The new Northeast industrial policy, introduced in 2007, has opened the doors to investments in the north-eastern states, but it needs to be carefully reviewed to plug the loopholes leading to pilferage of incentives.
The ministry of commerce and industry’s department of industrial policy and promotion came up with a package of fiscal incentives for the Northeast region under the “Northeast Industrial and Investment Promotion Policy (NEIIPP), 2007. The policy, which was planned for a period of 10 years, has accelerated the pace of industrialisation and the development of the region but at the same time also flooded the region with industrial units, which have come only for the period the incentives will continue. The ministry, which failed to carry out any mid-term review of the policy, also ignored the warning of the industrialists who discerned the threat much in advance.
Ratan Sarma, the director and proprietor of the Satyam Group of Industries who chose to set up their units in the remote and backward areas of Arunachal Pradesh and Manipur, admitted the necessity of stringent provision to ensure that incentives given to the industrial units are recycled to the region. Reacting to reports published in this newspaper on the misuse of central government incentives flowing to this region, Mr Sarma said: “We have been benefited by the incentives of the governments, but more than what we have got in incentives has been re-invested in new units by pulling additional resources from the financial institutions in the region itself.”
He defended that industrialists who belongs to this region have been recycling the benefits of the industrial incentives within the region itself, but the problem is with industrialists who are coming to reap the benefit of incentives only. He referred to industrial units owned by them, which are continuing its operations even after eligibility period for getting incentives is over.
He stressed the need of initiative to plug the loopholes and claimed that their industrial units in Manipur and Arunachal Pradesh was generating employments for hundreds of local youths.
He also claimed that their group has decided to expand their activities in the field of social responsibility by setting up schools besides broadening their investment in infrastructure sectors. The Satyam group is contemplating to construct a star category hotel in Assam also. Though opinion is divided, majority of the industrialists want the incentives to continue with certain amendments to check its misuse.
In fact, the largest and the oldest plantation industry of the region has also proposed more incentives to accelerate the industrialisation.
The Assam Valley Branch Consultative Committee of Plantation Associations, while making a presentation on behalf of the tea industry before the Cabinet secretary of India, called for an integrated state-of-the-art tea park in Guwahati, besides upgradation of the existing centre of the Indian Institute of Plantation Management (IIPM) at Jorhat into a full- fledged institute and upgradation of the Guwahati Tea Auction Centre to an international business hub of tea.
At the same function, Northeast industries circles pressed for restoration of the status quo ante to the NEIIPP, 2007 and lifting of the Restricted Area Permit System to promote free flow of tourists to the region.
They also called for removal of the Minimum Alternative Tax (MAT), exemption of Income Tax on the incentives received and adequate budgetary provision for disbursement of incentives.
Special incentives for the micro, small and medium enterprises in the NEIIPP, 2007, with a separate policy and a preferential price policy for this category of enterprises in the PSUs, have also been called for by the industries circles.
About waterways, the industries circles referred to the Indo-Bangladesh agreement signed in January 2010 to improve trade and commerce and called for steps to provide access to sea ports of Bangladesh and Burma with stress on preparation of a comprehensive plan by the Union government for using river routes to link the region with Southeast Asia.