Punjab Industry’s Resilience in Managing the Pandemic

Punjab has attracted investments worth more than Rs. 80,000 Cr, in the last four years. This has been possible due to the concerted efforts of the Government of Punjab to make the state a preferred investment destination in India. Focusing on MSMEs, large-scale industries, as well as foreign investments, the state has been able to win new investors while maintaining the trust and confidence of existing investors.

In the last financial year 2020-21, through the proactive support of the State Government, industry in Punjab has been able to effectively manage the Covid-19 crisis. With the State Government supporting industry in arranging raw materials, facilitating testing, obtaining approvals as well as orders, Punjab’s industry was able to support the country with production of PPE kits, masks and ventilators from ground-up. Even during the current year, industry has stepped up to support the government in managing the pandemic by manufacturing Medical Oxygen to ensure uninterrupted supply of oxygen to healthcare facilities.

Industry’s resilience is evident in not only how quickly the industry responded to Covid-19 challenges and resumed operations post the lockdown, but also in how the industrial investments have recovered in the state. Investment proposals worth more that Rs. 14,000 Cr. have been received in FY 2020-21 with 25% of the investments for expansion or modernisation of existing units while 75% for new units.

MSMEs form a strong base of the industrial ecosystem of Punjab. They have also been facilitated by the State Government through business-friendly policies like the Right to Business Act 2020. MSMEs are leading the revival of the economy post the pandemic with more than two-thirds of the investments in FY 2020-21 coming from MSMEs. The leading sectors in this recovery by MSME’s have been Agri & Food Processing, Steel and Alloy Steel, Textiles, IT/ ITeS and Other Manufacturing. Districts such as Ludhiana, S.A.S Nagar and Fatehgarh Sahib with their supportive ecosystem, have emerged as the champion districts for these MSMEs to set up or expand their operations.

Looking at overall investment trends during the last financial year, it can be observed that though onset of Covid-19 in Q1 FY 2020-21, did adversely impact the investment inflow with investments dropping to avg. Rs. 1700 Cr./ quarter in Q1 and Q2 FY 2020-21 compared to avg. Rs 5000 Cr./quarter in FY 2019-20. But Q3 FY 2020-21 onwards, has seen recovery in investor confidence, as can be witnessed from sharp rise in investments through Q3 (Rs. 2147 Cr.) and Q4 (Rs. 8490 Cr.). Even the exports from Punjab in FY 2020-21 show V-shaped recovery, where though the monthly export value dipped in April-June 2020, it almost recovered to pre-pandemic level by December 2020.

Sectors which are driving this recovery trend are Agri & Food Processing, Steel and Alloy Steel, Textiles and Apparels, Pharmaceutical, Other Manufacturing and IT/ ITeS, besides Real Estate and Infrastructure. Some of these sectors have seen increased investments in FY 2020-21 as compared to FY 2019-20, like Steel and Alloy Steel (300% growth over FY 19-20), Pharmaceuticals (400% growth over FY 19-20) and Textiles (7% growth over FY 19-20). Some of the marquee projects in the year, across these sectors include Madhav KRG HRC Pvt. Ltd. (Rs. 526 Cr.), Modern Steels Ltd. (Rs. 132 Cr.) in Steel and Alloy Steel, Viva API Labs Pvt. Ltd. (Rs. 136 Cr.), Centrient Pharmaceuticals India (Rs. 135 Cr.) in Pharmaceuticals, Sharmanji Yarns Pvt. Ltd. (Rs. 295 Cr.), AB Cotspin India Ltd. (Rs. 119 Cr.) in Textiles, JSW Steel Coated Products (Rs. 192 Cr.) in Manufacturing, Om Sons Marketing Pvt. Ltd. (Rs. 556 Cr.) in Agri and Food Processing, Smarter E-learning Pvt. Ltd. (Rs. 152 Cr.) in IT/ ITeS.

Districts which attracted majority of the investments in Punjab in FY 2020-21 are Ludhiana (in Textiles and Technical Textiles), S.A.S. Nagar (in IT and Pharmaceutical besides Real Estate), Bathinda (in Agri & Food Processing), Patiala and Fatehgarh Sahib (in Steel and Alloy Steel). These districts have attracted more than 80% of the investments in the year.

Even in the current crisis, responding to the State’s call for support in battling the second wave of Covid-19, industry has come forward by increasing Oxygen Production capacity in their units and many companies like Mahindra & Mahindra Swaraj, Vardhman Steels Ltd, Hartek Group, Avon Cycles Ltd., Happy Forgings Ltd. are contributing Oxygen Concentrators, Oxygen Cylinders, Hospital Beds, Oximeters, N95 masks to help the people.

State is immensely proud of its industry for the way it has endured yet thrived during this pandemic and stands committed to support the industry in its endeavours to grow, with progressive policies, world-class infrastructure and ease of doing business.

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