1. Project & Study Background

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264588/MCD/ISA/04/02 08 December 2010 P:\Noida\DMC\Projects\264588-NEDFi NEIIPP Impact Evaluation\Report\Final Report\NEIIPP Final Report 061210.doc

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Final Report- Interim Study to Assess and Evaluate the Impact of NEIIPP 2007

North-East India lies deep in the easternmost Himalayan hills of India. Connected to rest of India by merely

20 km of wide land (at Siliguri, West Bengal), the North-East India shares over 2,000 km of border with

Bhutan, China, Myanmar and Bangladesh. The North East Council (NEC) was constituted in 1971 as the

nodal agency for the economic and social development of the eight states, the North Eastern Development

Finance Corporation Limited (NEDFi) was incorporated in 1995 and the Ministry of Development of North-

Eastern Region (DONER) was set up in September 2001.

Blessed with biodiversity, huge hydro-energy potential, oil and gas, coal, limestone, forest wealth, fruits and

vegetables, flowers, herbs and aromatic plants, rare and rich flora and fauna, NE India has all the potential

to transform into a commercial hub. The area is a vibrant source of energy rich in oil, natural gas, coal,

limestone and India’s largest perennial water system, the River Brahmaputra and its tributaries, which can

be tapped for energy, irrigation and transportation.

North East India also offers huge opportunities in sectors of strategic importance like energy and

infrastructure; oil, natural gas and hydrocarbons; agro, food processing and horticulture; floriculture; IT and

ITeS; cement; defence, etc. Tourism is another potential high growth industry. Attractive incentive

structures should attract new domestic and foreign investments into the region, which, despite having

several advantages, has not witnessed the kind of fast-paced growth and development that it should have

experienced in the past years.

The Government of India (GoI) has approved a package of fiscal incentives and other concessions for the

North East Region namely the ‘North East Industrial and Investment Promotion Policy (NEIIPP), 2007,

effective from 1.4.2007. The North East Industrial Policy (NEIP) 1997 announced on 24.12.1997 covered

the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. Under

NEIIPP 2007, Sikkim has also been included.

Subsidies on transport, capital investment, interest on working capital, excise duty refund, income tax

exemptions etc. are available for industries in the region, in the new North East Industrial and Investment

Promotion Policy 2007 (NEIIPP). The incentives and subsidies available under NEIIPP 2007 are for units

that which commence operations or go in for substantial expansion within the 10 year period from the

notification of the policy. The incentives are available to all new units as well as those going in for

substantial expansion for all industries i.e. Manufacturing, Power Generation, Bio-technology and some

selected service sectors in the entire North-Eastern region.

A High Level/Advisory Committee was set up for monitoring of various schemes/measures under NEIIPP,

2007 including release and utilization of funds. Its responsibilities included Notification of various Schemes

under NEIIPP, 2007 in a timely manner, Monitoring of various Schemes/measures under NEIIPP, 2007

including release and utilisation of funds and overcoming the difficulties in implementation of NEIIPP, 2007,

which may arise from time to time.

It has been more than two years now that the NEIIPP was notified and hence there was a need to have an

evaluation to assess the impact of the policy on the North Eastern Region.

North Eastern Development Finance Corporation Ltd. (NEDFi), an ISO 9000 Company with an authorized

share capital of Rs 500 crores and with the objective for the development of the North Eastern Region by

providing credit and other support facilities to industry, infrastructure, agriculture and agro processing

sector, has engaged Mott MacDonald for undertaking an ‘Interim Study to Assess and Evaluate The

1. Project & Study Background

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Impact of the North East Industrial and Investment Promotion Policy (NEIIPP) 2007 in the Eight

States of North Eastern Region’ which has been sponsored by NEC, Shillong.

The contract between NEDFi and Mott MacDonald Private Limited was entered vide Agreement dated 10th

November 2009.

The study involved the Impact Assessment of the NEIIPP 2007 in all the eight states of the North-Eastern

Region. Our approach for the study was based mainly on primary interactions wherein our study team

visited the sampled districts of each of the eight states and collected information from various stakeholders.

During the course of the study, we covered a sample size of 20% of the districts in each state subject to a

minimum of two districts in each state i.e. atleast two districts per state were covered. One of the districts in

this sample was necessarily the state capital. We met up with the following stakeholders during the course

of the study:

Level of Contacts Stakeholders

Industry Commissioners

Directorate of Industry

Industrial Development Corporations

Department of Roads, Power Department, Water

Department

Industry Associations- FINER, ASSA etc.

State Level Contacts

Nationalised Banks

DICC

Industry Associations

Industry Units availing benefits under NEIP 1997 &

NEIIPP 2007

District Level Contacts

Visit to Industrial Infrastructure in the districts visited

The study team visited the Industrial Infrastructure available in the districts to assess the present status of

the same. There were Focus Group Discussions conducted at each State Capital having representation of

the relevant stakeholders for the study including the Directorate of Industry, Industry Associations,

Entrepreneurs, Lending Institutions etc (list of participants in all the FGDs have been attached as Appendix

K). The Primary Interactions included meeting with the Department of Industrial Policy and Promotion and

the Ministry of DONER at New Delhi.

Besides the primary interactions, extensive secondary research was undertaken to collect information on

the Policy and details related to it. The Secondary research also included collection of information on

policies that are relevant for the NER and information on industrialization in similar states.

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We have analysed the information related to the NEIIPP 2007, collected from the primary and secondary

sources, on the following framework:

• Impact on Industrialisation

• Performance Evaluation

• Effectiveness Evaluation

• Process Evaluation

The findings from the secondary research and primary survey have been covered in this report with one

chapter dedicated to each state. As per the requirements outlined by NEDFi in the Inception stage, the

socio-economic profile of each state has also been mapped out and is detailed in the Appendices. Based

on the findings from the data analysis, the report concludes an Action Plan detailing out the role, evaluation

indicators and timelines for each stakeholder.

The Transport Subsidy scheme was not under the purview of this report, because a separate study is being

carried out by the Department of Industrial Policy and Promotion for the Evaluation of the Transport

Subsidy Scheme. The report was not finalised till the time this study was awarded to Mott MacDonald.

Hence, to avoid overlapping of the objectives, the issues related to Transport Subsidy were not considered

under the purview of this study.

1. Data from Kokrajhar District in Assam and East Khasi Hills District in Meghalaya was not made

available to the study team after visit and numerous follow-up. Our study team met Mr. U. Muktieh,

General Manger DIC, East Khasi Hills twice but he did not give any data. Even after repeated

follow-up, no data was provided.

2. Data on investments under NEIP 1997 was not available for all the districts

3. Some of the districts have witnessed industrialisation post NEIIPP only, hence data for comparison

of industrialisation not available for the same.

4. Due to floods, files containing the NEIP 1997 documents have been damaged in Cachar District in

Assam. Hence, no data on NEIP 1997 was available with the DICC.

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In this section we have tried to compare the Industrialisation in NER vis-à-vis the rest of the country. For

this we have considered the list of Investment Intentions as received by DIPP during 2008-09 and 2009-10.

We have ranked the states according to the proposed Investment and the Number of Proposals received.

The rankings are presented in the Tables 2.1 to 2.4 .

Table 2.1: State Ranking by Amount of Investment Intention in 2008-09

Rank State Amount of Investment (Crores)

1. Madhya Pradesh 196398

2. Chhattishgarh 184089

3. Andhra Pradesh 133448

4. Orissa 130433

5. West Bengal 93624

6. Gujrat 92796

7. Jharkhand 92642

8. Maharashtra 88429

9. Karnataka 45130

10. Rajasthan 18056

11. Tamilnadu 15523

12. Uttar Pradesh 13153

13. Bihar 9267

14. Assam 8082

15. Uttarakhand 6864

16. Haryana 6225

17. Punjab 3961

18. Himachal Pradesh 1943

19. Dadra & N Haveli 1790

20. Jammu & Kashmir 1260

21. Goa 1230

22. Meghalaya 1127

23. Puducherry 992

24. Sikkim 580

25. Daman & Diu 327

26. Kerala 237

27. Arunachal Pradesh 147

28. Andaman & Nicobar 123

29. Delhi 76

30. Tripura 68

31. Nagaland 0

32. Mizoram 0

33. Manipur 0

2. Industrial Scenario in NER & Relevant Policies for Industrialisation

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34. Lakshadweep 0

35. Chandigarh 0 All India 1148020

Source: NEDFi

Table 2.2: State Ranking by Amount of Investment Intention in 2009-10


1. Orissa 291352


3. Gujrat 174327


5. Karnataka 109206


7. Tamilnadu 73962

8. Maharashtra 65810

9. West Bengal 29450

10. Rajasthan 19123

11. Jharkhand 18826

12. Bihar 13889

13. Uttarakhand 12276

14. Punjab 11204



17. Assam 2655


19. Haryana 2022

20. Meghalaya 1749


22. Goa 877


24. Daman & Diu 829

25. Puducherry 698

26. Delhi 271

27. Sikkim 133

28. Tripura 83

29. Kerala 70


31. Manipur NA

32. Lakshadweep 0

33. Chandigarh

34. Mizoram 0

35. Nagaland 0

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All India 1267749

Source: NEDFi

As can be seen from the tables above, out of the 8 NER States only 5 states had some Investment

Intentions, both in 2008-09 and 2009-10. Also amongst the 5, Assam is the state with the maximum

amount of investment intention. However, this investment was only 0.7% of the total investment proposed

in the entire country and about 4% of the Investment Intention in Madhya Pradesh (which ranks no. 1 in

terms of investment proposed) in 2008-09. In 2009-10, even though the total Investment Intention in the

country has gone up, it reduced for Assam (0.2% of the investment proposed in entire country and just

0.9% of the investment intention of the No.1 ranked state). Thus, it can be seen that Industrialisation in

NER is not progressing at the same pace as in the rest of the country and needs to be taken up in a more

methodical and organised manner.

Table 2.3: State Ranking by Number of Proposals in 2008-09

Rank State Number of Proposals

1. Maharashtra 678


3. Gujrat 382



6. Tamilnadu 263

7. West Bengal 216

8. Karnataka 215


10. Uttarakhand 148

11. Orissa 125

12. Haryana 117

13. Rajasthan 95

14. Punjab 81

15. Jharkhand 55


17. Goa 45

18. Assam 36



21. Daman & Diu 28

22. Bihar 27

23. Puducherry 24

24. Delhi 17

25. Meghalaya 14

26. Sikkim 12

27. Kerala 12

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29. Tripura 3


31. Nagaland 0

32. Mizoram 0

33. Manipur 0

34. Lakshadweep 0

35. Chandigarh 0 All India 3910

Source: NEDFi

Table 2.4: State Ranking by Number of Proposals in 2009-10


1. Maharashtra 607


3. Gujrat 391


5. Uttarakhand 307

6. Tamilnadu 227

7. West Bengal 218



10. Karnataka 162

11. Orissa 130

12. Rajasthan 95

13. Haryana 84

14. Punjab 83


16. Jharkhand 56

17. Assam 44


19. Daman & Diu 41

20. Bihar 37

21. Goa 36


23. Delhi 18

24. Puducherry 14

25. Meghalaya 12

26. Kerala 8

27. Sikkim 8



30. Manipur 1

31. Tripura 1

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32. Chandrigarh 0

33. Lakshadweep 0

34. Mizoram 0

35. Nagaland 0 All India 3781

Source: NEDFi

If we analyse the data in Tables 2.3 & 2.4 above, it can be seen that the total number of proposals received

in 2009-10 has gone down from those received in 2008-09 for the entire country and it follows the same

trend in the NER. Except for Assam, where there is a marginal increase (36 in 2008-09 and 44 in 2009-10)

the rest of the states have shown a decrease in the number of proposals received. Again Assam has the

largest number of proposals received in the entire NER but if we compare it with the rest of the country it is

very less (0.9% in 2008-09 & 1.17% in 2009-10). Hence, it is once again seen that industrially NER needs

a lot of development.

From the visit to the North Eastern states and after interactions with the various stakeholders, it came out

that food processing industry has a lot of potential in the region and can come up in a big way if promoted

in a planned manner.

Hence, in this section we have covered the policies and incentives offered by the Ministry of Food

Processing that are relevant to the North Eastern Region.

There is no specific policy on taxes and tariffs that is in any way affecting the scope and incentives of the

NEIIPP 2007.

The Ministry of Food Processing Industries (MOFPI) is the main central agency of the Government of India

(GoI) responsible for developing a strong and vibrant food processing sector; with a view to create

increased job opportunities in rural areas, enable the farmers to reap benefit from modern technology,

create surplus for exports and stimulating demand for processed food. The following sub sectors are

covered under MOFPI.

• Fruits and vegetable processing industry

• Food grain milling industry • Dairy products • Processing of poultry and eggs, meat and meat products • Fish processing • Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery (including cocoa

processing and chocolate), malt extract, protein isolate, high protein food, weaning food and extrude/other ready to eat food products.

• Beer, including non-alcoholic beer • Alcoholic drinks from non-molasses base • Aerated waters / soft drinks and other processed foods

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• Specialized packaging for food processing industries • Technical assistance and advice to food processing industry

The following are the Fiscal Incentives for Food Processing Sector as per the MOFPI.

