Excise duty relief: BJP demand may affect NE

It was the Centre�s unilateral move of granting the same concessions to the two North Western Hill States that literally neutralised the special industrial and investment package for the North Eastern Region, leading to flight of investments into Himachal Pradesh and Uttarakhand and widespread protests from the region.

The Central Government in 2003, granted excise duty and income tax exemptions and also capital investment subsidy for the north-western hill states of Uttarakhand and Himachal Pradesh.

The announcements led to a flurry of protests from industry bodies and associations. The chief ministers of NE states had taken up the issue with the Prime Minister, only to be assured that the special incentives given to the two states were for limited period only.

The NE states had reasons to be alarmed. Chief Minister Tarun Gogoi while addressing a meeting of the National Development Council (NDC) flagged the issue of �dilution� of the North East Industrial Policy (NEIP). �The 1997 policy got diluted and became less attractive for the North Eastern states due to its extension to other states like Uttaranchal, Himachal Pradesh and Jammu and Kashmir,� he said.

He pointed out that the North Western States had attracted industrial investment of more than Rs. 17,000 crore in nearly three years time, as against Rs 1300 crore only by entire NE states during nine years.

�I therefore, strongly urge that various provision of NEIP should carefully be reviewed and a modified NEIP should be formulated exclusively for the North Eastern States, so that the benefit of the policy can be reaped by the states of this region during Eleventh Plan,� he had pleaded.

Joining the issue, Chief Minister of Tripura, Manik Sarkar told the same meeting that the benefits which would be available under new NEIP (North East Industrial Policy) should not be extended to other parts of the country, which can have their own special packages, as such extension only dilutes the benefits and rather discourages industry from coming to this region.

However, following the termination of the excise duty exemption, the BJP in a three-page-long petition has claimed that the premature termination has rendered futile the efforts of the states in synchronizing their policies with the special incentives package.

�Unless the excise duty exemption component of the special incentives package is restored, industrialisation of Himachal Pradesh and Uttrakhand will be irreparably harmed and the states will remain industrially backward. It is, therefore, essential that the excise duty exemption component of the special incentives package is restored as originally notified, without any cut-off date or at least allowed till March 31 2013, for both the north western states on the analogy of the North Eastern States, where similar incentives stand extended till 2017,� the petition said.

The BJP has contended that of the concessions, the excise duty exemption was most important incentive and was effective in attracting investments in these two states.

Advocating continuation of the concessions, the BJP leaders said Himachal Pradesh and Uttarakhand rightly deserve the continuation of the special package of incentives because of the peculiar and tough geographical conditions, their industrial backwardness, and lack of rail and air connectivity and because of locational disadvantages for industries as compared to Punjab, Haryana and other states of the country.

Interestingly, the Legislative Assemblies of both the states have passed resolutions for the restoration of the industrial package and have requested for continuation of the same till the year 2020.