Area Based Exemption - Growth of employment is not at par with investment "

A comparison chart showing generation of employment against investment of Rs. 1 crore where the investors enjoy exemption form taxes as per the policy of the Central Government:

State	Period	Investment (Rs. in Crores)	Employment	No. of Employment generated for Rs. 1 crore
Jammu & Kashmir	14.6.2002 to 31.3.2007	3403.47	72,209	21.22
Himachal Pradesh	7.1.2003 to 31.3.2007	2053.24	37,893	18.46
Uttrakhand	7.1.2003 to 30.6.2006	19035.88	1,40,972	7.41

(Source: - Reply submitted by Minister of State in the Ministry of Finance, Shri S.S. Palanimanickam in the RAJYA SABHA on 21-8-2007 to a question raised by Shri Naresh Gujaral)

The scheme of exemption from taxes is working fine in the state of J&K and HP. But the same scheme failed to generate more employment in the state of Uttrakhand.

We hope that Government may take the following steps to ensure that the above data is correct and the scheme is not being misused:

-  Verify the number of employees registered with the department of PF / ESI before announcement of these schemes and thereafter.

-  Verify the number of dummy units working into these areas.

-  Find the reason of less yield in terms of generation of employment in the state of Uttrakhand

Area Based Exemption shows uneven employment outcomes; recommends verification of registrations and probe of dummy units. Area Based Exemption incentives produced higher employment yields in Jammu & Kashmir and Himachal Pradesh but not in Uttrakhand; the note recommends verifying employee numbers through Provident Fund and Employee State Insurance registrations, investigating dummy units in incentivised areas, and determining reasons for Uttrakhand's lower employment generation to prevent misuse and correct data inaccuracies.