Increasing number of sick units in Assam, industry bodies worried
Updated: Nov 01, 2013 02:55:45pm
Guwahati, Nov 1 (KNN) The increasing number of sick micro, small and medium enterprises (MSMEs) in the north-eastern region of India is a worrying fact for the state as it will add on to many problems with regard to unemployment, revenue generation, and economy of the state.
Frequent bandhs in the state, acute power shortage, high entry tax, lack of labourers are the main factors behind making the units sick and ultimately forcing them to wind up operations.
Expressing a serious concern over the issue, North Eastern Small Scale Industries Association (NESSIA)’s president Sailen Baruah said, “More than 1 lakh small industrial units in the north-eastern States are on the verge of being declared sick.”
“This is due to multiple problems such as, power shortage, frequent power tariff hikes, high entry tax, labour shortage, and frequent bandhs,” he added.
Baruah further said that the entry level tax in the state was almost 30 per cent higher than some of the neighbouring states. “The high entry tax makes our raw material more expensive, which in turn increases the cost of production. This makes our products less competitive in the domestic as well as international markets,” he added.
Till March 2012, 85,591 small industrial units across the north-eastern States had been declared sick, according to NESSIA.
Baruah said that not a single sick industrial unit in Assam had so far been “rehabilitated” by any bank or State financial institution.
“In his budget speech, Assam Chief Minister Tarun Gogoi declared a special package for the rehabilitation of sick micro and small units in the State but the fund for the purpose is yet to be released,” he added.
Also, no funds have yet been released for the rehabilitation of the sick units despite the announcement of a special package for such units by the Chief Minister.
The state government has some special incentives for the sick units like those declared sick by BIFR or as Assam Government Relief Undertaking who will be eligible for the special incentives for revival subject to certain conditions - there should be increase by not less than 25 per cent in the value of fixed capital assets in plant and machinery for revival of sick units; sick unit shall be entitled to exemption of 99 per cent of tax payable under the Assam Value Added Tax Act, 2003 and the Central Sales Tax Act, 1956 for period of 3 years subject to maximum of 100 per cent of additional investment made for rehabilitation.
The ceiling amount of subsidy and or the period of validity for tax concessions under this policy will be relaxable up to 50 per cent on case to case basis to be decided by the High Power Committee.
NESSIA has also batted for a single window clearance system to facilitate setting up small industries worth below Rs 25 lakh in the region.
NESSIA president, also spoke about the lack of skilled labourers in the region.
“The government is giving rice to the villagers at the cost of Rs 3, other food items are also cheaper for them; also they are paid so much more through MGNREGA scheme, so no villagers want to come and work in the small and private industries. They want to sit at home and not make an effort to earn,” he added.
Currently, there are 29367 registered small scale units in the State with an investment of Rs 106807.84 lakh in plant and machinery. (KNN/SD)
Frequent bandhs in the state, acute power shortage, high entry tax, lack of labourers are the main factors behind making the units sick and ultimately forcing them to wind up operations.
Expressing a serious concern over the issue, North Eastern Small Scale Industries Association (NESSIA)’s president Sailen Baruah said, “More than 1 lakh small industrial units in the north-eastern States are on the verge of being declared sick.”
“This is due to multiple problems such as, power shortage, frequent power tariff hikes, high entry tax, labour shortage, and frequent bandhs,” he added.
Baruah further said that the entry level tax in the state was almost 30 per cent higher than some of the neighbouring states. “The high entry tax makes our raw material more expensive, which in turn increases the cost of production. This makes our products less competitive in the domestic as well as international markets,” he added.
Till March 2012, 85,591 small industrial units across the north-eastern States had been declared sick, according to NESSIA.
Baruah said that not a single sick industrial unit in Assam had so far been “rehabilitated” by any bank or State financial institution.
“In his budget speech, Assam Chief Minister Tarun Gogoi declared a special package for the rehabilitation of sick micro and small units in the State but the fund for the purpose is yet to be released,” he added.
Also, no funds have yet been released for the rehabilitation of the sick units despite the announcement of a special package for such units by the Chief Minister.
The state government has some special incentives for the sick units like those declared sick by BIFR or as Assam Government Relief Undertaking who will be eligible for the special incentives for revival subject to certain conditions - there should be increase by not less than 25 per cent in the value of fixed capital assets in plant and machinery for revival of sick units; sick unit shall be entitled to exemption of 99 per cent of tax payable under the Assam Value Added Tax Act, 2003 and the Central Sales Tax Act, 1956 for period of 3 years subject to maximum of 100 per cent of additional investment made for rehabilitation.
The ceiling amount of subsidy and or the period of validity for tax concessions under this policy will be relaxable up to 50 per cent on case to case basis to be decided by the High Power Committee.
NESSIA has also batted for a single window clearance system to facilitate setting up small industries worth below Rs 25 lakh in the region.
NESSIA president, also spoke about the lack of skilled labourers in the region.
“The government is giving rice to the villagers at the cost of Rs 3, other food items are also cheaper for them; also they are paid so much more through MGNREGA scheme, so no villagers want to come and work in the small and private industries. They want to sit at home and not make an effort to earn,” he added.
Currently, there are 29367 registered small scale units in the State with an investment of Rs 106807.84 lakh in plant and machinery. (KNN/SD)
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