NEW DELHI, Oct 30 ? Flight of capital from the North Eastern Region (NER) has forced Centre to review the new industrial policy, with the Union Finance Ministry mulling withdrawal of the special incentives given to three States of Himachal Pradesh and Uttaranchal by 2007.
However, the heartening piece of news has to be taken with a pinch of salt because by then large chunk of investments would have been withdrawn from the NER, experts here believe. As it were, investments in North-east started plummeting after the previous NDA regime sanctioned similar incentives for the two States in 2003 to boost investments.
According to an estimate by FINER, while the NER since pronouncement of the NEIP in 1997 managed to attract investments worth only Rs 1,268 crore generating 38,000 new jobs, the two Himalayan States left it far behind. Himachal Pradesh for instance saw additional investments worth Rs 7,019 crore pour in less than two year leading to creation of 1.19 lakh new employment.
Uttaranchal, similarly, had additional investments worth Rs 8,630 crore generating 1.05 new jobs. The new industrial policy came into effect in two States on January 7, 2003. The plight of Jammu and Kashmir where the incentives were given was similar to that of the NER. The terrorism infested State managed to attract investments to the tune of only Rs 1,609 crore leading to creation of 80,000 new jobs.
These startling figures were brought to the notice of Union Finance Minister, P.Chidambaram today by AGP MP, Dr Arun Kumar Sarma, who informed him that the incentives given to the two States would be withdrawn in next four years.
The Union Finance Minister further assured that his Ministry would examine the note prepared by FINER. Later talking to this newspaper Dr Sarma said the factor that announcement of similar incentives for the two States had resulted in withdrawal of incentives from the NER was stressed on the Union Finance Minister.
To negate the impact of the disastrous move by the Centre, it was demanded that the UPA Government should announce new incentives for the NER. The incentives under NEIP should be made available to all areas in the Region.
Besides both the Capital Investment Subsidy and Interest Subsidy should be enhanced to 30 per cent and 50 percent, respectively. In addition, healthcare and tourism should be included in the specified industry list and the entire Region should be declared as tax free zone.