'Ease of doing business, not sops attracts investors'

Prime Minister Narendra Modi (Photo by Reuters)

Prime Minister Narendra Modi on Thursday spoke against sops like free power, cheap land and tax waivers for industrialists, saying they would rather have a transparent business environment with simpler rules.

Inaugurating a two-day event here to attract investment to Himachal Pradesh, Modi pitched for competition among the states on ease of doing business instead of offering “charity” through such incentives.

He said all states and districts in the country have a role in India’s effort to become a five trillion dollar economy by 2025.

“The Industry likes transparency and a clean system. Unwanted rules and undue interference by the government somehow create hindrance in the pace of industrial growth,” he said at the Rising Himachal Global Investors' Meet.

Officials claimed that during the events leading up to the summit, businesses have committed investments totalling over Rs 92,000 crore - in the form of MoUs - to Himachal Pradesh, exceeding the targeted Rs 85,000 crore.

Modi said the states earlier used to perform “charity” and provide many incentives to attract investment. “One state would waive tax, another would provide free power.

He said the investors too delayed their decisions, hoping for better incentives from other states.

“But I am satisfied that this situation has changed drastically in the last few years. Now state governments have started realising that the competition on incentives can neither benefit the states nor the industrialists,” he said in his 30-minute speech.

“For attracting investment, the proper ecosystem, dismantling of the inspector raj and doing away with the permit system is required,” he said.

“Nowadays, the state governments are coming forward to compete in creating this type of ecosystem. They are simplifying the system, amending laws. Unnecessary laws are being done away with,” he said.

On the country’s goal to become a five trillion dollar economy, he said, “Every state and every district of the country has a great potential and they will play a vital role in achieving the target.”

Himachal Pradesh Governor Bandaru Dattatreya, Chief Minister Jai Ram Thakur, Sikkim Chief Minister Prem Singh Tamang, Union ministers Prahlad Patel and Anurag Thakur and Niti Aayog Vice Chairman Rajiv Kumar attended the event.

The prime minister also stressed on the tourism sector. “Himachal also has a huge potential for investment in the fields of tourism, pharmaceutical and other sectors,” he said.

He praised Himachal Pradesh initiatives like the creation of a single window clearance system, transparency in land allotment and sector-specific industry policies.

Jai Ram Thakur said the Vibrant Gujarat event organised by Modi when he was the chief minister of that state showed the way to attract investment to Himachal Pradesh.

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