Only Rs.1 crore allocated in 2019-20 under North East Industrial Development Scheme, reveals report

Published : January 25, 2021 14:42 IST

Prime Minister Narendra Modi at a rally in Assam's Sivasagar district to distribute land documents to indigenous locals under a special scheme of the State, on January 23. Photo: Anupam Nath / AP

The Modi Government allocated only Rs.1 crore for the year 2019-20 under the North East Industrial Development Scheme (NEIDS), 2017, states the 227th Report of the Department-Related Parliamentary Standing Committee on Home Affairs on ‘Action Taken by Government on the recommendations/observations by the Committee on Demand for Grants (2020-21) of the Ministry of Development of North Eastern Region’.

“As no claims were received from State Governments, no allocation was initially made in NEIDS Scheme for BE (Budget Estimates) 2019-20. At RE (Revised Estimates) stage, after constant follow-up, State Level Committee (SLC) of Assam confirmed about some claims being ready for consideration and a token amount of Rs.1.00 crore was allocated. Govt. of Assam conducted the first meeting of SLC and considered the claims of six industrial units on 17th March, 2020,” states the report. 

The Modi Government replaced the North East Industrial Investment Promotion Policy (NEIPP) 2007 with the Central-sector scheme of NEDIS 2017 (notified in 2018), with an outlay of Rs.3,000 crore for the eight northeastern States.

The Committee presented the report to the Rajya Sabha Chairman on December 21, 2020; it was forwarded to the Lok Sabha Speaker the same day. Based on the recommendations of the SLC, Rs.1 crore was released as an advance to six Industrial units in March 2019 through the North East Development Finance Corporation before the mandatory pre-audit, the report states.

The Government informed the Parliamentary Committee that in the current financial year (2020-21), an allocation of Rs.100 crore has been made and “efforts are being made to speed up the process of disbursal of incentives, by revisiting and simplifying stages involved in processing of the claims.”

The Government’s ‘Action Taken Report’ was complying to a recommendation of the Parliamentary Committee in its 225 Report, where it was stated: “The Committee is displeased to note that no fund has been sanctioned under NEIDS and respective State Level Committees of NEIDS have not recommended release of funds to any company. The Committee therefore recommends that a strategy should be chalked out to implement the programme/action plan to boost integrated and balanced industrialisation in NER and to promote employment in the North East States.”

o date, 104 industrial units have been registered by the Empowered Committee based on the recommendations of State Governments under NEIDS, 2017. 

Official reports, however, show that 31,471 industrial units were set up in the region under NEIIPP 2007with an investment of Rs.19,097 crore, generating employment for 2,81,602 people between April 2007 and March 2017. In all, Rs.3000 crore was released to the northeastern States under the NIIPP.

The NEIDS guidelines require all eligible industrial units to register with the Department for Promotion of Industry & Internal Trade, and submit applications along with detailed project reports. Units should start commercial production within 18 months from registration and thereafter file their claims within one year from their date of commercial production under the Central Capital Investment Incentive for Access to Credit.

“After constant follow up and requisite hand holding by District industries Centres, only 67 claims that were able to start their commercial production could be registered on the web portal for processing,” the Parliamentary Panel report quoted the Government as saying.

Prior to notification of the NEIDS, the Modi Government suspended the NEIPP in 2014, prohibiting registration of new units under the old policy citing inadequate budgetary support against subsidy claims.

This article is closed for comments.
Please Email the Editor