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Industry wary of Govt promises

EVEN AS Chief Minister Shivraj Singh Chouhan is preparing for the ?Investors Meet? in Bhopal on March 27, one question that is being asked in the corridors of the industries is whether the Government?s promises can be relied upon in the wake of disappointing experiences of the past in this regard.

india Updated: Mar 26, 2006 14:23 IST

EVEN AS Chief Minister Shivraj Singh Chouhan is preparing for the ‘Investors Meet’ in Bhopal on March 27, one question that is being asked in the corridors of the industries is whether the Government’s promises can be relied upon in the wake of disappointing experiences of the past in this regard.

The Chief Minister is holding the Investors Meet to know firsthand the problems faced by the industries and the implementation of the Industrial Policy. Besides the Chief Minister, several Cabinet ministers, senior Government officials, industry associations’ representatives and investors who have invested in the State during the last two years will be thrashing out issues concerning the industries in the meeting.

On the eve of the meet, there is apprehension among the investors and industry representatives about the reliability of the Government’s promises. Their apprehension stems from their past experiences. Even though the BJP Government had promised several sops in the Industrial Policy announced on June 13, 2004, the Government changed tract while implementing them, much to the chagrin of investors, especially those who have invested after the announcement of the Industrial Policy in 2004.

For example, the Industrial Policy had promised 15 per cent capital subsidy up to Rs 15 lakh to the small-scale industries and 5 per cent interest subsidy for five years up to a maximum of Rs 20 lakh (para 4.2.1 and 4.2.2 of the policy). Besides, the policy had also promised that those who invest more than Rs 1 crore would get 50 per cent sales tax refund for five years (para 4.2.15).

After the Policy was announced in June 2004, the notification for these benefits came in 2005. The first notification came for the 50 per cent sales tax refund on February 25, 2005, while the second notification for the capital subsidy came in June 25, 2005.

Surprisingly, the Government issued another notification on July 7, 2005, putting restrictions on availing of these benefits. As per this notification, only one benefit would be given to the industries.

The Government’s u-turn made the industries furious. “Those who have invested relying on the Government polity felt cheated. At least the Government should have given both the benefits to such industries which have taken some effective steps towards investments relying on the Government Industrial Policy”, fumed Pithampur Industry Association president Gautam Kothari.

Though the industry associations made several representations to the Government, pointing out the discrepancies in the Policy and its notifications, there has been no response at all. “At least they should respond, negative or positive”, Kothari said. This issue will definitely top the agenda in the meet, he added.

First Published: Mar 26, 2006 14:23 IST