West Bengal places revival plan for sick/ closed units for consultation; allows disposal of land
Updated: Dec 31, 2015 01:37:46pm
Kolkata, Dec 31 (KNN) Taking the real lead in rehabilitation / revival of closed and sick manufacturing industries in the State, West Bengal Government has brought out the Draft West Bengal Industries Renewal Scheme 2015 and circulated for stakeholders consultation.
One of the significant moves under the new scheme is to allow sick / closed or weak manufacturing units to dispose land assets to plough back funds for rehabilitation / revival of the unit.
With spiralling land prices, the land assets of any enterprise is of considerable value and if allowed to be disposed, may bring in real cash for the resurgence of the unit. However, even after liberalisation of the economy post 2001, the revival schemes of the States were conservative towards disposal of lands and allowed only disposal of ‘surplus and idle land assets’ – something very nebular and difficult to identify.
The proposed new scheme of the W B Government specifies ‘disposal of such area of land of a sick, closed or weak industry…. as is required for the revival of the unit’.
Enormous swathe of land of closed industries are lying unused in ‘old industrial’ states like West Bengal and Maharashtra where large ‘Mills’ of Cotton, Steel and Jute are lying closed and fossilised. If the land is allowed to be disposed, many of such industries may resurge in modern avatars with lean set ups producing identical products at competitive rates and providing fresh employment opportunities.
With a judicious infusion of fresh funds from existing and new owners and financial institutions / banks, the proceedings from the land sale may come handy in extinguishing statutory liabilities to workers / state etc.
Another significant aspect of the new scheme of West Bengal is that it may be implemented with or without the approval of Board of Industrial and Financial Reconstruction (BIFR), if any financial institution or bank having interest in the unit forward a revival proposal. This is supposed to break the legal gridlock for units perishing under BIFR procedures.
The new scheme also offers usual sops like waival of pending electricity duties, deferment of sales tax arrears, exemption from Entry Tax etc. besides providing capital Investment subsidy varying between 15 and 25% depending upon the location of the unit.
The proposed scheme has also a provision for repeat support to a sick unit, subject to establishment of the revival case.
FISME the apex body of MSMEs in India is continuously advocating the Government for a framework where a ‘failed enterprise’ could be wound up at the earliest and the assets and liabilities are extinguished in the best interest of all concerned. While the new Bankruptcy Code, which is under consideration of the Parliament, is expected to address the issue in full, the proposed revival scheme of West Bengal may be the half way house and a model for other states to emulate.
Details of the scheme are available at the following links:
The draft scheme at:
http://fisme.org.in/document/WBIRS_Comparative_Statement.pdf
Comparison of the old W B Industries renewal scheme with the new scheme at
http://fisme.org.in/document/WBIRS_Notification.pdf
(KNN/ DB)
One of the significant moves under the new scheme is to allow sick / closed or weak manufacturing units to dispose land assets to plough back funds for rehabilitation / revival of the unit.
With spiralling land prices, the land assets of any enterprise is of considerable value and if allowed to be disposed, may bring in real cash for the resurgence of the unit. However, even after liberalisation of the economy post 2001, the revival schemes of the States were conservative towards disposal of lands and allowed only disposal of ‘surplus and idle land assets’ – something very nebular and difficult to identify.
The proposed new scheme of the W B Government specifies ‘disposal of such area of land of a sick, closed or weak industry…. as is required for the revival of the unit’.
Enormous swathe of land of closed industries are lying unused in ‘old industrial’ states like West Bengal and Maharashtra where large ‘Mills’ of Cotton, Steel and Jute are lying closed and fossilised. If the land is allowed to be disposed, many of such industries may resurge in modern avatars with lean set ups producing identical products at competitive rates and providing fresh employment opportunities.
With a judicious infusion of fresh funds from existing and new owners and financial institutions / banks, the proceedings from the land sale may come handy in extinguishing statutory liabilities to workers / state etc.
Another significant aspect of the new scheme of West Bengal is that it may be implemented with or without the approval of Board of Industrial and Financial Reconstruction (BIFR), if any financial institution or bank having interest in the unit forward a revival proposal. This is supposed to break the legal gridlock for units perishing under BIFR procedures.
The new scheme also offers usual sops like waival of pending electricity duties, deferment of sales tax arrears, exemption from Entry Tax etc. besides providing capital Investment subsidy varying between 15 and 25% depending upon the location of the unit.
The proposed scheme has also a provision for repeat support to a sick unit, subject to establishment of the revival case.
FISME the apex body of MSMEs in India is continuously advocating the Government for a framework where a ‘failed enterprise’ could be wound up at the earliest and the assets and liabilities are extinguished in the best interest of all concerned. While the new Bankruptcy Code, which is under consideration of the Parliament, is expected to address the issue in full, the proposed revival scheme of West Bengal may be the half way house and a model for other states to emulate.
Details of the scheme are available at the following links:
The draft scheme at:
http://fisme.org.in/document/WBIRS_Comparative_Statement.pdf
Comparison of the old W B Industries renewal scheme with the new scheme at
http://fisme.org.in/document/WBIRS_Notification.pdf
(KNN/ DB)
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