GUWAHATI, Dec 30 —The recent decision of the Central Government to offer special benefits to investors setting up industrial units in Jammu and Kashmir, Uttaranchal and Kutch region is likely to prove detrimental to North East Industrial Policy, (NEIP), 1997. The NEIP which has so far failed to take off in terms of luring heavy and permanent investment to the region barring a handful of packaging units, will cease to hold any attraction to the outside investors in the wake of similar sops being offered by the Government of India for setting up new industries in J&K, Uttaranchal and Kutch region. Sources in the industry here are of the view that unless the N-E State governments mount joint pressure on the Central Government to provide an edge to the NEIP compared to the sops offered for setting up new units in other three areas of the State, the special package for this backward region will become redundant as far luring outside investment is concerned.
North East region because of its inherent problems and locational disadvantage has never drawn attention of investors. In the wake of NEIP, 1997 which offerred benefits like excise duty and income tax concessions, transport subsidy, capital investment subsidy, interest subsidy etc for setting up of new units in this region so that industrialists are lured to set foot in this industry-starved region, hopes were raised for industrialisation. However, the hope is now all set to be dashed with availability of similar benefits for investors willing to set up units in Kutch, J&K and Uttaranchal. Sources informed that these three areas enjoy locational advantage over the North Eastern region as these are closer to flourishing markets in Northern and Western Indian markets and well connected to the upcoming market in the South India.
Industrial units manufacturing goods in the N-E are always suffering for being located far away from the markets within the country notwithstanding the transport subsidy provided by the Government of India to tranship raw materials and machinery. Sources pointed out that to keep the NEIP, 1997 attractive for the investors, the Government of India has to move on the fast track as far as its plan to convert the N-E a part of the international export zone comprising neighbouring Bangladesh, Myamar and Thailand. For that to happen the State Governments of the region as well as the MPs from the region have to do the spade work in the right earnest.