The Telegraph
Saturday , December 8 , 2012
Since 1st March, 1999
CIMA Gallary

Centre admits industry lapse

Guwahati, Dec. 7: The Centre has admitted that the industrial policy for the Northeast has not led to big-ticket investment by the private sector and is looking into a demand for review of the incentive package for creating better environment for investors.

The facts stated by the Planning Commission in its draft Twelfth Plan document will be placed before the National Development Council on December 27.

“The impact under the industrial policy for the Northeast has not been impressive. There are many reasons, including the issue of connectivity, power and disturbance in some pockets of the region. However, there is a demand for review of the incentive package under the policy, which may be looked into during the Twelfth Plan for creating an enabling environment for investors and rational use of local resources. In this context, the department of industrial policy and promotion has initiated some action,” the report said.

“Meetings between industry associations and banks would be helpful in understanding the associated problems related to industries for suitable incorporation in the modified policy,” it said.

The report further said that despite having large investment opportunities in sectors like hydropower, infrastructure and natural gas, healthcare, textile and handicrafts, tourism, horticulture and agro-based industries and mineral, northeastern states are yet to witness any major investments by private investors. Land for setting up industrial units has also been a big constraint in the region.

“The special fiscal package under the Northeast Industrial Policy has so far failed to trigger major investment flow into the region. The policy did lead to some investment in industrial units in and around Guwahati in tea, coal, plastics, cement, cosmetics and metallurgy but has not been able to attract investors in other parts of the region,” it said.

The northeastern states have requested the Centre to revise the 2007 North East Industrial and Investment Promotion Policy to give more thrust to the micro, small and medium enterprises sector, at a meeting of the forum of ministers of industries and commerce of the region in June for a mid-term appraisal.

According to an assessment based on the financial investment intentions by private/public sector enterprises during the Eleventh Plan, 336 units had expressed interest for investment involving Rs 38,892 crore. However, this does not necessarily reflect the actual flow of investment during the period.

The indicative investment flow is inclusive of the gas cracker project in Assam, expansion of Guwahati and Digboi refineries of Indian Oil Corporation, who have the largest share. The share of investment (based on letter of intent) in the Northeast was, however, only 0.58 per cent of the total intended investment at the national-level.

A majority of the investments were in Assam (133 units), Sikkim (70 units), Meghalaya (62 units), but the number of units in the rest of the states was less than 10.

“When an investor comes to the Northeast, he comes with a long-term plan. He wants a conducive policy environment, infrastructure, adequate power, land and other things required for his investment,” R.S. Joshi, chairman of Federation of Industry and Commerce of North Eastern Region (Finer) told The Telegraph. The trade body has been clamouring for an exclusive five-year plan for the region to address the issue of regional imbalance with the rest of the country in terms of investment.