Punjab takes help of e-commerce giants to strengthen SMEs

The state signs MoUs with Amazon and Flipkart to transform small enterprises into industrial giants, reports Bharat Hiteshi

While governments in Punjab have made tall claims of attracting big-ticket projects and huge investments from across the country, the actual growth rate in the industrial sector in the state has been still crawling. As the state has not been able to attract big investors, the government led by Capt Amarinder Singh has decided to adopt a practical approach of focusing on micro, small and medium enterprises as engines of growth.

Additional Chief Secretary Industry & Invest Punjab, Vini Mahajan has said the state government was committed to transforming the Micro, Small & Medium Enterprises into industrial giants in the coming years.

Her observations came at the Progressive Punjab Investors Summit, when she cited the various measures taken by the Captain Amarinder Singh led government to strengthen the MSME sector in the state. She referred to the subsidized power tariff for industry @Rs 5/unit, incentives on electricity duty and GST, Online Land Ownership, Online Inspection
system and easy access to finance.

To provide this ease to the MSMEs, the Government of Punjab has partnered with HDFC Bank to provide loans to around 700 MSME beneficiaries, amounting to 1,100cr. Under their MoU, the Bank is offering special pricing for business loans to all industries in the state. The infrastructure up gradation has been undertaken at the focal points at an investment of around 200 crores by the state government.

The recent approval for Right to Business Act for MSMEs, amendments to the Industrial Disputes Act, Factories Act, etc, and the decision to allow Panchayats to partner the state’s industrial development through creation of industrial parks on Shamlat land are steps in that direction.

Punjab Industries and Commerce Minister Sunder Sham Arora has signed MoUs with key e-commerce giants Amazon and Flipkart to enable access to new markets for the Punjab-based MSMEs. The Government had signed the MoU with Amazon to enable B2B linkages with key international markets, including US, Canada, and key markets in Europe, while, with Flipkart, the government had signed the MoU to facilitate access for MSMEs to new domestic markets, as well as Flipkart Samarth, to give impetus to the growth of handloom weavers and small enterprises in the State.

The MSMEs in Punjab has a strong presence in light engineering, knitwear, clothing, sports good, pharmacy, automobiles, hand tools, leather industry and other sectors. Dr Guruprasad Mohapatra, Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT), said that MSME sector is the backbone of the Punjab industry and accounts for nearly 60% of the total output and around 80% of the total employment in industry in the State.

Chief Minister Capt Amarinder Singh went a step farther and on providing industry with a safe and stable environment for growth and investment, he sent out a stern warning to Pakistan, as well as to anti-social elements within the state, against any attempt to destabilize Punjab. “Behave, or else be prepared for the consequences,” the Chief Minister warned the neighbouring country, as well as any gangsters or goondas trying to disturb the peaceful environment of the state. He observed that “Pakistan has its own problems, but I won’t let them make their problems my problem.”

Steps were also being taken to ensure women safety so that women could take up industrial jobs and do night shifts, woman could call the police for safe transportation back home not only at night but even if she felt threatened or unsafe in any way, any time of the day. 

The focus was on providing the right environment to investors and industry to promote Punjab as a preferred destination. Underlining the need to shift people from agriculture to industry, in view of the surplus production that was making agriculture non-viable for them, the Chief Minister said that by providing the right avenues for employment, industry could also help check the migration of Punjab’s youth to other countries.

The Chief Minister stressed on the need to provide continuity to industry to encourage them to invest and expand in Punjab. For this, it is essential not to indulge in political vendetta with the opposition and ensure that any party coming to power maintains the same policy approach to industry, he added. Stability was a key component of providing an enabling environment for industrial growth, he said, hoping that the next government that takes over in Punjab also adopts this philosophy.

On the issue of air pollution triggered by stubble burning, the Chief Minister reiterated his stand that the Centre would have to pitch in to find a permanent solution to the problem. He would again raise the issue with the Prime Minister during their next meeting, he said, adding that if it is made worthwhile for them, farmers would definitely shift from wheat and paddy to other crops, just like they had, back in the sixties, moved to paddy cultivation.

This, said Captain Amarinder, was also vital to put an end to the wastage and the economic burden resulting on the state from the surplus wheat and rice crop, which the FCI was not lifting in a timely manner. Punjab, like other states, was already reeling under financial problems due to non-payment of their GST share in time, he said, pointing out that his state had not received its GST share since August 2019, translating into dues of Rs 6000 crore. And given that the state had handed over all other revenue generation sources to the central government under the GST regime, this had left them in a critical situation.

Assuaging the concerns of investors on account of the drugs and cancer problems in the state, the Chief Minister said his government had initiated a major cleanup of the drugs racket, with thousands of smugglers/peddlers arrested and convicted. While the problem will not completely disappear, in view of the money involved in the business, it would be well under control and manageable, he promised.

On the concerns expressed about the large number of cancer cases in the state, Captain Amarinder said statistics showed that the figure was actually lower than in other states. Punjab’s cancer cases had hit the limelight due to the notorious Cancer Train, he said, adding that his government was providing cancer treatment to patients within the state to prevent them from going to Rajasthan or other places for the same.

Actually, in its bid to push investment in the state, the fund-starved Punjab government has taken measures, including the creation of land banks in rural areas to boost industrial development. For this, the state government said it would amend Punjab Village Common Land (Regulation) Rules, 1964. Proposed Amendments in the Factories Act, Industrial Disputes Act and Contract Labour Act will also be implemented to boost employment and industrial development.

Rural Punjab has a vast untapped potential for industrial development. All cabinet decisions aim to attract investment, boost employment opportunities besides paving the way for ease of doing business in the state. Punjab is a renowned hub for the MSME sector and the statehouses over two lakh registered MSMEs. Once a flourishing state, Punjab is not doing too well on the economic front with revenue generation down and a backlog of bills amounting to 5000 crore. The new thrust on bringing investment back to Punjab can change the fortunes of the state and its people.