PM's help sought in Tripura tax fracas

AGARTALA, March 6: Tripura Chief Minister Manik Sarkar has sought Prime Minister Atal Bihari Vajpayee's intervention in the controversy arising out of the withdrawal of central Excise duty exemption for setting up industries in the Northeast. A section of local entrepreneurs alleged that tax benefits were being cornered by unscrupulous investors from outside the state. Official sources here said during his visit to Guwahati on December 24, 1997 the then Prime Minister Inder Kumar Gujral had announced an incentive package for setting up industries in the Northeast. The Union finance ministry issued a notification on July 8, 1999 extending central Excise exemption on certain goods produced in the Northeast. The purpose was to facilitate investment and growth of industries in the Northeast. However, the ministry withdrew the exemption vide a fresh notification issued on March 1 this year. In a letter to the Prime Minister, Sarkar said the withdrawal of benefits will lead to a major slump in investment in the state. He pointed out that after the exemption, the state government had received proposals for setting up industries worth Rs 500 crore which would have provided employment to at least 3,000 people. He said some units had invested in the state only to avail of tax benefits. Describing the finance ministry's latest notification as a setback to investment and growth of industries in the state, Sarkar said frequent changes in policy matters would impede the process of setting up industries in the Northeast. However, local entrepreneurs expressed reservations over the issue saying all the benefits were being usurped by investors from outside, who came to the state with the sole intention of reaping the benefits of exemption. Local entrepreneurs, who have been demanding more incentives for investors in the region, said according to a statement made by Union finance minister Yashwant Sinha in Ranchi on March 1, the Centre had lost Rs 400 crore because of the exemption.