1) Excise Duty Rates

− Excise duty on condensed milk, ice cream, preparations of meat, fish and poultry, pectins and Pectates, used as a gelling agent in jams and jellies, pasta and yeast is abolished which was 16% earlier. − Excise Duty on biscuits whose retail sale price does not exceed Rs.100 per kg reduced from 8% to 0% − Excise on ready to eat packaged food reduced from 16% to 8%, which is 50% reduction − Excise Duty reduced from 8% to 0% on all kinds of food mixes including instant food mixes − Excise duty on aerated drinks has been reduced from 24% to 16% − Excise duty on meat, fish and poultry products reduced from 16% to 8%. − Excise Duty on Reefer Vans (refrigerated motor vehicles) reduced from 16% to 8%. − Excise duty on unbranded edible preparations of oil increased from nil to 8%.

2) Customs duty rates

− Customs duty on food processing machinery and their parts is being reduced from 7.5% to 5% a, dairy machineries are completely exempted from Central Excise Duty. − Custom duty on Packaging Machine to be reduced from 15% to 5%. − Customs Duty on refrigerated vans reduced from 20% to 10%.

3) Income tax relief

− Income Tax rebate is allowed, 100% of profits for 5 years and 25% of profits for the next 5 years, for new industries to process, preserve and package fruits and vegetables.

The following section provides the details of the different schemes and the pattern of assistance for the

same by MOFPI under the Eleventh Five Year Plan from 2007-12. The schemes so offered have focus on

North Eastern States with increased financial assistance for these areas. It can be seen that the focus of

these schemes is to reduce the wastage in food processing, set up medium and large scale industries,

enable quality accreditation of international level to all types of units and improve the quality of human

resources etc.

2.2.3.1 Scheme for Infrastructure Development

Setting up of Mega Food Park

• One time capital grant of 50% of the project cost (excluding land cost) subject to a maximum of Rs.

50 Crores in general areas.

• One time capital grant of 75% of the project cost (excluding land cost) subject to a maximum of Rs.

50 Crores in difficult and hilly areas i.e. North East Region including Sikkim, J&K, Himachal Pradesh,

Uttarakhand and ITDP notified areas of the States.

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Cold Chain Infrastructure

• Grant-in-aid of 50% the total cost of plant and machinery and technical civil works in General areas subject to a maximum of Rs 10 Crores.

• Grant-in-aid of 75% the total cost of plant and machinery and technical civil works for NE region and difficult areas (North East including Sikkim and J&K, Himachal Pradesh and Uttarakhand) subject to a maximum of Rs 10 Crores.

Modernization of Abattoirs

• Grant of 50% of cost of plant and machinery and Technical Civil Work subject to a maximum of Rs 15 Crores in general areas per abattoir

• Grant of 75% of cost of plant and machinery and Technical Civil Work subject to a maximum of Rs 15 Crores in difficult areas (NE state including Sikkim, J&K, Himachal Pradesh,Uttrakhand and ITDP notified areas of the States ) per abattoir

2.2.3.2 Scheme for Technology Up Gradation, Establishment And Modernization Of Food

Processing Industries

Grant subject to 25% of the plant & machinery and technical civil work subject to a maximum of Rs. 50 lakh

in General Areas and 33.33% upto Rs. 75 lakh in Difficult Areas (North East including Sikkim and J&K,

Himachal Pradesh and Uttarakhand).

2.2.3.3 Scheme for Quality Assurance, Codex Standards, Research & Development and Other

Promotional Activities

Component – 1: Total Quality Management

Grant in aid of 50% of the total cost of the project towards implementation of Total Quality

Management including ISO 9000, ISO 14000, HACCP, GMP & GHP in general areas and 75% in

difficult areas(North East including Sikkim and J&K, Himachal Pradesh and Uttarakhand). The

absolute ceiling will remain Rs 10.00 lakhs and Rs 15.00 lakhs respectively for Central/State

Government Organisations, IITs & Universities.

Grant in aid of 33% subject to a maximum of Rs 10.00 lakhs for General Areas and 50% to a

maximum of Rs 15.00 lakhs for Difficult Areas (North East including Sikkim and J&K, Himachal

Pradesh and Uttarakhand) for All other Implementing Agencies

Component – 2: Promotion of Quality Assurance/Safety Concept

Grant in aid of 50% of the total cost of the project subject to maximum Rs 3.00 lakhs for

Central/State Government Organisations, IITs & Universities

Grant in aid of 33% subject to a maximum of Rs 3 lakhs for General Areas and 50% subject to a

maximum of Rs 3 lakhs for Difficult Areas (North East including Sikkim and J&K, Himachal Pradesh

and Uttarakhand) for All other Implementing Agencies

Component – 3: Bar Coding

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Grant in aid of 50% of the Registration fees to be paid to EAN - India and 50% of cost of the capital

equipment subject to maximum Rs 3.00 lakhs. The organisations intending to avail the financial

assistance for bar coding, have to get registered with EAN - India before applying to Ministry. This

is for Central/State Government Organisations , IITs & Universities

Grant in aid of 50% of the Registration fees to be paid to EAN - India and 33% subject to a

maximum of Rs 3 lakhs for General Areas and 50% subject to a maximum of Rs 3 lakhs for Difficult

Areas (North East including Sikkim and J&K, Himachal Pradesh and Uttarakhand). The

organisations intending to avail the financial assistance for bar coding, have to get registered with

EAN - India before applying to Ministry. This is for all other Implementing Agencies.

Component – 4: Strengthening of the Codex Cell

Grant in aid of 100% upto Rs 10.00 lakhs in general areas & Rs 15.0 lakhs in difficult areas for

Central/State Government Organisations, National Research Institutions & leading Agricultural

Universities, IITs & Universities who can serve as centres of excellence around problem areas of

Codex Standards.

Grant in aid of 33% subject to a maximum of Rs 10 lakhs for General Areas & 50% subject to a

maximum of Rs 15 lakhs for Difficult Areas (North East including Sikkim and J&K, Himachal


Component – 5: Setting Up Of Quality Control Laboratory

Grant in aid Assistance limited to the entire cost of capital equipment required for setting up of such

laboratories for Central/State Government Organisations, IITs and Universities

Grant in aid of 33% of the cost of capital equipment required for setting up of such laboratories for

General Areas and 50 % for Difficult Areas (North East including Sikkim and J&K, Himachal


Component – 6: Research & Development in Processed Food Sector

Grant in aid of 100% of the capital cost for Central/State Government Organisations, IITs and

Universities

Grant in aid of 33% of the capital cost for General Areas and 50% of the capital cost for Difficult

Areas (North East including Sikkim and J&K, Himachal Pradesh and Uttarakhand) for All other

Implementing Agencies.

2.2.3.4 Setting Up/ Up Gradation of Quality Control/ Food Testing Laboratory

Central/State Government and its organizations /Universities (including deemed universities) will

be eligible for grant-in-aid of entire cost of laboratory equipments required for labs. In addition, they

would also be eligible for 25% of the cost of technical civil works to house the equipments and

• Grant in aid of 100% upto Rs 10.00 lakhs in general areas & Rs 15.0 lakhs in difficult areas for Central/State Government Organisations, National Research Institutions & leading Agricultural Universities, IITs & Universities who can serve as centres of excellence around problem areas of Codex Standards.

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furniture and the fixtures associated with the equipments for general areas and 33% for difficult

areas (North East including Sikkim and J&K, Himachal Pradesh and Uttarakhand).

All other implementing agencies / private sector organisations will be eligible for grant-in-aid of 50%

of cost of laboratory equipments and 25% of the cost of technical civil works to house the

equipments and furniture and fixtures associated with the equipments for general areas and 70%

of cost of lab equipment and 33% of technical civil works for difficult areas (North East including

Sikkim and J&K, Himachal Pradesh and Uttarakhand).

2.2.3.5 HACCP / ISO 14000 / ISO 22000 / GHP / GMP QUALITY / Safety Management

All Implementing Agencies i.e. Central/ State Govt. Organisations, IITs, Universities and Private Sector will

be eligible for reimbursement of 50% of cost of consultant fee, fee charged by Certification Agency, plant

and machinery, technical civil works, and other expenditure towards implementation of Total Quality

Management System including ISO14000, ISO22000, HACCP, GMP and GHP in general areas subject to

maximum limit of Rs. 15 lakh and 75% in difficult areas (North East including Sikkim and J&K, Himachal

Pradesh and Uttarakhand) subject to a maximum of Rs. 20 lakhs.

Thus it can be seen that any food processing industry set up in North East would be able to avail the incentives both under the NEIIPP and MOFPI schemes.

The policy period for NEIIPP is for 10 years from 2007 to 2017 while the above MOFPI schemes are for 5 years from 2007-12. It is also unclear whether these schemes would be continued or discontinued by MOFPI in the next plan period.

Thus for the tiny, micro and small scale sector, the State Government can give the State Industrial Policy benefits along with the MOFPI benefits which are not covered under the State Policy.

For units registered under NEIIPP, the following can be adopted. In order that the North East and

associated industries do not lose out on various other schemes / incentives, NEDFi / any other NE body

can function as a Single Widow Agency. This body can liaison with, submit the application for the schemes

and incentives for associated Ministries which are not under NEIIPP and obtain the subsidies for the

industries concerned. The DIC can check and forward these claims to the DI which would be submitted to

the SLC and the concerned NE body. After clearance by SLC, the concerned NE body can submit these

applications to the concerned Ministries and obtain the grants and route it through NEDFi for disbursement

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This section details the industrialisation in another Indian state having similar geographical terrain,

Himachal Pradesh wherein Special Investment Package was announced and notified in 2003.During the

last few years, the industrialization in the State of Himachal Pradesh has made significant progress. As of

now, there are about 34835 (34460 Small Scale and 375 Medium & Large Scale) Industrial Units with an

investment of about Rs. 6432.40 crores and employment of about 2.13 lakhs persons registered with the

Department of Industries.

The districtwise details of registered industrial units are as under:

Table 3.1: Districtwise units in Small, Medium & Large Sector in HP (upto 31st March 2008)

District No. of Units Investment (Rs. in Lakhs)

Employment

Bilaspur 2156 42265.76 9015

Chamba 1696 2702.83 5910

Hamirpur 2617 5316.04 9505

Kangra 8545 22398.71 38065

Kullu 2338 6004.96 11973

Kinnaur 544 428.22 1695

Lahaul& Spiti 563 285.72 1530

Mandi 3538 8836.66 14558

Shimla 3171 9530.96 12413

Solan 3930 425592.5 70837

Sirmour 2830 90012.22 22463

Una 2907 29865.98 15821

Total 34835 643240.56 213785

Source: Department of Industries, Himachal Pradesh

After the notification of Special Package in January 2003, the Department has approved 926 new

investment proposals and 79 expansion proposals in Medium & Large Scale Sector and 9772 new

investment proposals and 237 expansion proposals in SSI sector. Up to 31st March 2008, there was a

combined envisaged investment of Rs. 29,379.76 crores and employment potential of 3,72,316 persons.

The details are as under:

Table 3.2: Units, Investment & Employment in Himachal Pradesh

Category Number of Units Investment (Rs. in crores)

Proposed Employment

New Medium/Large Scale Projects 926 22188.47 142089

Expansion of existing units of medium and large scale sector

79 860.61 3832

New Small Scale Units 9772 6256.83 223032

Expansion of existing units of small scale sector

237 73.85 3363

Total 10698 29379.76 372316

Source: Department of Industries, HP

3. Industrialisation in Himachal Pradesh

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The yearwise details of the approved/registered New Medium & Large Scale Industrial Projects from 7th

March 2003 to 31st March 2008 are as under:

Table 3.3: Yearwise New Approved/Registered Unitsin Medium and Large Scale

Year Number of Units Investment (Rs. in Crores) Proposed Employment

2003-04 284 3946.20 44491

2004-05 225 3355.44 28208

2005-06 244 5411.30 37390

2006-07 145 6728.80 27004

2007-08 28 2746.73 4996

TOTAL 926 22188.47 142089

In addition 79 proposals of substantial expansion in medium & Large Scale industrial Sector involving an

investment of Rs. 860.61 crores and employment potential of 3832 persons were also approved. The

details of which is as under:

Table 3.4: Yearwise Expansions in Medium and Large Scale

Year Number of Units Investment (Rs. in Crores) Proposed Employment

2003-04 15 21.18 384

2004-05 37 356.21 1735

2005-06 15 277.4 1158

2006-07 9 181.3 429

2007-08 3 24.52 126

TOTAL 79 860.61 3832

After the notification of Special Package in January 2003, out of total projects approved including

expansion proposals, 3775 new industrial units and 202 expansions in the SSI sector and 173 new units

and 73 expansions in Medium and Large Scale sector have been set-up in the State with an actual total

investment of about Rs. 3597.86 crores generating employment of 54,733 persons. The sector wise details

are as under:

Table 3.5: Units Set up after 2003

Employment Category Number of Units

Investment (Rs.in

Crores) HImachali Non-Himachali Total

New Medium/Large Scale Projects 173 1849.43 10883 3265 14148

Expansion of Existing Units in Medium & large Scale

73 326.28 1600 532 2132

New Small Scale Projects 3775 1392.27 30009 6873 36882

Expansion of Existing Units of Small Scale

202 29.88 1239 332 1571

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With a view to ensure expeditious clearances from the respective Departments for setting up of new

industrial units, a State Level Single Window Clearance and Monitoring Authority under the Chairmanship

of Hon’ble Chief Minister has been constituted to clear projects and ensure speedy approval from various

Departments or Agencies. The Authority has so far held 29 meetings and cleared 678 projects with an

investment of Rs. 17987.55 crores and employment potential to about 100230 persons.

