, hydropower, tourism, mining, cement, pulp and paper, sugar and traditional cottage industries, among others.
Through the new arrangement, the ministry aims to quantify the policy-proposed state support to the entrepreneurs, thereby laying down a permanent system that encourages industrial development in the areas where major infrastructures are lacking.“
"We believe this will help achieve balanced regional growth, which is one of the objectives of the new policy," said a source.
The ministry also hopes the new facility will encourage investors to tap mines and other unused industrial resources of the country. Infrastructure and connectivity problems are considered as major obstacles to industrial growth across different regions of the country.
Citing such lacking as the major impediment to employment creation, the Maoist-led government a year ago had for the first time announced the program of state support on industrial infrastructure development.
Under the program, Ministry of Industry had extended financial support to a couple of cement factories in Dang for developing roads up to the production sites.
"Our effort is to establish this practice as a permanent and reliable mechanism. With the new arrangement, we also expect the budget for the program to be increased," added Pathak.
However, the private sector expresses doubt over prompt implementation of this facility. Investors also tag the protracted formalities the government needs to follow for the procurement of commodities and services as their other concern in timely implementation of the program. They further express worries over ´possible inclusion of political agenda and local politics´, which could linger the actual construction works -- something which has happened in the past.
To do away with these, the private sector had proposed the government to pledge them the cash grant and they will undertake the necessary construction works themselves. But the Ministry has denied it because of the existing laws.
milan@myrepublica.com
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