Himachal Pradesh chief minister Prem Kumar Dhumal on Monday said commerce and industry minister Anand Sharma has recommended extending special industrial package to the state up to 2013.
Dhumal met Sharma on Monday to lobby for the extension of tax benefits enjoyed by industrial units in the state, which was to expire on March 2010.
Himachal got the special status in 2003, under which industries in the state enjoyed income tax holiday, central excise exemption and transport subsidy for a period of 10 years.
Sharma has recommended extension of the tax sops for the industries based in the state to Prime Minister Manmohan Singh and the finance ministry, a release by the Himachal government said. Incidentally, Sharma is a Rajya Sabha member, representing Himachal Pradesh.
Industrial units in Himachal, Uttrakhand and Jammu and Kashmir do not have to pay income tax for the first five years and at the same time is exempt form paying excise duty for 10 years after a project is set up. Sharma and senior ministry officials are visiting Himachal from Tuesday to access the impact of the industrial development in the state.
Punjab and Haryana have been complaining about the area-based exemptions enjoyed by Himachal. As many industrial units from these states are shifted to the hill state, especially in the Baddi industrial area. Many pharmaceutical companies like Dabur, Ranbaxy have set up manufacturing units in Himachal Pradesh.
But as the date of expiry of the tax incentives draws closer, many industrial houses are contemplating to shift their operating units to north-eastern states, which also enjoy similar benefits.