Development of industrial infrastructure has been one of the priorities of the State Government. In order to

provide infrastructural facilities to the entrepreneurs, 38 Industrial Areas and 15 Industrial Estates have

been developed in the State.

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Assam is a North-Eastern state of India located south of the eastern

Himalayas. Assam comprises the Brahmaputra and the Barak river

valleys along with the Karbi Anglong and the North Cachar Hills with an

area of 30,285 square miles (78,438 km²). It is is the gateway to the

North-eastern states and borders Arunachal Pradesh in the east, West

Bengal, Meghalaya, Bangladesh in the west, Arunachal Pradesh, Bhutan

in the north and Nagaland, Manipur, Mizoram, Meghalaya, Tripura in the

south. Except for a narrow corridor running through the foothills of the

Himalayas that connects the state with West Bengal, Assam is almost

entirely isolated from India.

Assam is divided into 27 administrative districts which are further sub-

divided into 49 “Sub-divisions” or Mohkuma. Every district is administered

from a district head quarter with the office of the District Collector, District Magistrate, office of the District

Panchayat and usually with a district court. Assam's economy is based on agriculture and oil. Assam

produces a significant part of the total tea production of the world. Assam produces more than half of

India's petroleum.

In this chapter we have covered the Industrial Profile of Assam including the Industrial Policy, Industrial and

Support Infrastructure and the Impact of the NEIIPP on the State. The Socio-Economic Profile of Assam

has been attached as Appendix A.

Assam has the Industrial Policy of 2008 is place and it is effective from 1st Oct.2009 to 30

th Sep. 2013. The

Incentives and Benefits available under the Policy have been segregated into:

1. Fiscal Incentives

2. Tax Incentives

3. Special Incentives for Mega Projects

4. Special Incentives for Revival of Sick Units

The Incentives available are as under:

Incentive Category Subsidy Provided

Fiscal Incentives

Interest Subsidy on Term Loan 30% of Interest subsidy to Micro industrial units for a period of 5 years from the date of commercial production subject to a ceiling of Rs. 1.00 lakhs per unit/year

Power Subsidy Subsidy on power tariff paid by units on actual consumption of power for a period of 5 years from the date of commercial production as below:

-30% on connected loads upto 1MW subject to a max. of Rs. 10 Lakhs per annum

-25% on connected loads above 1MW subject to a max. of Rs.25 Lakhs per annum

Subsidy on Quality Certification 50% of the fees payable for obtaining certifications and technical know-how subject

4. Assam

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Incentive Category Subsidy Provided

to a ceiling of Rs. 1 Lakh per unit

Power Line Drawal Subsidy 25% of the cost payable to State Power Distribution Company for drawal of power line to the premises of the unit including the cost of transformer will be subsidized to Micro and Small industrial units subject to a ceiling of Rs. 10 lakhs per unit.

Tax Incentives

Exemption of 99% of the VAT and Sales Tax payable for new and expanding units subject to the limits as under:

New Units-

• Micro Units: Seven years subject to a max of 200% of Fixed Capital Investment

• Small Units: Seven years subject to a max of 150% of Fixed Capital Investment

• Medium/Large Units: Seven years subject to a max of 100% of Fixed Capital Investment

VAT Exemption

Units going in for Substantial Expansion-

• Micro Units: Seven years subject to a max of 150% of Fixed Capital Investment

• Small Units: Seven years subject to a max of 100% of Fixed Capital Investment

• Medium/Large Units: Seven years subject to a max of 90% of Fixed Capital Investment

Stamp Duty & Registration Fee Exemption

100% reimbursement of stamp duty and registration fees will be given against submission of equivalent Bank Guarantee from a nationalized bank that the Industrial Park/ Estate will be set up within a period of 3 years

Special Incentives for Mega Projects

Projects with large capital investment with a minimum of Rs. 100 crores or generating a minimum of 1000 regular employment and having potential for development of ancillary industries based on their products will be given Mega Project status.

All incentives including priority land allotment, the ceiling amount of subsidy and or the period of validity of Tax concessions under the policy will be relaxable on case to case basis to be decided by a High Power Committee specially constituted by the Government for the purpose.

Special Incentives for Revival of Sick Units

• Exemption of 99% 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% of additional investment made for rehabilitation.

• Ceiling amount of subsidy and/or the period of validity for tax concessions under this policy will be relaxable up to 50% on case to case basis to be decided by the High Power Committee.

Source: Assam Industrial Policy 2008

Besides these incentives, there are facilities in the form of Market Linkages, Preferential Purchase,

Incentives for Participation in Trade Fairs, Preference to Women and Physically Challenged Entrepreneurs

and Procedural Simplifications in registration and other approvals required.

Assam also has well defined committees for facilitation and help in setting up of units under the various

categories vis micro, small scale and medium and large.

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The provision of Industrial Infrastructure in Assam is managed by two State Government Institutions

namely:

4.3.1.1 Assam Industrial Development Corporation Limited (AIDC)

AIDC has set up many Industrial Estates, Industrial Growth Centres, Integrated Infrastructure

Development Centres and other industrial infrastructure. Details of some of the major projects of AIDC

are either developed or being developed are given below.

a) Plastic SEZ: A plastic SEZ is proposed on 360 acres of land in the Tinsukia District. It is located at

about 4 km from Tinsukia town and the techno-economic pre-feasibility for the project has been

completed by IL&FS. The estimated project cost is Rs 89 Crores.

b) Plastic Corridor: A Plastic Corridor is proposed to be set up in the lower part of Assam.

c) Software Technology Park: This park is under operation near the Guwahati International Airport,

Guwahati.

d) Export Promotion Industrial Park: There is an Export Promotion Industrial Park (EPIP)

operational at Amingaon near Guwahati, spread over an area of 68.10 acres. 55 developed plots

and 4 industrial sheds have been allotted to industries. The park has units in diverse areas which

are mainly export-oriented.

e) Food Processing Park: A food processing park is under implementation at Chaygaon, 40 km from

Guwahati.

f) Agri-Export Zone for Ginger: An agri-export zone for ginger is under implementation in the state.

Assam has a major share in the ginger production of the country.

g) Banana Export Development Centre: Assam grows various types of banana and to promote

commercial cultivation of banana, a Banana Export Development Centre is being proposed in the

State.

h) Border Trade Centre: To facilitate trade with Bangladesh, a Border Trade Centre is coming up at

Mankachar in Dhubri.

i) Industrial Growth Centres and Integrated Infrastructure Development Centres: There are 2

Industrial Growth Centres (IGC) and 7 Integrated Infrastructure Development Centres (IIDC) set up

by AIDC in the state. Details are given in the table below

Table 4.1: List of IGCs and IIDCs set up by AIDC in Assam

Industrial Growth Centres located in Assam Area (Acres)

1. Balipara 400

2. Matia 700

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Industrial Growth Centres located in Assam Area (Acres)

Integrated Infrastructure Development Centres located in

1. Dalgaon 35

2. Demow 111

3. Bhomoraguri 41

4. Malinibeel 90

5. Dahudi 33

6. Silapathar 35

7.. Titabor 40

Sources: Brochures of AIDC & AIIDC, NER Databank, Official Website of Government of Assam

The IGCs and IIDCs have good connectivity, dedicated power supply, adequate water supply,

communication facilities and central effluent treatment plants.

4.3.1.2 Assam Industrial Infrastructure Development Corporation

The Assam Industrial Infrastructure Development Corporation (AIIDC) was set-up as a Government

Corporation in 1991 under the AIIDC Act, 1990. Over the years, 9 Industrial Estates have been given to

AIIDC, details of which are given below.

a) 4 Estates in Greater Guwahati Region namely Bamunimaidan, Industrial Area Kalapahar, Mini

Industrial Estate Kalpahar and Rani Industrial Area.

b) 5 Estates at Tinsukia, Jorhat, Sibsagar, Bongaigaon and Dolabari in Tezpur.

c) AIIDC is the implementing agency for the Border Trade Centre at Sutarkandi in Southern Assam to

facilitate trade with Bangladesh.

d) AIIDC has been assigned the responsibility of setting up a Trade Facilitation Centre at Jagun and a

Food Processing Park at Ulupathar, both in Tinsukia District.

e) AIIDC manages some IGCs and IIDCs as given in the table below:

Table 4.2: List of IGCs and IIDCs managed by AIIDC in Assam

Industrial Growth Centres located in Area (in Acres)

1. Chaygaon 135

2. Patgaon, HMT Campus 5

Integrated Infrastructure Development Centres located in

1. Rangiya 40

2. Banderdewa 30

3. Parbotipur Not available

4. Sarfangundi (Kokrajhar) Not available

Sources: Brochures of AIDC & AIIDC, NER Databank, Official Website of Government of Assam

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4.3.2.1 Power

Power is one of the most crucial infrastructural facilities required for industrial and consequently the socio-

economic development of a region. Growth in population, urbanization and industrial developments in

Assam would definitely result in an increase in the demand for power and water.

Currently, the Assam State Electricity Board (ASEB) is responsible for the electricity system in Assam.

There are five Government companies responsible for generation and transmission of power in Assam.

These include the Assam Power Generation Corporation Limited (GENCO), the Assam Electricity Grid

Corporation Limited (TRANSCO), Upper Assam Electricity Distribution Limited (UA-DISCOM), Central

Assam Electricity Distribution Limited (CA-DISCOM) and the Lower Assam Electricity Distribution Limited

(LA-DISCOM). The installed capacity of power generating plants in Assam was 574 MW in the year 2005-

06. In 2006-07, the installed capacity came down to 415.5 MW due to inclusion of 240 MW installed

capacity of Bongaigaon Thermal Power Station as NTPC is developing a new 750 MW coal based thermal

power plant by replacing two units of 100 MW Karbi Langpi Hydro-electric project. However, the gross

power generation in the State of Assam increased from 711 MU in 2003-04 to 868 MU in 2006-07, with an

average annual growth rate of around 7%. The gross power generation should increase further in view of

the proposed industrial developments in the State. The per capita power availability in the State has

increased from 112 kWh in 2004-05 to 116 kWh in 2006-07. Another cause of concern is that the shortage

in power availability was 679.1 MU (16 per cent shortage) and the peak demand-supply gap was around

140 MW (18 per cent shortage) in the year 2005-06. It is thus clear that that this power shortage may

increase further with industrial developments if the capacity augmentation of existing power plants and

construction of new ones are not considered.

4.3.2.2 Roads

Assam is considered to be the gateway to the entire North Eastern region of the country. The state has

over 2754 km of National Highways, which is the highest among all the North Eastern States. Assam

accounts for around 42 per cent of the total length of National Highways in the North Eastern Region. The

major National Highways (NHs) in the state include:

• NH 31: Connecting the State Capital Dispur with the rest of the country

• NH 36 & NH 39: Connecting Assam with Dimapur in Nagaland

• NH 37: Connecting the State Capital of Dispur to Tinsukia District, passing through Jorhat, Sibsagar

and Dibrugarh. The Assam Gas Cracker Project site at Lepetkata lies on the NH 37.

• NH 38: Connecting Makum with Lekhapani

• NH 44: Connecting Ratacherra with Churaibari

• NH 51: Connecting Paikan with bajengdoba

• NH 52: Linking Tezpur to the North Eastern Districts of Dhemaji and North Lakhimpur

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• NH 53: Connecting Jirium to Badarpur

• NH 54: Connecting the southern parts of Assam including Silchar and Halflong

• NH 61: Connecting Janji with the Assam / Nagaland Border

• NH 62: Connecting Dudhnoi with Dainadubi

• NH 151: Connecting Karimganj with Sutarkandi

• NH 152: Connecting Patacharkuchi with the Indo/Bhutan Border

• NH 153: Connecting Lekhapani with Jairampur

• NH 154: Connecting Dhaleswari with Bhairabi

The National Highways in Assam are under the jurisdiction of National Highways Authority of India (NHAI),

Public Works Department (PWD) and the Border Roads Organisation (BRO). According to the PWD,

Assam, the length of NHs under the three organizations is 728 km, 1234 km and 785 km respectively. In

addition, around 7 km of NH 152 is under the Forest Department. Assam also has 2819 km of State

Highways and 33% of the total road length in Assam has been surfaced as of 2006-07.

The National Highways Development Project (NHDP) has been launched by the National Highways

Authority of India (NHAI) in order to develop world-class highway infrastructure in the country. The highway

stretches included in this project would be 4-laned (with divider and adequate ROW for future widening),

along with provision of road-side amenities & facilities. The highway stretches in Assam which are included

in the project and are proposed to be augmented include:

i. NH 31 up to Guwahati

ii. Guwahati Bypass Road

iii. NH 37 (Guwahati to Daboka near Nagaon)

iv. NH 36 upto Dimapur

v. NH 54 upto Silchar

vi. NH 52 upto Itanagar in Arunachal Pradesh via Tezpur

However, till February 2009, only the Guwahati Bypass Road (8 km) has been completed. All the other

stretches under consideration are either under implementation or are still to be awarded to a contractor.

