Guwahati, Oct. 25: In two major initiatives to attract investment and usher in the elusive industrial boom, the Assam cabinet today decided to restore sales tax exemption as applicable in the 1997 industrial policy. It also gave its nod to restructuring the Assam State Electricity Board (ASEB) into five separate companies to boost the state power scenario.
The industry and commercial associations have expectedly hailed the twin decisions as the “right” Diwali gift to the state. The exemption will be for a period of seven years.
The exemption was deferred in the new industrial policy announced by the Tarun Gogoi government in September, evoking strong protests from trade and commercial associations.
Emerging from the cabinet meeting, Assam industry minister Bhubaneswar Kalita said the cabinet decided to continue with the sales tax exemption of the 1997 policy as the Centre had objected to incorporation of fresh sales tax exemption in the new state policy announced in September.
“We had assured the trade associations during a meeting on Monday that a solution would be evolved to resolve the problem. Accordingly, the cabinet decided that till the Union government allows incorporation of the sales tax exemption in the new policy of 2003, the sales tax exemption as envisaged in the 1997 policy will continue,” Kalita said.
The industry had severely objected to the new policy, fearing an exodus of capital and industry from the state. This would have crippled the state’s economy, adding to the growing unemployment problem.
Besides restructuring of the ASEB, the cabinet also approved the 1200-crore Asian Development Bank loan for power reforms in the state. A senior ASEB official, while welcoming the much-awaited move, said the government had no alternative but to go for it. “However, for smooth sailing, the government should ensure total transparency while deploying men and machines,” the official added.
The unbundling of ASEB will see all generating assets of the board transferred to the new generating company to be christened Assam Power Generation Corporation. The corporation will also be responsible for development and promotion of new projects. ASEB officials have been finalising the operational details and modalities of functioning of the new companies.