S Gopal Puri
Shimla:
As Himachal Pradesh reels from one of the worst monsoon disasters in recent memory, the state’s declaration as a “disaster-affected area” under the Disaster Management Act is raising concerns in industrial circles.
While the move allows for faster relief and rehabilitation, many fear it may also send a negative signal to investors and further strain an already battered industrial ecosystem.
Fresh investments likely to slow down
Industrialists and stakeholders fear that the “disaster-hit” label, though administratively necessary, may discourage fresh investment into the state. Himachal has long positioned itself as an emerging hub for pharmaceuticals, small-scale manufacturing and eco-tourism. However, the frequent cloudbursts, landslides and infrastructure breakdowns this monsoon have painted a grim picture of operational feasibility.
“We understand the state had no option but to declare itself as a disaster zone. But the perception it creates can hurt investor sentiment,” said a Baddi-based pharma unit owner, who requested anonymity. “New investors may now view Himachal as high-risk, both in terms of logistics and operational continuity.”
Several companies that were exploring expansion in the Parwanoo-Baddi-Nalagarh belt are now reportedly taking a wait-and-watch approach until the situation stabilises.
Existing industry already reeling
For existing industries, the situation is equally dire. Road closures, power outages, water disruptions and landslides have choked supply chains and paralysed operations in several industrial pockets. Factories in Solan, Sirmaur and Kangra districts have reported setbacks due to logistical hurdles or safety concerns for workers.
An industrialist from Solan, speaking on the condition of anonymity, said: “The biggest challenge now is not just the threat of physical damage to our facilities but the complete breakdown of the supply chain. Our clients outside the state are getting anxious and we fear losing orders to competitors from more stable regions.”
Many small and medium enterprises (SMEs), which form the backbone of Himachal’s industrial landscape, are also facing difficulties accessing working capital. Banks, wary of further risks, are reportedly tightening disbursal norms for loans or credit extensions.
Uncertainty looms over recovery plans
While the state has activated the Disaster Management Act to ensure relief and safety, questions remain about the roadmap for industrial recovery. Without a formal declaration of national-level disaster by the Centre, the scale of central aid remains uncertain. This, in turn, makes it difficult for businesses to estimate how quickly infrastructure, especially roads and power supply, will be restored.
“The government is doing what it can, but businesses need predictability,” said a senior executive of a manufacturing unit in Una. “If the Centre doesn’t step in with a reconstruction package soon, many of us might have to rethink our operations here.”