The proposed road augmentation projects are expected to be complete by the end of 2009.

The existing level of connectivity in the State of Assam is given in the table below

Table 4.3: Present Status of Connectivity in Assam Parameter Unit 2006-07

Length of NHs* Km 2836 Length of SHs1 Km 2819

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Parameter Unit 2006-07 Total Surfaced Road Length2 Km 12211 Surfaced Road Length as % of Total Road Length2 % 33

Length of BG Railway2 Km 1127 No. of Civil Airports3 No. 5 Air Passenger Traffic Load (International & Domestic at Guwahati Airport)3 No.

1032413 (2008 Figures)

Air Freight Traffic Load (inward & outward at Guwahati Airport)3 MT

1229 (2008 Figures)

Passengers carried by Inland Water Transport2 Lakhs 246

Sources: 1. Economic Surveys of Assam, 2. Statistical Handbooks, 3. Airports Authority of India, *2008-09 data from NHAI Website:

www.nhai.org

The number of units that have registered themselves under the NEIIPP 2007 has been detailed in Table

4.4 & 4.5. Table 4.4 segregates the units according to their status of operations while Table 4.5 segregates

them according to the sectors.

Table 4.4: Units Registered under NEIIPP 2007 in Assam

Proposed Existing Total

District Number of

Units

Investment (in Rs. Lakhs)

Employment

in nos)

Number of

Units


Employment in

nos)

Number of Units


Employment in

nos)

Baksa 1 988 20 1 774.50 15 2 1762.49 35

Bongaigaon 2 179.60 68 6 1739.27 1433 8 1918.87 1501

Cachar 13 3085.23 267 24 11673.59 6283 37 14758.82 6550

Darrang 8 2950.79 250 4 468.38 57 12 3419.17 307

Dhubri 4 145.50 57 2 11.66 38 6 157.16 95

Dibrugarh 38 3968.32 1125 25 8688.90 540 63 12657.23 1665

Golaghat 30 39835.37 513 17 32376.84 388 47 72212.21 901

Jorhat 26 6421.58 471 18 59369.72 394 44 65791.30 865

Kamrup 252 169165.60 8190 60 21376.80 1586 312 190542.41 9776

Kamrup(Metro) 6 3178.12 145 2 456.32 104 8 3634.44 249

Karbi Anglong 4 - - - - - 4 - -

Karimganj 10 4899.33 259 4 9584.84 90 14 14484.17 349

Lakhimpur 11 1554.21 564 9 119371.27 973 20 120925.47 1537

Morigaon 8 292.50 34 1 - - 9 292.50 34

N.C.Hills 1 3285.20 100 - - - 1 3285.20 100

Nagaon 27 9.05 21 7 - - 34 9.05 21

Sonitpur 12 3411.07 197 16 21953.76 489 28 25364.35 686

Tinsukia 36 7714.49 1292 48 47264.93 2517 84 54979.41 3809

Udalguri 1 186.85 22 3 590.40 180 4 777.25 202

Total 490 251270.80 13595 247 335700.69 15072 737 586971.50 28682

Source: NEDFi

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Table 4.5: Sectorwise Registration of Units under NEIIPP 2007 in Assam

Manufacturing Service Total

District Number of

Units


Employment

in nos)

Number of

Units


Employment in

nos)

Number of Units


Employment in

nos)

Baksa 2 1762.50 35 - - - 2 1762.49 35

Bongaigaon 2 991.71 1145 6 927.16 356 8 1918.87 1501

Cachar 33 13645.51 6439 4 1113.31 111 37 14758.82 6550

Darrang 11 3419.17 307 - - - 11 3419.17 307

Dhubri 6 157.16 95 - - - 6 157.16 95

Dibrugarh 58 11239.51 1510 5 1417.72 155 63 12657.23 1665

Golaghat 42 54724.68 802 5 17487.53 99 47 72212.21 901

Jorhat 29 62967.41 544 15 2823.88 321 44 65791.30 865

Kamrup 253 148951.52 7265 52 39385.27 2370 305 188336.79 9635

Kamrup(Metro) 4 527.21 41 4 3107.24 208 8 3634.44 249

Karbi Anglong 4 - - - - - 4 - -

Karimganj 13 14339.17 334 1 145 15 14 14484.17 349

Lakhimpur 20 120925.47 1537 - - - 20 120925.47 1537

Morigaon 9 292.50 34 - - - 9 292.50 34

N.C.Hills 1 3285.20 100 - - - 1 3285.20 100

Nagaon 28 9.05 21 3 - - 31 9.05 21

Sonitpur 27 24641.48 671 1 722.87 15 28 25364.35 686

Tinsukia 80 54071.44 3588 4 907.97 221 84 54979.41 3809

Udalguri 4 777.25 202 - - - 4 777.25 202

Total 626 516727.93 24670 100 68037.95 3871 726 584765.88 28541

Source: NEDFi

Besides the numbers listed in Table 4.5, there are 11 units for which the sector of operation is not

mentioned. These units envisage an investment of Rs. 2205.62 Lakhs and an employment of 141 which

brings the total number of units to 737 with an investment of Rs. 586971.50 Lakhs and an employment

generation of 28682.

As can be seen from the tables above, for a total proposed investment of Rs. 586971.50 lakhs only 28682

jobs are expected to be generated. This translates into less than one person getting employed per lakh of

investment proposed. This is something that needs to be looked into and industries promoting employment

generation need to be given a boost and thrust. Also, if an industry is bringing large investments but is

highly mechanised the government should look into the support and anciliary industries that can come up

when it is set up. All in all the focus should not only be on bringing in investments but also on promoting

employment.

This section details out the impact on industrialisation in terms of the investments made and proposals

received for setting up industries. Since the guidelines for the 2007 Policy were announced only in 2008,

the impact on industrialisation will not be very clear if we consider the present policy only. To have a better

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understanding and analysis of the impact of subsidies, we have considered industrialisation post the NEIP

1997 which was the policy preceding the current policy and which had similar incentives and subsidies.

The table below lists out the number of intentions for setting up of units in Assam since April 2006. This

data is being presented for judging the level of industrialisation because data for the entire state in terms of

units set up was not available.

Table 4.6: Number of IEMs filed in Assam since 1st April 2006

S.No. Name of Unit Product Production Capacity

1. Gorompani Agro Industries Private Limited Black Tea 450,000 kg

2. Ahinsha Chemicals Instant Tea 216 MT

3. RJ Cement Industries Ordinary Portland Cement, Pozzolona Cement

60,000 MT

4. Cone Craft Paper (P) Ltd Writing and Printing Paper 16,500 MT

5. Dharampal Satyapal Ltd Pan Masala 5700 MT

6. Sundaram Foods (P) Ltd Cakes & pastry 3000 MT

7. Gammon India Ltd Construction & Maintenance of Roads, Rail Beds, bridges, pipelines etc

-

8. Shree Khtowala Re-rolling Mills TMT Bars & Steel Structure 10,000 MT

9. North East Roofing (P) Ltd Asbestos Cement 54,000 MT

10. Brahmaputra Iron & Steel Company (P) Ltd TMT Bars, TOR Structure Bars and Rods

15,000 MT

11. Net Gen Power (P) Ltd Power 15280000 KWH

12. Milestone Cokes LAMC 42,075 MT

13. Eldorado Holdings (P) Ltd Menthol Crystals & Multi rectified Essential Menthol Products

3000 MT

14. Hindustan Lever Ltd Petroleum Jelly 3000 MT

15. Assam Roofing Ltd Asbestos Cement Duro Boards -

16. Shiv Steel Industries ERW Pipes, CRCA Pipes, MS Pipes 12000 MT

17. Barak Valley Cements Ltd Cement 47,200 MT

18. OM North East Agency (P) Ltd Bitumen Emulsion 24,000 MT

19. NE Cables Ltd Electrical Cables, Jelly filled telecom cables

3900 Km

20. Ruchi Soya Industries Ltd Textured Soya Protein Chunks & Granules

25,000 MT

21. Karamchand Appliances (P) Ltd Kitchen & Glass Cleaner, Drain De-clogger

907,2000 L

22. Ozone Ayurvedics Shampoo & Powder 1000,000 pieces

23. Ozone Pharmaceuticals Oral Liquid Preparation 10,000 KL

24. Badarpur Energy (P) Ltd Generation & transmission of electricity using biomass fuel

52560 KW

25. Balaji Udyog Ltd Spheroidal Graphite Iron Inserts 3300 MT

26. International Tobacco Company Ltd Panmasala 216 MT

27. Maruti Nandan Distillery & Industries Extra Neutral Alcohol 8100 KL

28. Kaushambi Investment & Leasing Co (P) Ltd

Pan Masala 216 MT

29. Ozone Ayurvedics Herbal Extracts 300,000 Kg

30. Bongaigon Refinery & Petrochemicals Ltd Euro III-IV Diesel 1.2 MMTPA

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31. Purbanchal Enterprise (P) Ltd Plastic Furniture & Fixtures 3000000 Pieces

32. Gopal Corporation Ltd Mosquito Repellent Coil 8280 Lakhs

33. Nalabari Food Processing (P) Ltd Atta, Maida, Sooji, Wheat Bran 60 MTPD

34. Manaksia Ltd Mosquito Repellent Vaporizer 405,000 KL

35. Emami Ltd Cosmetics & Toiletries, Fairness Cream

2000 MT

36. Rausheena Udyog Ltd Fabricated Curved Switch for Track 7200 nos

37. SC Johnson Products (P) Ltd Electronic Vaporizer & parts 3000,0000 nos

38. Shri Shiv Sai Steel Industries MS Billets 72000 MT

39. SCL Cements (P) Ltd Portland, Aluminous, slag and similar hydraulic cement

231,000 MT

40. Glorishine Multi Trade (P) Ltd Manufacture & packing of soya nuggets

12000 MT

41. Emami Ltd Grey Iron & SG Casting 12000 MT

42. Dharampal Premchand Ltd Storage & Material Handling items like crates, bins, corrugated containers etc

-

43. Petrofarms Ltd Heavy Ceramic Building Products like Bricks and Blocks

300,000 MT

44. Soma Enterprise Ltd Readymix Concrete -

45. Pearl Lifeline Ltd Allopathic Medicines, Preparation IV fluids

-

46. KMC Construction Ltd Ready mix Concrete -

47. ABDOS Lamitubes (P) Ltd Multilayer Tubes 100 million pieces

48. Barak Valley Cements Ltd Portland & Pozzolona Cement 94,700 MT

49. Karnak Breweries Ltd Industrial Alcohol 125000 Hect L

50. Adhunik Cement Ltd Portland, Aluminous, Slag & Hydraulic Cement

2000,000 MT

51. JSW Cement Ltd Portland, Aluminous, Slag & Hydraulic Cement

2905,000 MT

52. Baba Ceramics Ltd Ceramic Tiles 6600,000 sq m

53. Avichal Buildcon (P) Ltd Printed Laminates & Pouches -

54. Shivshakti Cement Clinkers 55,000 T

55. AKB Power Projects (P) Ltd Power 51.84 Million Units

56. Cement Mfg Company Ltd Portland, Aluminous, Slag & Hydraulic Cement

1600,000 MT

57. Topcem India Ltd OPC Cement, PPC Cement, Slag Cement

660,000 MT

58. Subhag Power (P) Ltd Power 3 MW

59. New Age Petcoke (P) Ltd Calcined Petroleum Coke (CPC) 24000 MT

60. Upper Assam Petrocoke (P) Ltd CPC 24000 MT

61. York Print (P) Ltd Printed Cartons -

62. Kaziranga Cement (P) Ltd Cement 90,000 MT

63. Hotel Garden View Three Star Hotel- -

64. North East Pure Drinks (P) Ltd Fruit Juice based Drinks 1200,000 cases

65. Hotel L&D resort Three Star Hotel -

66. Hotel Bhumika Three Star Hotel -

67. Tirupati Fiscal Services (P) Ltd Double & Solid wall corrugated pipes 12000 MT

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of HDPE & PP

68. Hotel Belle Vue (P) Ltd Tourist Accomodation -

69. GNRC Hospital Health Care Services 150 beds

70. IOCL Isomerate facility for EURO-III MS Production

45000 MT

71. Brahmaputra Cracker & Polymer Ltd LLDPE/HDPE Swing Cracker 220,000 TPA

72. Brahmaputra Tubulars Steel Pipes 21850 MT

73. North East Cancer Hospital & Research Institute

Cancer Hospital -

74. New Tech Steel & Alloys (P) Ltd MS Ingots/Billets 20,000 MT

75. Gasgen Ferro Alloys (P) Ltd Ferro Silicon 4000 MT

76. Assam Petrochemicals Ltd Formaldehyde from Methyl Alcohol 8250 MT

77. HM Pulp & Paper (P) Ltd Machine made Paper 49500 MT

78. Sarada Plywood Industries Ltd Plywood & Block board -

79. SM Infrastructure (P) Ltd Hotels, Camps for lodging 200 rooms

80. Assam Hospitals Ltd Health Services -

81. Punrasar Jute Mills (Assam) (P) Ltd Hessian 8250 MT

82. North East Food Products Pineapple, Orange & Tomato Juice 500,000 KL

83. Pride East Entertainments (P) Ltd Entertainment Programs -

84. Hotel Indraprastha Regency Three Star Hotel -

85. CG Foods Galavnised Corrugated Sheets 10,000 MT

86. BR Metallics Iron & Steel 65,000 MT

87. Sarvottam Infra (P) Ltd Coke Oven based products 30,900 T

88. DNP Ltd High Pressure Natural Gas -

89. KD Cements Portland Cement 165,000 MT

90. Maruti Quality Food Products (P) Ltd Noodles 12,500 MT

91. JSB Cement Cement 90,000 MT

92. D1 Williamson Magor Bio-Fuel Ltd Crude Vegetable Oil 10,000 MT

93. D1 Williamson Magor Bio-Fuel Ltd Bio-Deisel 10,000 T

94. Deepak Cables (India) Ltd Conductors, Aluminium Wire Rods, Galvanised Wires

10,920 T

95. CG Galva India Galavanised Corrugated Sheets 10,000 MT

96. Brahmaputra TMT Bars (P) Ltd Captive Power Plant 10 MW

97. Maxim Infrastructure & Real Estate (P) Ltd Five Star Hotel -

98. Rockcem Cements (P) Ltd Clinkers -

99. NV Distelleries & Breweries Extra Neutral Alcohol -

100. Shree Sanyeeji Rolling Mills TMT Bars -

101. Megha Food Products Poultry Feed -

102. KD Iron & Steel Company Steel rolling, TMT Bars -

103. JSB Cement Portland Cement -

104. Brahmaputra Concast Ltd MS Billets/Ingots -

105. Jindal Saw Ltd Coating, Lining & Finishing of Iron & Steel

-

106. Shivam Pipe Industries MS Pipe, GI Pipe -

107. Uma Polymers Ltd Flexible Packaging Material -

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Source: NEDFi

As discussed above, all the above are intentions to set up units and not the actual units that have been set

up. Details of the units set up in the districts visited during the primary interactions have been included in

Appendix H.

