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North East : Centre to rectify its Industrial Policy

	March 21, 2005

Over two years after deciding to review the North East Industrial Policy, New Delhi has finally got down to the task of rectifying the deficiencies in it.

According to reports, the Union Ministry of Commerce and Industry, which monitors the implementation of the policy, is understood to have sent a cabinet note to the Prime Minister’s Office (PMO), recommending certain changes in the package. One of the proposals is to extend the term of the policy till 2017.



The policy had been introduced in 1997 for a 10-year period. A source said the proposal for an extension was necessitated by the ‘lopsided’ impact the policy has had on some states of the region.



The Commerce and Industry Ministry’s note to the PMO is based on the proposals submitted by the Federation of Industries and Commerce of the North Eastern Region (FINER) and a report by the Tata Economic Consultancy Services.

In a memorandum to Prime Minister Manmohan Singh in November, FINER suggested that the industrial policy be revised to do away with ‘locational disadvantages’. It said incentives were at present being offered only to those industries set up in designated areas such as growth centres.



FINER said industries of the region must be exempted from the minimum alternate tax (MAT) regime and the upper ceiling of capital subsidy, pegged at Rs 30 lakh, be abolished.



‘Our recommendations address the deficiencies in the policy. This issue has assumed more importance in view of the incentives being offered to some north Indian states,’ FINER vice-president R.C. Joshi said.

The package, which was introduced specifically to increase private investment in the North East, offers income tax and excise exemptions apart from interest, transport and capital subsidies to investors willing to set up industries in 18 designated sectors. Assam and Meghalaya have been the major beneficiaries, cornering nearly 94 per cent of the total investment since the policy took effect.



MPs seek watchdog for DONER

In a related development, parliamentarians from the North East have demanded the constitution of a parliamentary consultative committee that would keep a watch on the ministry for the Development of the North Eastern Region (DONER) and its departments.

A 25-member delegation, led by Manipur’s Rajya Sabha representative Rishang Keishing, told Prime Minister Manmohan Singh that the committee could be on the lines of monitoring panels attached to other ministries.

‘The idea is to establish accountability and transparency in the functioning of these agencies and execution of development programmes. This is the need of the hour,’ Assam Lok Sabha member Arun Sarma, who is the general secretary of the North East MPs’ Forum, told the media.

He said the possibility of monitoring central agencies outside the purview of DONER would be explored later.

DONER was upgraded to the status of a ministry last year.

The concern expressed by MPs over the absence of a parliamentary committee for DONER is not misplaced, given the fact that the ministry failed to revamp the Sikkim Mining Corporation, which is now on the verge of closure.

DONER has also faced criticism from the governments of the northeastern states for not sanctioning projects on time.

DONER’s role in the development of the North East is crucial. It requires a parliamentary consultative committee to improve its efficiency,’ said Manipur Lok Sabha member Th. Meinya Singh, who is also a member of the standing committee attached to the Union Human Resource Development ministry.

The MPs from the North East submitted a memorandum listing their other demands during the meeting with the Prime Minister in Parliament.

Singh assured the delegation that he would discuss the proposal to set up a consultative committee with Lok Sabha Speaker Somnath Chatterjee and Rajya Sabha chairman Bhairon Singh Shekhawat.