The plans of Punjab government to build a four-lane road from Kurali to Baddi to help the units in the excise-free zone, have drawn flaks from different quarters, especially those units outside free-zones, terming it as another instance of 'populism'.

Secretary general of SME Pharma Industries Confederation (SPIC) Jagdeep Singh felt that there was no need for such a measure by incurring huge expenditure both on the road and the rail link (which dislocates the Chandigarh Infotech City) when the tax holiday was slated to run out within one year and five months in April 2010. In any case, Baddi is not a gateway to Himachal Pradesh to justify the expense, he said.

Punjab chief minister Manpreet Singh Badal made the announcement to construct the road recently at a conference in Chandigarh while some industry people expressed concern over the delay on building the proposed road to Baddi. However, Jagdeep Singh and a few others took exception to the proposal, describing it as yet another preferential treatment for those in the free-zones.

The tax holiday in excise free zones in Himachal and Uttarakhand were given as an election sop by then NDA Government in early 2003. This provided a 10 per cent advantage to pharma units who shifted to EFZ. Prime Minister A B Vajpayee belonging to BJP announced the tax holiday but his party lost elections in both the states. Populism failed to produce any dividends, Singh pointed out.

"Thereafter the UPA government magnified advantage of EFZ from 10 per cent to 40 per cent by levy of anomalous MRP based excise in January 2005. This resulted in mass migration of industry whereas the purpose of tax holiday was to have new units in EFZ. Anomalies also resulted in loss of revenue and prices skyrocketed in absence of any tax on MRP- absolutely contrary to the objectives of changed policy," he said.

Bengal finance minister and the chairman of the empowered committee of finance ministers Asim Dasgupta, chairing the event, also felt that it was bad populism and within one year and five months, levy of GST would effectively terminate the excise holiday which is the major advantage. Thereafter most units in EFZ would only be entitled to partial income tax exemption only, as most have enjoyed full income tax exemption for the first five years, he said.