The Consultants analysed the data on the number of claims made under NEIIPP 2007 in Assam and the

analysis is presented in the tables below. The tables have been grouped according to the Schemes

available under the Policy and presents an overall picture of the status of claims as of 31st March 2010.

Table 4.7: Claims under Central Capital Investment Subsidy Scheme

Claims Received Claims Approved by SLC but Pending

Total

Claim

Period Number of Claims

Amount of Claims (Rs.

Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 22 286 0 0 22 286 2001-2002 62 677 0 0 62 677 2002-2003 61 628 1 7 62 635 2003-2004 84 879 2 6 86 885 2004-2005 2 27 2 18 4 45 2005-2006 145 2,087 0 0 145 2087 2006-2007 78 1,246 0 0 78 1246 2007-2008 57 860 0 0 57 860 2008-2009 107 1,647 2 13 109 1660 2009-2010 0 0 4 73 4 73

TOTAL 618 8337 11 116 629 8453

Source: NEDFi

Table 4.8: Claims under Insurance Subsidy Scheme


Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 8 2 6 3 14 5.19 2001-2002 0 0 17 8 17 8.38 2002-2003 10 4 27 17 37 20.47 2003-2004 22 10 33 22 55 32.00 2004-2005 65 53 47 32 112 85.18 2005-2006 149 141 45 46 194 186.98 2006-2007 189 229 0 0 189 228.69 2007-2008 2 2 7 20 9 21.70 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

TOTAL 445 441 182 148.08 627 588.58

Source: NEDFi

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Table 4.9: Claims under Interest Subsidy Scheme


Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 1 0 1 0 2001-2002 0 0 0 0 0 0 2002-2003 0 0 3 7 3 7 2003-2004 0 0 1 2 1 2 2004-2005 0 0 7 43 7 43 2005-2006 0 0 82 1503 82 1503 2006-2007 0 0 103 726 103 726 2007-2008 0 0 40 489 40 489 2008-2009 0 0 0 0 0 0 2009-2010 0 0 0 0 0 0

TOTAL 0 0 237 2771 237 2771

Source: NEDFi

Table 4.10: Claims under Transport Subsidy Scheme


Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 75 1,108 6 35 81 1143 2001-2002 95 1,481 14 36 109 1517 2002-2003 182 3,426 26 93 208 3519 2003-2004 238 4,357 28 196 266 4554 2004-2005 241 7,280 41 863 282 8142 2005-2006 314 17,288 128 4810 442 22098 2006-2007 345 23,483 0 0 345 23483 2007-2008 24 2,972 173 14906 197 17878 2008-2009 0 0 0 0 0 0 2009-2010 0 0 0 0 0 0

TOTAL 1514 61395 416 20938 1930 82334

Source: NEDFi

As can be seen from the tables above, quite a substantial number of claims which have been cleared by

the SLC are still pending. Clearance post SLC needs to be expedited so that the policy is smoothly

implemented.

Since it is only three years since the policy was notified, the socio-economic impact of the policy cannot be

measured at this point of time. Hence in this section we are listing down some of the important socio-

economic indicators and there values in 2007, so that these can form the baseline figures if a study is

carried out at a later time for measuring the socio-economic impact of the policy.

The table below lists out some of the important socio-economic indicators for Assam:

��


29


Table 4.11: Socio-Economic Indicators of Assam in 2007

Indicator Unit Base Year Value

Gross State Domestic Product (1999-2000 prices) Rs. Crores 2006-07(Q) 49850

GSDP Growth Rate (1999-2000 prices) (Annual) % 2006-07 7.6 GSDP Growth Rate (1999-2000 prices) (4 years) % 2003-07 6.2 Contribution of Assam GSDP to GDP of India (1999-2000 prices)

% 2006-07 2

Per Capita Income (1999-2000 prices) In Rs 2006-07 15623

Per Capita Income Growth Rate (1999-2000 prices) (Annual) % 2006-07 5.66

Per Capita Income Growth Rate (1999-2000 prices) (4 years) % 2003-07 4.5 Contribution of Secondary sector to GSDP % 2006-07 16.75 Contribution of Manufacturing Sector to GSDP % 2006-07 9.96 No. of small scale industrial units No. 2006-07 27913 Total Employment in SSI units No. 2006-07 131099 P/M investments of SSI units Rs. Lakhs 2006-07 79146 Growth of SSI Units (4 years) % 2003-07 8.9 Growth of Employment in SSI units(4 years) % 2003-07 9 Growth of P/M investments of SSI units(4 years) % 2003-07 27 No. of persons engaged in manufacturing sector No. 2005 119548

Total employment in public & private sector No. 2006 1119394

Growth of Employment in public & private sector % 2003-07 1.5 % Urban Population % 2001 13

Source: Economic Survey, State Statistical Handbook, MM Analysis

The performance evaluation looks at the results of the NEIIPP 2007 policy as were obtained from

discussions with the DICC and DI officials. For the performance evaluation of NEIIPP 2007 policy, the

feedback following the discussions with different stakeholders is summarised below.

4.5.1.1 Directorate of Industries (DI)

We met the Industries Commissioner Mr. Ravi Capoor and had a discussion with him on the impact of

NEIIPP 2007. Mr. Capoor opined that the policy in itself is very good but modification of the policy was a

major issue of dissent. The Policy was modified only 8 months after its announcement without any

consultations or discussions with the State Government. It was the opinion of DI that there has been a

slowdown in the industries in last 2-3 years. No big investor is coming in because for them the policy is not

reliable. They feel that it can be modified without any notification.

At the Directorate of Industries, Mr. Noor Mohammad the Additional Director of Industries was of the

opinion that the industry has faced a slowdown in the last 2-3 years in Assam. The Policy is effective but

there are procedural difficulties which are discussed in the next section.

4.5.1.2 District Industries Centre (DIC)

It can be seen that the micro and small units have always been present in Cachar but the setting-up of

medium industries in steel and alloy has been due to the NEIIPP policy. It is also interesting to note that tea

estates in the area have registered under NEIP 1997 to avail its benefits. Since the tea estates have not

expanded, only the new units have availed its benefits under the NEIPP policy.

�0


30


The areas that have potential in Cachar district include food processing, steel and service sectors. These

are represented in the NEIIPP registration, which indicates a positive direction of growth.

The biggest constraint for further growth is lack of good quality infrastructure facilities especially well

developed road and rail network. This is the major bottleneck for units not coming in the district.

DICCs want information on disbursements of claims to be shared with them because the entrepreneurs

come down to them for knowing the status of their claims and the DICC officials are themselves not aware

of the status of claims. The new units coming up at the Growth Centre at Balipara have not registered

themselves under NEIIPP 2007. They have only got provisional registration from the DICC.

4.5.1.3 Entrepreneurs who availed subsidies under NEIIPP 2007

The Entrepreneurs major concern is that policy guidelines are not clear to the people handling the policy

and claims. As a result the benefits that the units are getting are not uniform. An example is of Biswanath

Tea Industry which submitted the claim for Capital Subsidy 6 months back but have got subsidy for only

Plant and Machinery. No subsidy was given for Electricals and Foundation although two other units located

near to their unit are getting the same under the earlier policy. Issues like these need to be cleared and

sorted out.

We met up with Mr. Jaswant Sethia, DGM, Emami. Even though Emami is a renowned group but they are

facing problems with the claims. They have not received any transport or interest subsidy till date. They

were also wary of the power situation. They have set up a new unit at Abaypur near IIT Guwahati which is

running on DG sets for the last one and a half years. They have got a connection of only 200kVA against

their actual requirement of 800 kVA. Entry Tax is also an issue which dilutes the benefits of the Policy.

Same issues were conveyed to us by Unicem Paints at Guwahati and SRD Nutrients at Mangaldai.

4.5.1.4 Financial Organisations and Entrepreneurs who have not availed of NEIIPP 2007

State Bank of India is the lead bank in Assam. According to Mr. Uttiya Purkayastha, AGM (SME), SBI has a

share of 48-49% of the total SME lending in Assam. He was of the opinion that lack of industrial and basic

infrastructure is a major deterrent in the growth of industry. He also stressed that there should be an upper

limit on the number of units that can be set up in a particular sector. As an example, cement produced in

the region is well over and above the actual requirement of the region. He saw the future of MSMEs in food

processing, flour mills, rice mills etc.

Here the processes and the different stakeholders associated with the NEIIPP 2007 process are evaluated

to under stand them and the need for modification of the processes.

The following figure details out the process flow diagram for the application, screening, recommendation

and disbursement under NEIIPP 2007. Major issue has been with the large no of checks and balances

resulting in long applications to be filled out. Since the subsidy claim amounts are large, these should not

be minimised or done away with. More practical and implementable checklists taking into account the

uniqueness and experiences of the state should be implemented.

��


31


Figure 4.1: NEIIPP Process

The Directorate of Industry takes around 6-8 months to clear a file and send it to the SLC. They themselves

admitted that it is due to shortage of manpower and clarity on guidelines. There is no training or awareness

provided to the DICCs through them either. If guidelines are well defined they were of the opinion that only

one and a half months will be required for clearing the file. There was only one copy of the policy in the

entire DI.

The DICC at Tezpur didn’t even have a copy of the NEIIPP Policy with them. They had downloaded it from

the internet and were using the same. Connectivity is a major issue at Tezpur, the railway line is still in

meter gauge. Subsidy money under the State Industrial Policy is not released. The DICC at Tezpur has

Entrepreneurs submit the claim form to DIC

DIC Office

Re submission of the documents

incorporating the suggested changes by

DIC

Directorate of Industry for SLC

Files put up in SLC meeting

After clearance of claim from SLC pre-audit by

DIPP team

The Functional Manager and other officers help in the filing of the claim by making sure that the documents are correct and in place. General Manger (GM) of DIC is in charge for any claim. GM scrutinized and does physical verification

Further all formalities carried out by GM

DIC, file with the visit report sent to Director

of Industry for SLC

meeting

SLC meeting is being conducted on 20th of

each month. If required member of

SLC also doesphysical verification

DIC GM satisfied with documents

and physical verification

Claims cleared in pre-audit sent to DIPP by

NEDFi

Money coming in from DIPP disbursed through

NEDFi

��


32


around Rs. 1.5 Crores of claims pending for the last ten years but the state has not released any money for

the same. Guidelines of the Policy are not clear, there is a need for training of DICC officials so that they

are able to process the claims better and also spread awareness about the policy.

After detailed visits and interactions with the different stakeholders, it was found that awareness about

NEIPP 2007 was not widespread. It was confined to a small number of interested people who had the

access to and awareness about such initiatives. In order to take this to the next level, awareness programs

need to be conducted .In addition, booklets /leaflets containing the NEIIPP 2007 information need to be

displayed at all the offices in English and local language. In addition, the website of the district s should

also contain a link to the policy document.

The recommendations and remedial measures of improving the implementation and impact of the policy

are presented below:

• The policy document should aim to define the type of industrialisation that needs to be achieved. This

would help in appropriate formulation of the state policy and focussing of the NEIIPP 2007 policy

leading to differentiation between the SSI and large scale sector and correct usage of resources.

• Awareness campaigns and preparation of booklets / leaflets detailing out NEIIPP 2007 in English and

local languages.

• For more effective implementation of NEIIPP, linkages with various nationalised banks along with

improving the infrastructural facilities by the State Govt should be adopted.

• Representation for more involvement and feedback from the Entrepreneurs in the functional

committees set up by Govt of India under NEIIPP 2007.

• Increased role of State Govt can also be visualised while formulating the checklists for NEIIPP by the

Central Govt.

