The local hand-tool industry has claimed that the state government has been unnecessarily pressing it to give its entire share for the 84-crore hand-tool cluster project in advance, even as work on the central-government sponsored project is yet to start. Industry representatives have also termed the demand as unjustified.
“The industry paid its due share of contribution (Rs 1.2 core) well before the release of Centre’s first grant of Rs 17.48 crore came through. Even then the state government allowed the project to linger on for more than three years on one pretext or the other,” a leading hand-tool industrialist and director of Indian Tools Technology Centre (ITTC), constituted as Special Purpose Vehicle (SPV) to run the cluster, MK Bhandari told Hindustan Times.
Bhandari added that in 2010, the department of industrial policy and promotion (DIPP), sanctioned the hand-tool cluster, comprising a common facility centre for technological development worth Rs 79.49 crore and as per the terms and condition 75 per cent (Rs 58.28 crore) of the cost was to be given by the centre, 10 per cent (Rs 9 crore) from the state government and 15 per cent (Rs 12.21 crore) from the members of the cluster.
The norms of investment stated that the industry was to deposit 10 per cent (Rs 1.2 crore) of its share before the disbursal of first installment by DIPP (Rs 17.48 crore), which were accordingly released by both the partners, Bhandari said.
He added that now it was the time for utilisation of the available grant before claiming the second installment from DIPP, for which industry was ready to to pay another 30 per cent (Rs 3.6 crore), but only at the appropriate time.
As per the agreement of the project (copy of which is with HT), it is clearly stated that
the first installment of 30 per cent of the approved Central grant will be released in advance and second installment of 30 per cent of Central grant would be released after utilisation of 80 per cent of the first installment and proportionate contribution from the industry.
The state government’s demand of the entire contribution of Rs 12 crore from the industry was highly deplorable and illogical, Bhandari added.
On April 3, industry minister Anil Joshi had directed the hand-tool industry in the district to deposit Rs 12 crore as its contribution to the cluster by April 20, so that project could be launched before April 30, deadline given by DIPP.
“Instead of throwing a bombshell in the form of demand of Rs 12 crore from industry, the state government should have launched the project with the available money of about Rs 20 crore to win our confidence, so that industry’s installment of Rs 3.6 crore could also be paid in advance to claim the second installment of the grant from DIPP,” Bhandari advocated.
Another leading hand-tool exporter and former director of cluster, Sharad Aggarwal said “To avoid scrapping of the prestigious project, it should be launched with the available money, which will give confidence to DIPP and reduce any possibility of the cancellation of project.”
The project could not be started as the municipal corporation took its time giving land for the project. In 2011, land was allotted and a special purpose vehicle (SPV) company, Indian Tool Technology Centre comprising 10 leading handtool industrialists, as directors, was formed to operationalise the cluster.
Later on, due to a reported power tussle among the 10 board of directors, the state government intervened in October 2012 and re-constituted the board with five directors, led by state industry director Vikas Partap Singh.