Michael Syiem in Shillong on Wednesday. Picture by UB Photos

Shillong, July 25: It is raining subsidies in the “abode of clouds” as cement companies pocket crores of taxpayers’ money in the form of financial incentives both from the Centre and the Meghalaya government, all in the name of industrial development in the “backward state”.

The figures unearthed by the Maitshaphrang Movement, an NGO, on the revenue generated from and subsidies granted to cement companies located in mineral-rich Jaintia Hills district, reveal the that wealth lies in subsidies.

From 2011-12, through the Right to Information Act, 2005, the NGO collated the details regarding royalty on limestone, royalty on coal, Central Sales Tax (CST) and Meghalaya VAT, which the eight companies paid to the Centre and state government.

The NGO also sought details on the subsidies, emanating from the Centre and state government, which were paid to the companies.

The companies include Star Cement, Meghalaya Cement Limited (MCL) or Top Cem, JUD Cement, Green Valley Cement, Hill Cement, Amrit Cement, Adhunik Cement and Megha Technical Engineer.

They are located in Thangskai, Lumshnong, Mynkre, Wahiajer and Nongsning villages under Khliehriat civil subdivision.

According to the figures (see chart), the companies, altogether, have been able to pocket more than Rs 100 crore as subsidies while the revenue earned (royalties on coal and limestone, CST and MVAT) was a meagre Rs 78 crore.

The royalties on coal and limestone were collected from 2005-06 till 2012-13 (upto May 2012).

It was only in the case of Meghalaya Cement (Top Cem) that the revenue generated (excluding CST) was a little higher than the subsidies granted. In case of the other firms, the subsidies were much higher than the revenue paid.

The logical inferences from the figures reveal that the cement companies earn 100 per cent from each bag of cement they put on sale. And ironically, in spite of the huge subsidies, the price of the cement in the region is quite high.

While crores of rupees are being poured into the cement plants in the form of incentives under the Special Industrial Promotional Policy, the price of cement in the Northeast is the highest in the country.

Sources said in Shillong the price of cement manufactured by the companies varies between Rs 300 and Rs 400 per bag.

Moreover, four out of the six companies have not received all the components of central and state subsidies. Till the information was sought, no revenue has been collected or subsidies disbursed from and to Goldstone Cement and Amrit Cement.

With the kind of huge subsidies being disbursed to the companies, it would be logical to conclude that for payment of royalties and taxes, the companies extract the amount from the subsidies.

“As the companies enjoy the subsidies, the environment in Jaintia Hills is also degrading day by day. They are also violating the Forest (Conservation) Act, 1980, Maitshaphrang Movement leader Michael N. Syiem told reporters.

Syiem also said while Meghalaya is a “rich” state though its inhabitants are “poor” as the percentage of BPL families stands at 66 per cent.

It is still debatable, though, whether the subsidies granted to the companies has, in any way, aided the state to achieve higher economic growth.