• There is no feedback of the status of applications to the DICCs, once it is sent onward to the SLC.

Earlier the minutes of the SLC committee used to reach the DICCs, but at present the practice has

been discontinued. This feedback should be provided to the DIC.

• A dedicated fund should be allocated for organizing awareness camps.

• Officials evaluating the proposals should be technically well equipped. It was found out that the final

evaluation rests with a Financial Officer in DI. This should be changed and technically qualified people

should be doing the evaluation.

• Policy guidelines have to be redefined and made clearer so that there is uniformity in processing of

claims. This will also reduce the time taken for processing.

• Co-ordination between the DICC, DI, NEDFi and other agencies involved in the evaluation, processing

and disbursement of claims needs to be there.

��


33


• Clarity on the Cost of Plant & Machinery

• Reinstatement of the Clause of 100% Excise Duty Exemption under the Policy

• Better Data Management under the Policy

• Inclusion of Micro & Small Units in the Service Sector

• Clarity on Income Tax Exemption & Guidelines under the Policy

��


34


The State of Meghalaya situated in the North-eastern part of India is about 300 kilometres in length and

100 kilometres in breadth. It is bound on the north by Goalpara, Kamrup

and Nagaon districts, on the east by Karbi Anglong and North Cachar

Hills districts of Assam, and on the south and west by Bangladesh.

Meghalaya emerged as an autonomous state on 2nd

April 1970 and as a

full-fledged State on 21st January 1972.

The State has a geographical area of 22,429 Sq. Kms which represents

about 0.70% of the total area of India. It is a land-locked territory

comprising mostly of hills and tablelands. The State is divided into seven

districts and 39 community development blocks.

The present industrial policy of the state is known as Meghalaya Incentive

Scheme 1997. It came into effect on 15th August 1997 and was said to be in force for a period of 5 (five)

from the date of effect. A review committee on the Industrial Policy 1997 came into effect on 8th May 2007.

The final committee report is yet to be submitted.

The Policy identified the following thrust areas:

1. Agro Based Industries like Horticulture, Biotechnology, Tissue Culture and Orchid Units, Spices

Oleoresin and other Essential Oil Units, Medicinal Plants, Tea and Rubber

2. Animal Husbandry and Meat Processing Industries

3. Development of Mineral based Industries like Coal, Limestone and other minerals like Sillimanite

refractory, Clay Washery, Ceramic glazed tiles, Cement based mosaic tiles, Ceramic crockery and

Ceramic low tension insulators.

4. Electronics & Information Technology

The following categories of units are not eligible to avail benefits under the policy:

1. All types of Saw Mills and Veneer Mills

2. Atta - Chakki / Rice Mills

3. Forest Based Industries not approved by Govt.

5. Meghalaya


34


The State of Meghalaya situated in the North-eastern part of India is about 300 kilometres in length and

100 kilometres in breadth. It is bound on the north by Goalpara, Kamrup

and Nagaon districts, on the east by Karbi Anglong and North Cachar

Hills districts of Assam, and on the south and west by Bangladesh.

Meghalaya emerged as an autonomous state on 2nd

April 1970 and as a

full-fledged State on 21st January 1972.

The State has a geographical area of 22,429 Sq. Kms which represents

about 0.70% of the total area of India. It is a land-locked territory

comprising mostly of hills and tablelands. The State is divided into seven

districts and 39 community development blocks.

The present industrial policy of the state is known as Meghalaya Incentive

Scheme 1997. It came into effect on 15th August 1997 and was said to be in force for a period of 5 (five)

from the date of effect. A review committee on the Industrial Policy 1997 came into effect on 8th May 2007.

The final committee report is yet to be submitted.

The Policy identified the following thrust areas:

1. Agro Based Industries like Horticulture, Biotechnology, Tissue Culture and Orchid Units, Spices

Oleoresin and other Essential Oil Units, Medicinal Plants, Tea and Rubber

2. Animal Husbandry and Meat Processing Industries

3. Development of Mineral based Industries like Coal, Limestone and other minerals like Sillimanite

refractory, Clay Washery, Ceramic glazed tiles, Cement based mosaic tiles, Ceramic crockery and

Ceramic low tension insulators.

4. Electronics & Information Technology

The following categories of units are not eligible to avail benefits under the policy:

1. All types of Saw Mills and Veneer Mills

2. Atta - Chakki / Rice Mills

3. Forest Based Industries not approved by Govt.

5. Meghalaya

��


35


4. A Unit shall not be eligible if the location of its registered office is not within the state of Meghalaya,

provided that the Single Window Agency may permit suitable relaxation of clause (d) above, under

appropriate circumstances.

5. Central Public Sector Undertakings will not be considered

There are incentives available for tiny, small, medium and large scale units located in the state which are

detailed out in the table below

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ran

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ty

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Rep

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o

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n

Co

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Measu

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15%

of

the f

ixed

capital, s

ubje

ct

to a

ceili

ng o

f R

s.3

.5

lakhs.

10%

of

the

fixe

d c

apital

investm

ent,

subje

ct

to a

ceili

ng o

f R

s.1

.5 lakhs,

or

50%

of

the f

ees

paid

for

the

pro

cure

ment

of

know

- how

.

Tota

l re

imburs

em

ent

for

meeting c

ost

incurr

ed o

n

pre

para

tion

of

feasib

ility

/pr

oje

ct

report

subje

ct

to a

m

axim

um

of

Rs.2

5,0

00

4%

on t

erm

lo

ans

exclu

din

g

work

ing

capital

loans

subje

ct

to a

m

axim

um

of

Rs.1

0,

000 p

er

month

for

a

peri

od o

f 5

(fiv

e)

years

fr

om

the

date

of

dis

burs

em

ent

of

the

loan.

30%

of

the

realis

tic w

age

bill

for

local

trib

al

em

plo

yees

over

an

d

abo

ve t

he

stipula

ted

num

ber

of

local tr

ibal

em

plo

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subje

ct

to a

ceili

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f R

s.5

0,

000

ann

ually

30%

an

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5%

fo

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ads u

pto

2 M

W a

nd

loads a

bo

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M

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a

peri

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f 5

years

fro

m

the d

ate

of

com

merc

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pro

duction,

subje

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to a

m

axim

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of

Rs.

Tw

o

lakhs

ann

ually

.

Cost

of

Lab

ora

tory

E

quip

ment

subje

ct

to a

m

axim

um

of

Rs.1

0,

000/-

per

unit w

ill

be

reim

burs

ed

Sale

s

Ta

x

Exem

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on

Pri

ce

pre

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nce

in

accord

ance

with t

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exis

ting

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Pre

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Sto

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Purc

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Rule

s 1

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will

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allo

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or

all

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units.

An

exem

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on 7

5%

of

the

applic

able

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mp D

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fo

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e

Sm

all/

tiny

scale

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Tiny and Small Scale units

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the

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Centr

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Govern

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nt

gra

nting s

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r such

subsid

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d

Sta

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as

above

bein

g

gre

ate

r th

an

the

sam

e,

subsid

y o

f th

e

Sta

te G

ovt.

would

be

lim

ited

to

the

diffe

rence

betw

een

th

e t

wo s

ubsid

ies

50%

of

the

cost

incurr

ed

on

the

tr

ain

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of

local

trib

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50%

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cost

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sets

inclu

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non-

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n t

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non-

ele

ctr

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d

rura

l are

as

Export

ori

ente

d u

nits

com

mitting

to

exp

ort

at

least

50%

of

the

valu

e

of

the

turn

over

will

be e

ligib

le

for

an

additio

nal

reim

burs

em

ent

of

Rs.1

,00,0

00/-

Low

er

rate

of

Megh

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with

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e

xport

com

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ent

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less

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l tu

rnove

r w

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elig

ible

fo

r an

additio

nal

5%

in

vestm

ent

subsid

y

subje

ct

to a

n o

vera

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lakhs.

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pow

er

line

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1

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ent

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ct

to a

m

axi

mum

lim

it

of

Rs.

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ne lakh.

A

dditio

nal

Sale

T

ax

incentive

50%

of

the

cost

reim

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ed t

o

a

ma

xim

um

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Rs.2

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��


39


5.2.3.1 Special incentives for Export Oriented Units

• 100 % Export Oriented Units (EOUs)

An additional 5 % capital investment subsidy subject to a maximum of Rs. 5 lakhs. Sales Tax exemption for an additional period of one year.

• Other Units with an export commitment of 25% and above

An additional 5% capital investment subsidy subject to a maximum of Rs. 5 lakhs.

5.2.3.2 Pioneer Units Scheme

A new industrial unit with fixed capital investment exceeding Rs.3 Crores set up in a district where there

are no medium/large scale industries will be given pioneer status. A pioneer unit will be entitled to an

additional capital investment subsidy of five percent, subject to a ceiling of Rs.15 lakhs. Only the first three

units for any district will be eligible for the pioneer unit status.

The following table lists out the growth of small scale sector in Meghalaya from the year 2000 to 2008.It

can be seen that there is a growth of 41% in the SSI sector from the year 2000 to 2008.

Table 5.1: Growth of SSI sector from 2000-2008 for Meghalaya

Year No of SSI’s Employment Generated Increase in Employment

2000-01 3803 21416 1330

2001-02 4070 23052 1636

2002-03 4341 24332 1280

2003-04 4664 26237 1905

2004-05 5132 28894 2657

2005-06 5591 31467 2573

2006-07 6107 34158 2691

2007-08 6511 36193 2035

Source: Statistical Handbook of Meghalaya, 2008-09

The following details out the district wise, SSI sector status for 2007-08. It can be seen that the highest

number of SSI units is in East Khasi followed by West Khasi and then Jaintia Hills. But in terms of

investment in Plant and Machinery, East Khasi leads followed by Ri Bhoi and Jaintia Hills. With almost one

third lesser no of SSI’s, Ri Bhoi has twice as much investment in plant and machinery.

Table 5.2: District Wise Status of SSI sector for 2007-08 for Meghalaya

Name of District No of SSI’s Investment in Plant and Machinery in Rs Lakhs

Employment in nos

East Khasi 2839 4762.13 17314

Ri-Bhoi 314 2963.05 3169

Jaintia Hills 816 1239.84 3154

West Khasi 1154 415.61 4806

�0


40


Name of District No of SSI’s Investment in Plant and Machinery in Rs Lakhs

Employment in nos

East Garo 676 309.98 3556

West Garo 549 545.17 3598

South Garo 163 46.93 596

Source: Statistical Handbook of Meghalaya, 2008-09

As per discussions with the DI and DIC officials, the growth of the SSI sector is due to the implementation

of Meghalaya State Industrial Policy 1997. The units which could not register under NEIP 1997 and NEIIPP

2007 were registered under the State Policy so as to help the first time investors. Because of this, the

policy has accelerated growth of tiny, micro and small units.

It can be seen that the growth of small scale units has happened because of the State Industrial Policy.

There are no subsidies / incentives in the State Industrial Policy which are going against the NEIIPP 2007.

A review of the existing policy is under way and since the new policy is going to be drafted on the feedback,

adequate care should be taken to ensure that the policies do not overlap and provide double incentives to

the entrepreneurs.

The Directorate of Industries is responsible for development of industrial infrastructure in Meghalaya. The

Directorate has established Industrial Estates, Growth Centres and EPIPs with basic industrial and social

infrastructure facilities

Meghalaya is one of the youngest and smallest states in India and is unique in having 443 km of

international boundary with Bangladesh. This has immense potential for export opportunities. The present

industrial infrastructure of Meghalaya is detailed out in the table below.

