NEW DELHI, April 30 —Amidst fervent pleas by the Members belonging to the North-East, Finance Minister, Jaswant Singh today assured to review the proposal to withdraw the excise duty exemption on certain products but stopped short of making any firm commitment. A demand for withdrawal of cess on tea was also turned down. But the Minister tried to dispel the impression of being left out by reiterating the commitment of the Government to implement the special packages given to the region. “My love affair with North-East goes back to 1958”, he said.
“Since that period and during the 1962 war, I have spent a lot of years in North-East. The Prime Minister package is not an empty announcement” he said, adding that he would stand by what the Prime Minister has announced. But the Minister relished the proposal to name Dibrugarh-Guwahati rail tracks after him if he sanctioned funds for its electrification. But he shifted the burden to the Railway Ministry. The area of concern here is misuse of developmental assistance, he said referring to the misuse of the excise duty exemptions by the cigarette and tobacco companies.
The North-East is an integral developmental concern of this Government. “I have taken note of the concerns expressed by the Members about the withdrawal of excise duty exemptions in respect of tobacco and tobacco products. The withdrawal was in view of the abuses, including large-scale evasion, observed in the case of tobacco and tobacco products, commodities subject to a high rate of duty”, he said. The Member’s concerns related of the realm of policy and that there should be some continuity with regard to Government’s commitment. The Members also raised questions about the future of the units that have been set up and are continuing their operations.
Even as the Finance Minister was replying to the debate on the Finance Bill, a few members including Santosh Mohan Dev and K A Sangtam interrupted Sri Singh seeking a firm commitment on the issue. In the course of the debate that last four days, several members including Paban Singh Ghatowar and Bijoy Krishna Handique had also raised the issue. In response the Minister said that Government remained fully committed to its announcement for the North-East. But members would agree, he said, that there was a need for a review whenever any policy is observed to have been hijacked or twisted out of shape in its implementation. “As for the units that are continuing the operations, I will address their concern”, he assured.
Amidst interruptions, he said what has resulted was a complex legal requirement. He said suggestions have come that excise duty exemptions can be withdrawn in case of cigarette and pan masala. But cigarette, pan masala, ghutka are all in the demerit group, the Minister said, asserting that the decision whether to remove one or the other should be left to the Government. “I am fully seized of it and I will examine the legal aspect of it. Leave the matter to me I will find a suitable solution to the problem”, the Minister said.
Referring to the demand for withdrawal of the Re 1 cess on tea, the Minister said that as the cess was critical for the development of tea industry on a sustained basis and for well being of the industry and it should be accepted for the time being. “I don’t think removal of Re 1 cess would be helpful”, he said. Sri Singh announcing that the cess would remain said he was sympathetic to the demand, he was mindful of the problems being faced by the industry, which is the country’s oldest agro-industry. But he pointed out that problem faced by tea industry in South was different from that being faced in Assam.
However, Sri Dev again interrupted the Minister to clarify that demand was for removal of the cess only for the lean period through which the industry was passing through to tide over the crisis. Earlier participating in the debate, the MP from Barak Valley mentioned about the delay in implementation of cracker project, which was a part and parcel of the Assam Accord signed by Rajiv Gandhi with All Assam Students Union (AASU) in 1985. Since then, it has been 18 years and it is yet to take shape.
Something should be done to fulfil the desire of the youth of that area. This will cater the need of the employment of the whole North-Eastern region. “About the withdrawal of the tax incentives to North-Eastern industries, I understand well some cigarette companies misused the benefit. You punish that particular industry, but why everyone”, he questioned. “The refineries have been deprived of this excise concession. Otherwise, the proposal will be a suicidal one for our State”, he said.
“The Tenth Finance Commission allocated States like Nagaland, Jammu and Kashmir and Himachal Pradesh Rs 3536 crore, Rs 11,211 crore and Rs 4,514 crore respectively as non-Plan revenue grant but Assam got only Rs 110 crore. I would request that Rs 1000 crore which was not given to Assam should be given back so that we could overcome the overall financial crisis which we are facing” he demanded. Participating in the discussion, K A Sangtam said due to various factors, the North East is very backward and its economy is still at low ebb. Therefore, the Government of India has been announcing package after package for the North-East, but because of the flip-flop policy of the Government of India, a wrong message has gone to the industrialists. The solution lies in the plugging of holes in the policy of implementation rather than scrapping the policy or tampering it on a monthly basis.
In this connection, the Government of Assam, the Government of Tripura as well as the Members of Parliament of North-East have represented to the Prime Minister of India and the Finance Minister for continuation of tax holiday for the North-East as well as exemption of excise duty. “The entire North-East is reeling under tremendous economic problems and we have to provide better jobs to the people and bring industrial development to the North-East. The companies which have already established their factories and are manufacturing products in the North-East and give gainful employment to the people should be given the benefits of tax holidays and excise duty exemption”, he said, adding that Industry Policy for region should not be tampered with by any of the Ministries in the larger interest of unity, integrity, peace and harmony of this country.