Assam tobacco units all set to wind up

GUWAHATI, March 6: The much-vaunted 'industrial revolution' in the State is perhaps going to have a nose-dive much before its actual take-off. For, taking advantage of the latest 'far-sighted' Union Budget, the companies, which had set up their tobacco-based units in the State in the recent years, have started preparations to wind up their units pleading 'economic weariness' following the withdrawal of the excise duty exemption. It perhaps needs no mention that most of the industrial units set up in the State during the recent years were tobacco-based units and the latest Union Budget declared the withdrawal of excise duty exemption on tobacco-based products. Take the example of the Northeast Tobacco Company Ltd (NETCO) at Amingaon. It started production on December 15, 1999 with an installed capacity of 300 million cigarettes per month. It had a total employee strength of 450, of whom 120 are regular and the rest casual. The company was running smoothly and producing more than its installed capacity every month. But, on February 24 last, the management of the company terminated all the casual workers and on February 28, asked a number of regular employees and executives to tender their resignation papers or face termination. For the move, the management reasoned that the company would be closed down shortly. It may be mentioned here that on February 28, while presenting the Budget, Union Finance Minister Yashwant Sinha proposed to bring an amendment to the Industrial Disputes Act for the purpose of raising the threshold limit of companies seeking prior permission to retrench employees of closed-down units having employees between 100 and 1,000. But, between December 15, 1999 and July, 2000, the company received a central excise duty concession to the tune of about Rs 12 crore (Rs 119,06,18,745), besides, it is also expecting a refund of Rs 62 crore from the Central Excise department as duty exemption from August 2000 to January 2001, as the company has its factory located in the NE region, said the employees. Though the management of the company has now been trying to buttress its decision for massive retrenchment following the centre's decision to withdraw the excise duty exemption on tobacco products, the argument sounds unfounded as the decision to withdraw the duty exemption on tobacco products will be applicable throughout the country. Moreover, the company has also benefited from the 1997 Industrial Policy of the State which provided 50 per cent power subsidy for a period of five years, sales tax exemption for seven years, and other subsidies like 30 per cent capital investment subsidy, infrastructure development subsidy, among others, in addition to the 90 per cent transport subsidy, Central capital investment subsidy and other subsidies offered by the Union government to bring about an industrial development in the NE region. It will perhaps not be out of context to mention that the 330 casual employees of the NETCO's Amingaon unit and about 80 of its employees working against regular posts were local youths. These 80 employees were assured confirmation in March and April this year. And now, the employees alleged, the management of the company is planning to shift their Amingaon factory to Mumbai or Baroda. Perhaps, other tobacco-based units set up in the State during the recent years will also follow in the footsteps of the NETCO management, the NETCO employees said.