Table 5.3: Industrial Infrastructure in Meghalaya

Infrastructure Location Area (in Acres)

EPIP Byrnihat 259.00 + 51.00-Extended Area

Industrial Area Umiam 109.67

Industrial Growth Centre William Nagar 36.00

Industrial Estate Shillong 10.22

Industrial Estate Tura 19.83

Industrial Estate Jowai 14.56

Industrial Estate William Nagar 15.30

Industrial Estate Mendipather 7.00

Industrial Estate Nongstoin 10.00

Source: Directorate of Industries, Meghalaya

With an aim to provide the basic infrastructure to industries, Department of Industries has acquired and

established Six Industrial Estates, in 5 (five) Districts of Meghalaya. Industries are provided with basic

requirements like factory sheds, roads, water, power, etc. and a nominal rent @ Rs.300/- per shed per

month is charged for a lease period of 15 years. The details of these Industrial Estates are given below:

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41


Table 5.4: Industrial Estates in Meghalaya

District Location Total Area Status

East Khasi Hills Shillong. 10.22 acres Sheds – 6

Units – 12

Units with own Const. – 4

Units Existing / Functioning - 9

West Khasi Hills Nongstoin 10 acres

Jaintia Hills Mawlyndep 14.56 acres Units/Sheds –4

West Garo Hills Tura 19.83 acres Units/Sheds – 5

East Garo Hills Williamnagar Mendipathar

51.3 acres

7 acres

Units/Sheds - 4

Source: Directorate of Industries,Meghalaya

5.3.1.1 Industrial Estate, Shillong

The Industrial Estate, at Shillong was established in 1974, and has a covered area of 10.22 Acres. The status of the Industrial Units located in it is as follows:-

Table 5.5: Details of Industrial Estate, Shillong

Status Name of Unit Type of Product Capacity of Unit

M/s Meghalaya Roller Flour Mills Wheat Products 18000 MT

M/s Induscreed Pharmaceuticals Syrup 118.34 lakhs Bottles

M/s B.S Kharkongor Black Smithy Items (Spades, Knives, Dao, etc) 1.32 Lakhs Nos

M/s Kharsyntiew Auto Agencies Auto Workshop 1500 Job works

M/s MKVIB Honey Processing

Functioning (6)

M/s Kharsyntiew Industries (MIDC Godowns)

M/s Warjri Industry Fencing Materials 180 MT

M/s Warjri Additives Chemicals Products (Wear Additive Liver) 144 MT

M/s R.K.B. Industries (i) Paraffin wax from slack wax (ii) Wax Polish (i) 1056 MT

M/s Megh Iron & Steel Fabrication unit

Iron & Steel Fabrication (Water tanks, gates & grills, Iron cross) 6700 Nos

M/s EMU Chemicals & Additives (i) Wax Emulsion (ii) Bitu Max Emulsion (i) 1200 MT

M/s B.L. Mihsil Handloom Products 10500 Nos

M/s Elgin Industries Spices 12.92 MT

Existing but

not Functioning (8)

Meghalaya Metals & Minerals (P) Ltd AAC & ACSR Conductors 514 MT


5.3.1.2 Industrial Estate, Nongstoin

The Industrial Estate at Nongstoin was established in 1989, and has a covered area of 12 acres. There are only 6 units located within the Estate and five of them are Saw Mills. The status of the Industrial Units located in it is as follows:

��


42


Table 5.6: Details of Industrial Estate Nongstoin

S.No. Name of Industrial Unit Manufacturing Activity

1. M/s S.E. Kharlyngdoh Ayurvedic Medical Ayurvedic Medicals

2. M/s Santina Sohshang Saw cum Veneer Mill Saw cum Veneer Mill

3. M/s Krosswell Marngar Saw cum Veneer Mill & Plywood Mill

Saw cum Veneer Mill & Plywood Mill

4. M/s Shali Lyngdoh Saw Mill Saw Mill

5. M/s Dadak Shyrkon Saw & Veneer Mill Saw & Veneer Mill

6. M/s Mawshynrut Saw cum Veneer Mill Saw cum Veneer Mill


5.3.1.3 Industrial Estate, Jowai

The Industrial Estate at Khliehtyrshi, Jowai was established in 1989, and has a covered area of 14.56

acres. There are 4 Government sheds and 3 private sheds in the estate. Saw Mills dominate the Industrial

units present in the Estate and there is a Cold Storage, Bamboo Processing Unit and Broom Manufacturing

unit as well.

5.3.1.4 Growth Centre, Mendipather

An estimated area of 182 hectares was earmarked for setting up of Growth Centre and land was acquired

in 2003. The Growth Centre is envisaged to be set up on about 36 acres. It is still in the stages of

implementation.

5.3.1.5 Industrial Area, Umiam

The Industrial Area at Umiam, in Ri Bhoi District, was established in March 1976. This is about 15 km from

Shillong, the State Capital. It is well connected by roads. The nearest rail-head is around 85 km at

Guwahati. There are a total of 41 units in the area out of which 21are functioning, 11 are under

implementation, 6 are yet to be implemented while there are 3 non-functioning units. Big units like RKB

Cements (having an investment of around 836.81 Lakhs in P&M) are operating out of the Umiam Industrial

Area. The details of the units and industrial activity in the area are as under:

Table 5.7: Details of Industrial Area, Umiam

Status of Unit Name Nature of Activity Installed Capacity

M/s MEDC Ltd Tantalum Capacitors 30 Lakhs

M/s Umiam Calcinates (P) Ltd

Lime Products: (a) Slaked Lime (b) Unslaked Lime

(a)22500 MT (b)6770 MT

M/s R.K.B. Cements (P) Ltd Port Land Cement 30,000 MT

M/s R.N.B. Minerals & Chemicals (P) Ltd

Alum : (a)Ferrous (b)Non Ferrous (a)9600 MT (b)2400 MT

M/s R.N.B. Carbides & Ferro Alloys (P) Ltd

(a)Carbides (b)Ferro Alloys

(a)24000 MT (b)27000 MT

M/s Premier Roller Floor Mills Wheat Products 50 MT

M/s Premier Feed Mills Poultry & Animals Feeds 50 MT

M/s Premier Bakery Confectioneries 5000 Nos

Existing and Functioning : 21

M/s Premier Hatchery Hatchery 90000 Nos

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43



M/s Gemini Feed Mills Poultry & Animals Feeds 2400 MT

M/s Regetta Food Products Meat Processing 128 MT

M/s S.M.Polypack Industries

(a)Poly Propylene Tubular bags (b)Polythene & paper cloth to polythene lamination

(a)6752500 Nos (b) 219 MT

M/s King Aqua Mineral Water 20 Lacs Litres

M/s Shri Sushil Kurbah Decorative stones 2190 MT

M/s Precision Engg Works

(a)Stone Crushing (b)Hollow Block (c)Steel Almirah (d)Steel cabinets (e)Steel Chairs/cursion (f)Steel Furnitures

(a)3000 MT (b)150000 Nos (c)100 Nos (d)100 Nos (e)50 Nos (f)500 Nos

M/s G.S. Kharkongor Stone Crushing 4000 MT

M/s B.Marwein Stone Crushing 3000 MT

M/s Saini Timber Industries Saw Mills 9000 CUM

M/s Vishal Industries Saw cum Veneer Mills 8400 CUM

M/s Riangdo Veneer (P) Ltd Saw cum Veneer Mills 7500 CUM

M/s Shillong Veneer Products cum Saw Mills Saw cum Veneer Mills 8400 CUM

M/s MDH Beverages IMFL Bottling Plant 2,70,000 Cases

M/s Mansan Fruits Processing Fruit Processing

M/s Darry T.C. Kharmujai Silk Reeling

M/s Sesami Chemicals (P) Ltd Carbide

M/s B.K. Timber Industries Saw Mills

M/s Damina Pathaw Saw Mills Saw Mills

M/s Marbaniang Saw Mills Saw Mills

M/s S.K. Dewsaw Saw Mills Saw Mills

M/s Eastern Saw Mills Saw cum Veneer Mills

M/s Timber Crafts Saw cum Veneer Mills

Under Implementation : 11

M/s M.N. Saw cum Veneer Mills Saw cum Veneer Mills

M/s S. Marbaniang C.G.I. Sheet Roofing

M/s S.P. Nongkynrih Tile Manufacturing

M/s V.M Modern Rice Mill Rice Mill

M/s Meghalaya Forest Product Saw Mills

M/s Priyang Saw cum Veneer Mill Saw Mills

Yet to be Implemented : 6

M/s G.G. Timber Veneer Mill K.K. Saw cum Veneer Mills

M/s Meghalaya Petro Chemicals (P) Ltd Essential Oils Products

M/s Virgo Leathers Shoe Makers

Existing but Not Functioning : 3

M/s Parajait Plastic Industries LDPE Bags


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44


5.3.1.6 EPIP, Byrnihat

The Scheme of Export Promotion Industrial Part (EPIP), at Byrnihat, was a Centrally Sponsored Scheme

(CSS) which envisaged development of the area by providing all infrastructure required by Industrial Units

having export potential. Under the above Scheme, Industrial Units committing to export a minimum of 33 %

(later exempted to 25% for the industrially backward states, like Meghalaya) of their finished products were

only to be permitted to be set up in the E.P.I.P.

The infrastructure ideally provided in the EPIP should be roads; water supply; power; drainage; guest

house; residential quarters; office buildings; common facility buildings for banks, post office, etc.

The infrastructure provided in the EPIP at Byrnihat is very inadequate. Detailed interactions with the

entrepreneurs revealed that power and infrastructural facilities were inadequate. Due to this, industries

have stopped coming to the EPIP. There are a total of 40 registered units in the EPIP, out of which 25 are

functioning, 12 are under implementation, and 6 are yet to be implemented while 3 are non-functional.

Table 5.8: Details of EPIP, Byrnihat


Greystone Ispat Ltd Torsteel 49500 MT

Maithan Smelters Ltd Ferro Alloys 28800 MT

Byrnihat Ispat (P) Ltd Integrated Steel Plant, Ferro Alloys 12000 MT

Gita Ferro Alloys (P) Ltd Ferro Alloys 10800 MT

Shyam Century Ferro Alloys Ltd Ferro Alloys 15000 MT

Meghalaya Carbide & Chemicals (P) Ltd

Calcium Carbide, Ferro Alloys 7000 MT

Adhunik Meghalaya Steels (P) Ltd Ferro Alloys 16775 MT

Matiz Metals (P) Ltd Copper rods 12000 MT

Commercial Iron & Steel (P) Ltd M.S. Ingots 14700 MT

Bharm India (P) Ltd C.I. Mould, M.S. Ingots, Sponge Iron 6000 MT

J. G. Spices (P) Ltd Oil Oleoresins 45 MT

Megha Polycon (P) Ltd Water Tanks 1000 MT

Meghalaya Steels Ltd M.S. Ingots, Re-Rolling and Ferro Alloys 65000 MT

Byrnihat Oxygen (P) Ltd Industrial Oxygen Gas 720 MT

M/s Trishul Industries TMT Bars & Coil, M.S. Ingots 30000 MT

M/s Eastern Stones Granite Slabs 5463 MT

M/s Megha Minerals Granite Tiles 120000 Sq ft

Dee ’s Chemicals (P) Ltd Wax Products 2500 MT

Anirudha Steel (P) Ltd M.S. Ingots, Ferrous & Non Ferrous Casting 42000 MT

Kakarania Innovatives Systems (P) Ltd

Packaging Polythene Items 1500 MT

Nalari Ferro Alloys (P) Ltd Ferro Alloys 5600 MT

Meghalaya Sova Ispat Alloys Ltd Ferro Alloys 7458 MT

Existing and Functioning : 25

Trikuta Ferro Alloys (P) Ltd Ferro Alloys, M.S. Ingots, Re-Rolling Mill 17500 MT

��


45



Meghalaya Alloys Ltd Integrated Steel Plant, Ferro Alloys 3000 MT

Nezones Industries Ltd G.I. Pipes 25000 MT

Nezones Steel (Meghalaya) Ltd Silico Manganese

Greystone Sponge Ltd Sponge Iron

Greystone Smelters Ltd Steel melt unit

Greystone Strips Ltd M.S. Strips 20

North Eastern Healthcare & Hospitality (P) Ltd

Disposable Plastic Syringe, Aluminium Furniture Items 25

M/s NERAMAC Ginger Oil 51.35

Meghalaya Fussion Ltd M.S. Ingots 25

Under Implementation : 12

Hanny Fibre (P) Ltd Poly Yarn

Ambica Oils Meghalaya (P) Ltd Industrial oils, grease and lubricants

Meghalaya Mineral Product Ferro Alloys

Khasi Alloy Ltd Ferro Alloys

Yet to be Implemented : 6

B. S. Smelters Ltd Ferrous and Non Ferrous alloys

Surya Alloys Industries (P) Ltd Railway tracks and wagon components

NTL Steels (P) Ltd Steel flats and Steel angles

Existing but Not Functioning : 3

Flagon Bottlers (P) Ltd IFML Bottling unit


5.3.1.7 Units in the Scheme Areas of Byrnihat-Khanapara

The area from EPIP upto Khanapara junction covering a stretch of 10 - 12 km and about 500 metres away

from NH-40 (to the left from Shillong to Guwahati) is notified as "Scheme Area". This Scheme Area is

eligible for all the incentives which are available to Industrial Units at EPIP. With no space for further units

in the EPIP as also the fact that the infrastructure is also not upto the standards, 70 units have already

established in this area and more are coming up.

Table 5.9: Details of Units in Byrnihat-Khanapara Area

Name Nature of Activity Installed Capacity

Jaintia Ferro Alloys (P) Ltd M.S. Ingots, Ferro Silicon 6000 MT

Megha Ispat (P) Ltd M.S. Ingots, Ferro Silicon 6000 MT, 33600 MT

Jaintia Alloys (P) Ltd M.S. Ingots 12000 MT

Satyam Steel (P) Ltd M.S. Ingots 12825 MT

Shivam Ispat & Alloys (P) Ltd M.S. Ingots 22425 MT

Shivani Ispat (P) Ltd M.S. D. Bars, Flats etc 18000 MT

Bimla Ispat (P) Ltd M.S. Ingots 27720 MT

M/s Brahmaputra Wires Products Black Steel Wire (Galvanised & non Galvanised)

6000 MT

M/s Megha Industries & Agro Products Aluminium Utensils 162 MT

Shukla Plaster Megha (P) Ltd Plaster of Paris 2830 MT

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46



M/s R.L. Bakery Bread , Biscuits, Toasts, Cakes etc.

