GUWAHATI, May 16 ?Industries, that had committed crores of Rupees in investments in Assam, have suddenly lost interest in setting up bases here. They are, instead, directing their investments to Jammu and Kashmir, Himachal Pradesh and Uttaranchal, keeping an eye on the nearness of the immense north Indian market. The Centre?s dedision to extend tax concessions, similar to the ones offered to investors in the North East to states like Himachal Pradesh, Uttaranchal and Jammu and Kashmir, have driven prospective investors away from this remote region to the more lucrative northern states. While concessions for Jammu has already been notified, that for Himachal and Uttaranchal is on the anvil.
Expressing fears that industries may be tempted to relocate to the northern states Promoting Industries in North East (PINE), an association of industrialists in Assam, has demanded that a support package for the region should be announced by the Centre as soon as possible to stop industrialists from winding up operations here. Even a month?s delay may lead to closure of industries, PINE convenor Manoj Jajodia warned.
Dwelling on the impact of the concessions already announced for Jammu, PINE members said , in a press conference here today, that several industries that were planning to set up shop here have been having second thoughts. In fact, several potential investers, who had already done the spadework here, have abandoned their projects.
Sun Pharma, for example, which is top pharmaceutical company in India, suddenly decided to abandon their Rs 50 crore investment plan in Assam right after concessions for Jammu were notified in November 2002. Four projects, that were to be set up in the Export Promotion Industrial Park (EPIP) in Amingaon, have been shelved for similar reasons.
?Due to announcement of concessions in the better placed states, industries in the North East are suffering,? Jajodia stated. Since the granting of excise duty consessions in the region was announced in July, 1999, several fast moving consumer goods (FMCG) manufacturing units had come up in region, mostly around Guwahati, manufacturing toothpaste, cosmetics, air conditioners, televisions, water purifiers, etc. Had the incentives for this region been allowed to remain exclusive for a full decade, there would have been several ancilliary industries that would have come up, addressing the unemployment problem to a large extent. That advantage has now been eroded, PINE stated.
Referring the statements of some Central government officials that the granting of similar concessions to investors in the northern states will in no way affect investment in the North East, since several industries have been put on the negative list there, PINE stated that the negative list includes only those industries that cannot be set up in the North East too.