The Telegraph
Since 1st March, 1999
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Industry takes on minister over sops

Guwahati, May 16: Captains of Northeast-based industries today accused Union minister of state for commerce and industry Vidyasagar Rao of “pulling a fast one on the region” by misrepresenting facts about excise duty concessions offered to Jammu and Kashmir, Uttaranchal and Himachal Pradesh.

The minister had said at the review meeting of the Northeast industrial policy yesterday that the concessions offered to these three states were not a hindrance to “industrial progress of the seven sisters”. He is scheduled to leave for New Delhi tomorrow after completing a tour of the region.

Rao said the Centre decided to extend excise concessions to the three states only because these were not in conflict with the needs of the Northeast. He claimed that the incentive packages vary both in terms of their content and thrust lists, which depend on the local resources and concerns of specific regions.

The minister explained that the choice of setting up industries in the Northeast “is very wide under the Centre’s policy”, whereas the ambit of the special packages offered to the other three states is small. Insisting that New Delhi was committed to the region’s development, he said 100 per cent income tax-exemption for 10 years had been offered for new industrial units.

However, Manoj Jajodia, convener of Promotion of Industrial Northeast (PINE), raised objections to the “negative list” for Uttaranchal and Himachal Pradesh, which specifies the units for which there will be no excise concessions. He said this list includes types of industries that would not be viable in the Northeast.

Jajodia said the Northeast was being treated as “a dumping ground” instead of being given a level playing field. He argued that the region deserved special attention because its geographic location was less conducive to business in comparison with other states.

Citing examples, the PINE convener said nobody would set up explosives, thermal power and insecticide plants in the Northeast as these were neither viable nor environment-friendly. “The negative list for Uttaranchal and Himachal Pradesh may be long, but not all industries mentioned in it are viable in our region.”

Jajodia said manufacturing units for explosives, insecticides and coal foundries would not be set up even in Uttaranchal and Himachal Pradesh because of the prospect of adverse ecological affects. “Industries that have come up in the Northeast surprisingly do not find mention in the negative list for Uttaranchal and Himachal Pradesh. The industries left out are mainly in the fast-moving consumer goods sector.”

The entrepreneur complained that the damage had already been done and many industries had already shifted to the states where excise concessions were being offered. “Some of these industrialists had promised to make huge investments in the Northeast, but quietly pulled out after the Centre decided to extend excise concessions to Jammu and Kashmir, Uttaranchal and Himachal Pradesh.”

Another businessman said Uttaranchal and Himachal Pradesh were “much closer to markets and sources of raw materials” than the Northeast and, hence, would enjoy a distinct advantage. “Our region hardly produces any raw material and all industries have to bring them from outside. Since industries located in Himachal Pradesh and Uttaranchal are much nearer to the sources of raw materials, they will definitely have an advantage over the Northeast.”

Rao had said that governments of the seven states of the Northeast should work out long-term vision strategies for investment and ensure adherence to implementation schedules instead of complaining about lack of opportunities.

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