GUWAHATI, Dec 28 — North East industrial units which had been existing prior to the North East Industrial Policy (NEIP), 1997, are eagerly awaiting some special sops from the Centre in the New Year. At the initiative of the NE MPs, the Central Government had constituted the sub-committee-III of Department Related Parliamentary Standing Committee to formulate transparent subsidy for the benefits of industries in NE especially those which are outside the purview of the NEIP, 1997. The sub-committee headed by the Department of Industrial Policy and Promotion held a meeting with representatives of industries in NE and the NEDFi at New Delhi on December 24 last in order to elicit suggestions on kinds of special incentives required by NE industries. The sub-committee is supposed to make its recommendations on special incentives to be provided to existing NE industrial units by the end of January next.
Federation of Industries and Commerce of North Eastern Region (FINER) has made certain specific suggestions vis-a-vis special incentives to NE industrial units before the sub-committee during the meeting on December 24 last. The FINER president, Abhijit Barooah who attended the meeting with the sub-committee, sugested that all benefits of NEIP, 1997 should be extended to existing industrial units. He argued that these existing units set up prior to the NEIP, would stay in the region even after the Central Excise benefits taken off at the expiry of the NEIP. Some of these units are now passing through bad times due to inherent and locational disadvantage characteristic to the region and therefore need special benefits from the government to survive as well as for expansion so that the basic purpose of the NEIP that is to expedite industrialisation in the region, can be achieved.
The FINER further mooted that the capital investment subsidy grafted under the NEIP should be increased to 30% of all fixed assets including land, building, plant and machinery subject to a maximum limit of Rs 100 lakh from the present 15% of plant and machinery subject to a limit of Rs 30 lakh. This should be so for the reason that small and medium entrepreneurs in the region are perennially short of financial resources to set up units. Therefore, an increased capital investment subsidy will encourage setting up of more industries.
Moreover, similar benefit is existing in the rest of the country and the enhancement in the capital investment subsidy will put the NE at par with the rest of the country. The FINER argued that interest subsidy should be increased to 50% of the interest paid to the bank by the entrepreneurs on term loans and working capital loans from the present level of three per cent of working capital loan interest. The reason given is that when the entrepreneurs will receive back half of the interests paid to bank as subsidy, it will spur them to go for prompt repayment of loans which, in turn, considerably remove the apprehension on part of the banks and FIIs in the region to lend more to local small and medium scale industries.
The FINER further asked for waiving of Central excise duty on tea in the next budget with a provision to review it in succeeding budgets in view of the lean patch hitting the industry as of now. As per the existing rate the tea industry has to pay Rs 2 per kg of made tea central excise duty. Waiving of Central excise duty on tea will deprive the Centre of about Rs 50 crore per annum which is not a very big amount for the union government in case it provides the much needed succour to the industry that has employed lakhs of local workers in the region for years. The FINER president informed that the government of India is set to lose only about Rs 150 crore per year even if it grants Central Excise benefits to all existing industries in the region. “The existing industries in the region need special benefits in view of the failure of the NEIP, 1997 to trigger industrialisation so far in the region at the expected pace,” he said.