Existing incentives for N-E industrial units should remain, says Mukul Sangma
From Our Special Correspondent
NEW DELHI: The Centre is in the process of revamping its over three-decade old transport subsidy scheme for compensating transportation cost to industrial units located in the North-East and Jammu & Kashmir, said Commerce and Industry Minister Anand Sharma.
While addressing a meeting on “revision of transport subsidy scheme Sharma on Tuesday said “We are now in the process of revamping the scheme and in doing so, we had undertaken a detailed study of the operation of the scheme over the last several years and the matter will be referred to the Cabinet, incorporating all your suggestions, for a final view”.
The scheme was introduced in early 70s to offset the high transportation cost because of poor infrastructure and geographical inaccessibility in these states.
Addressing the meeting, Meghalya Chief Minister Dr Mukul Sangma said the existing incentives for the industrial units of the Northeastern region should continue and the region should have greater access to the markets all over the country if regional disparity is to be removed.
Dr Sangma not only insisted on continuation of all the benefits including transport subsidy under the NEIIP but also extension of the same for more years for the overall benefit of the region without diluting any of the provisions.
“Way back in the seventies the then Prime Minister Indira Gandhi could visualise this asymmetrical scenario and offered various incentives to the region,” he said while addressing the meeting on “Revision of transport subsidy scheme”.
The Northeastern region should continue to receive special attention and enhanced allocation which was reflected in the Union Budget 2008-09″,” Dr Sangma said.
The promise made will not be fulfilled if the NEIIPP is diluted and the region will still be industrially backward, he said.
“There is a general perception that the scheme has been misused and subsidy has been obtained fraudulently but this is not correct,” Dr Sangma said.
Secondly, the transport subsidy scheme provided by the Government of India in 1971 designated Siliguri consciously as the single rail head for Northeastern states although Guwahati, Tinsukia, and Dimapur were also in existence to enable the products from the industries of the North-East to stand in competition against their counterparts in the mainland, Dr Sangma said.
Dr Sangma also did not agree on the proposed amendment on imposition of ceiling on transport subsidy by subjecting the subsidy on the value of particular raw material/finished product. “The logical parameters for grant of transport subsidy are ‘distance’ and ‘volume’ of goods transported,” he said.
Rather the transport subsidy scheme should also be extended to the medium scale industries, he said adding “This will create employment opportunities.
The Chief Minister opined that the proposed revision to link transport subsidy and employment is not practical.
On the negative list including that of coke, Dr Sangma said this is acceptable as these units are using non-renewal resources and are highly polluting. However, the existing coke units, which have taken effective steps like acquisition and development of land and obtained various clearances, should be given protection, he aid.
While amending the NEIIPP, a re-investment clause and a percentage returns from the units operating should be re-invested to sustain industrial development and prevent the ‘flight of capital’, the Chief Minister said.
“While making the amendments I would sincerely request the DIPP not to dilute the purpose for which of the transport subsidy scheme was conceived as this may put an end to the aspiration of the Northeastern states to industrialize,” Dr Sangma said. This would also be contrary to the assurances made by the Prime Minister in 2008 where he stated that NEIIP will be suitably reworked to provide maximum advantage.
On the other hand to achieve and implement the assurance of the Prime Minister, the DIPP may also waive the requirement of pre-registration for claims which were with retrospective effect as genuine investments have been made and these units are functioning till today. He also demanded for changing of definition of plant and machinery which should not necessarily be confined to an apparatus which is used for mechanical operations.
The Chief Minister complained that 100% Income Tax Exemption is not available as promised in the NEIIP, 2007 as the various incentives received by industrial units are taxed as “Income from other sources”. The DIPP should take up the matter with the concerned Ministry to restore the original commitment made in the policy, he aid.
Giving specific example of Meghalaya, the Chief Minister said transport subsidy scheme and North East Industrial Investment and Promotion Policy are complimentary to each other in the State.
Since 2007 , the State Government has approved about a hundred investment proposals starting from cement plants to steel plants at a total project cost of about Rs 19,000.00 crore with employment potential at 10675 persons. However, only about 15% of the approved projects are under implementation stages and the rest are at preliminary stages of implementation and new investors are hesitant to invest due to varied changes in decisions and commitments of the center, he added.
The Meeting discussed the proposed definition of ‘manufacturing’, amendment to the negative list of TSS, expansion of existing list of designated railheads. The views of states were also obtained on the issues of cap on value of transported goods, linkages between transport subsidy and employment generation.
The meeting also explored the ways of incentivizing transportation of raw material/finished goods by inland water transport and Additional incentives to MSME sector.The Union Minister emphasized focused and integrated thrust to the development of North Eastern Region. While provision of subsidy will remain an important element in catalyzing industrial development, equally important will be a thrust on infrastructure development within the region and linkages with the rest of the country, he felt.
Chaired by Union Minister of Commerce & Industries and Textiles in the presence of with DoNER Minister Paban Singh Ghatowar, the meeting was attended by industry ministers of the North-East as well as other special category states.