200 MT

Forbes Aqua Mall Ltd Water Purifier Aqua guard 60000 MT

Cherubs Naturals (P) Ltd Nail Enamel Cream 21.43 Lacs Nos

Ishaan Technology (P) Ltd Machineries Electrical Components

24 Nos

Vansha Fragrances (P) Ltd Soya Nuggets DOC/Soya Flour 7200 MT

Vikash Steel Industries (P) Ltd Steel 12 MT

North East Power Line (P) Ltd D.G. Sets, Pump Sets 3600 Nos

North East Bottling (P) Ltd Rum, Whisky, Brandy. 2 lacs,1.20 Lacs,0.75 Lacs

Ri Bhoi Engineering Co. (P) Ltd Bolt & Nuts, Wire, Nail, Nylon ropes

2000 T, 3000 T, 250 T

M/s Bishnu Steel Furnitures Steel Almirah, Steel Cabinets, Steel Chairs

214 MT, 12 MT, 9 MT

Megha Plastics (P) Ltd Plastic Ropes 228 MT

M/s Foto Industry Camera Photographic 480000 Sq. Mt

Sheshu Nutrition (P) Ltd Energy Foods 24 MT

Marak Plastic (P) Ltd PPH woven Sacks, PPH woven Fabrics

550 MT, 140 MT

M/s SG Momin Fabrication Fabricated Items 300 Nos

M/s RS Tailoring Tailoring & Embroidery Works 600 Nos

M/s Belle Herbals Cosmetics (Hair Oil, Cream, Talcum Powder)

31 KL, 11000 Kg.

M/s Byrnihat Feed Mills Poultry Feeds, Cattle Feeds & Pigery Feeds

300 MT

M/s Balaji Candle Industry Candle Sticks 1000 MT

M/s Annie Chems Candle Sticks 900 MT

M/s Anju Industry Oxygen, Nitrogen 376200 Cum, 140000 Cum

M/s Surab Candle Works Candle Sticks 1000 MT

M/s Meghalaya Gases Ltd Oxygen, Nitrogen 376200Cum, 140000Cum

M/s Puja Fabrication

(i) Steel Furnitures (ii) Steel Almirah (iii) Steel Gates & Grills (iv) Steel Trunks

50 Nos, 75 Nos,115 Nos, 10 Nos

Sree Radha Creation (P) Ltd Salt Iodisation 21107 MT

SK (India) Wire Products (P) Ltd Black Wire, Wire Nails 3000 MT, 600 MT

M/s Lyngdoh Tailoring Tailoring Works 200 Nos

M/s Mite Nongrum Turmeric & Allied Industries Turmeric Powder, Cattle feed 800 Kg, 90 MT

M/s Cosmic Craft Industry Cane Craft, Saw Dust, Water proof fibre, Synthetic Resin

2000 MT

M.P. Wood & Mill (P) Ltd Sawn Timber 400 Cum

M/s P Suchiang Stone Crusher Stone Chips 600 MT

M/s Killing Rice Mill Rice Milling 150 MT

M/s Associated Aqua Enterprise (i) Plastic Salt ii) Drinking Water 50 MT, 1000 L

ATC Industries Ltd (i) Fruit Squash ii) RTS Drinks(iii) Jams & Jellies

3000 L, 4000 L6000 L

K.K. Beverages (P) Ltd Packaged Drinking Water & Carbonated Drinks

4800000 L, 1800000 L

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47



Byrnihat Oxygen (P) Ltd (i) Oxygen Gas(ii) Corrugated (iii) Ridging

3.89 Lacs cmt,1680 MT780 MT

M/s Kyrmen Tyre Rethreading Tyre Retreading & Vulcanising 100 Nos, 300 Nos

M/s Meghalaya Steel & Tubes C.C. Sheets 800 MT

M/s Pack & Bottles Pet Bottles 2000 Nos

M/s Shubhum Industries Candle Sticks 1000 MT

M/s Byrnihat Wood Industries Sawn Timber 300 Cum

M/s Continental Veneer & Saw Mill Veneer, Sawn Timber 2700 Cum, 2700 Cum

M/s Megha Candle Candle Sticks 1000 MT

Phanghamukhi Processing Megha (P) Ltd Saw dust, Bamboo dust 300 MT, 300 MT

Pawan Ispat (Meghalaya) (P) Ltd M.S. Ingots 17280 MT

M/s Shree Ganapati Rolling Mills Rolling of Missroll & S.D. Bar 10000 MT

Meghalaya Cast & Alloys (P) Ltd M.S. Ingots Runner Risers 21000 MT

H.M. Cements (P) Ltd Cements 99000 MT

M/s N.R. Roller Mills Atta, Suji Flour, Brand 20000 MT

Omni Agate System (P) Ltd Energy Meters, Electrical Components

500 Lacs Nos

Pioneer Carbide (P) Ltd Ferro Silicon, Calcium Carbide 4125 MT

Shree Sai Rolling Mills (P) Ltd Rolling of M.S. Bar, Flats, Angles 40000 MT

Shree Sai Smelters (P) Ltd M.S. Ingots, M.S Runners 32000 MT

Shree Sai Megha Alloy (P) Ltd M.S. Ingots, M.S Runners, Risers 30000 MT

Colortek Meghalaya (P) Ltd Cosmetics 8425 MT

Meghalaya Ispat Ltd G.C. Sheet, G.P. Sheet , G.P. Coil 36000 MT

Timpack (P) Ltd Bamboo Mat Boards Corrugated Sheet & Particle Board

12.00 Lacs Sq.m

M/s York Print Printed Cartons Corrugated boxes Leaflets Packing Materials

36000 Nos

M/s Godrej Saralee Ltd Mosquito Repellent Coils ,Mats Refills

1500000 Cases, 80000 Cases, 140000 Cases

Hindustan Coca Cola (P) Ltd Soft Drinks 13200 KL.


5.3.2.1 Power

The topography of the State presents an ideal scope for generation of hydro electric power. The tapped

power potential, however, is only 185.2 MW or 6% of the available potential of 3000 MW. Meghalaya has

recently become a power-deficit State, because of the industrialisation that has set in particularly in the

Byrnihat area within Ri-Bhoi District, as is clear from the table below.

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48


Table 5.10: Electricity Profile of Meghalaya

Position as in the year Indicator Unit

1975-76 2008-09

Installed Generation capacity Mega Watt 65.20 185.20

Energy Generation Million Watt 176.08 554.134

Connected load within the State Mega Watt 20.96 521.933

Energy consumption within the State Million Watt 33.346 929.318

Number of consumer within the State Number 7377 248817

Number of Grid Sub-Station Number 2 11

Number of Electrified Villages Number 261 3428

Source: MSEB

Table 5.11: Availability of Power in Meghalaya-Present Scenario

Power Availability (MW) (Annual Average)

Central Sector Share

Year Unrestricted Peak Demand

(MW) State Generation

Total Share Actual drawal

Total Availability (MW)

2004-05 220 67.75 78.91 66.39 146.66

2005-06 280 58.76 82.70 78.07 141.46

2006-07 350 44.60 73.60 94.70 118.20

2007-08 385 75.60 85.35 82.79 160.95

2008-09 425 64.40 98.90 91.60 163.20

The total energy availability in Meghalaya is a total of its own generation, ISGS share, purchase and others

generation. There is a huge Demand Supply gap in the state which can be seen from the figure below:

Figure 5.1: Demand Supply of Electricity in Meghalaya

Source: MSEB

163.2

425

0

50

100

150

200

250

300

350

400

450

Demand Supply

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49


5.3.2.2 Road Connectivity

Considerable achievement has been made in the road length of the state, which has increased from

2786.68 km in 1972 to 8164 km in 2007-08. The road scenario in the state, as on 31st March 2009 is as per

the following table.

Table 5.12: Present Status of Road Network in the state

S.No Category Length in KM

1 National Highway 603

2 State Highway 1137

3 Major District Road 1219

4 Other District Road 5205

Total 8164

Source: PWD

Meghalaya is a land locked state with a large number of small settlements in remote areas. Road is the

only means of transport within the state. While the capital Shillong is relatively well connected, road

connectivity in most other parts of the state is relatively poor. A significant portion of the roads in the state

are still un-metalled. Most of the arrivals into the Meghalaya take place through Guwahati which is around

95 km away.


1. Surfaced 5983

2 Unsurfaced 2181

Total 8164

Road Density per 100 sq. Km 36.39

Source: PWD

Since Bangladesh and Meghalaya share 443 km of international boundary, there are 10 Land Custom

Stations in the state on the below mentioned routes through which export-import business / trading

activities are being carried out.

Table 5.13: Trading Routes in Meghalaya

District Land Custom Station Routes

Baghmara Someshwari River

Baghmara-Durgapur

South Garo Hills

Gasuapara Gandhibo-Karaitoli-Haluaghat

Mahandraganj Mahandraganj Dhanua-Jinjiram River

Dalu Bugai River

West Garo Hills

Dalu Nalitabari Road

Shella Shella River

Pharang Karuh ( Maula River)

Ichamati Ichamati River

Bholanganj Dholai River

Bholanganj to Company Ganje

Komorrah-Chhatak Ropeway

East Khasi Hills

Darogakhai River

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District Land Custom Station Routes

Sonai River

Duba Channel

Dear Valley

Balat

Borsora Cherragaon quarry-Cheragaon

Borsora-Tahirpur

Chalitachera-Samsar Bil

West Khasi Hills

Gauripur-Samsar Bil

Dwaki Piyan River Jaintia Hills

Shillong-Sylhet Road


5.3.2.3 Rail & Air Connectivity

At present, there is no railway line in Meghalaya. There have been proposals for development of the rail

network which has not materialised yet.

Meghalaya has a small airport at Umroi, about 40 km from Shillong on the Guwahati-Shillong highway. The

small size of the airport does not allow the operations of large aircraft and there are helicopter services

from Guwahati.

The number of units that have registered themselves under the NEIIPP 2007 has been detailed in table

5.14 & 5.15. Table 5.14 segregates the units according to their status of operations while Table 5.15

segregates them according to the sectors.

Table 5.14: Units Registered under NEIIPP 2007 in Meghalaya


District Number of

Units


Employment

in nos)

Number of

Units


Employment in

nos)

Number of Units


Employment in

nos)

East Khasi Hills 6 563.10 99 - - - 6 5630.10 99

Jaintia Hills 8 865.80 551 1 9845.43 178 9 10711.23 729

Ri-Bhoi 10 4206.76 448 10 270495.06 217 30 274701.82 665

Total 34 5635.66 1098 11 280340.49 395 45 285976.15 1493

Source: NEDFi

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51


Table 5.15: Sectorwise Registration of Units under NEIIPP 2007 in Meghalaya


District Number of

Units


Employment

in nos)

Number of

Units


Employment in

nos)

Number of Units


Employment in

nos)

East Khasi Hills 4 39.15 39 2 523.95 60 6 563.10 99

Jaintia Hills 9 10711.23 729 - - - 9 10711.23 729

Ri-Bhoi 28 274653.56 652 2 48.26 13 30 274701.82 665

Total 41 285403.95 1420 4 572.20 73 45 285976.15 1493

Source: NEDFi

This section details out the impact of industrialisation in terms of the investments made and proposals


the impact of the present policy will not be very clear if we consider the present policy only. To have a

better understanding and analysis of the impact of subsidies, we have considered industrialisation post the

NEIP 1997 which was the policy preceding the current policy and which had similar incentives and

subsidies.

The Table below lists out the large and medium industries in the state. This list has been provided by the

Directorate of Industries and they did not provide us with segregated data year wise. Thus, this is a

comprehensive list of large and medium units in the state.

Table 5.16: Large and Medium Industries in Meghalaya

S.No. Name of Unit Product Manufactured

Investment ( Rs. lakhs)

Employment

1. Greystone Ispat Limited Torsteel 180 47

2. Maithan Smelters Limited Ferro Alloys 935 81

3. Byrnihat Ispat (P) Limited Steel, Ferro Alloys 117 23

4. Gita Ferro Alloys (P) Limited Ferro Alloys 249 -

5. Shyam Century Ferro Alloys Limited Fero Alloys 976 43

6. Meghalaya Carbide & Chemicals (P) Ltd Calcium Carbide, Ferro Alloys

323 27

7. Adhunik Meghalaya Steels (P) Ltd Ferro Alloys 1182 58

8. Commercial Iron & Steel (P) Ltd MS Ingots 139 28

9. Bharm India (P) Ltd CI Mould, MS Ingots, Sponge Iron

147 30

10. Meghalaya Steels Ltd MS Ingots, Re-rolling & Ferro Alloys

214 47

11. Trishul Hitech Industries TMT Bars & Coils, MS Ingots

232 25

12. Anirudha Steel (P) Ltd MS Ingots, Ferrous & Non-Ferrous Casting

113 23

13. Nalari Ferro Alloys (P) Ltd Ferro Alloys 395 42

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Employment

14. Meghalaya Sova Ispat Alloys Ltd Ferro Alloys 496 -

15. Trikuta Ferro Alloys (P) Ltd Ferro Alloys, MS Ingots, Re-rolling

500 62

16. Meghalaya Alloys Ltd Steel, Ferro Alloys 194 25

17. Nezones Industries Ltd GI Pipes 283 28

18. Nezones Alloys Ltd Ferro Silicon 450 40

19. Greystone Smelters Ltd Steel Melting 235 35

20. Meghalaya Mineral Product Re-rolling 259 30

21. Khasi Alloy Ltd Ferro Alloys 330 26

22. Purbanchal Alloys Ltd Ferro Alloys 990 45

23. Kamakshi Ispat (P) Ltd MS Ingots 139 28

24. RNB Minerals & Chemicals (P) Ltd Alum, Ferrous,Non-Ferrous

146.22 30

25. RNB Carbides & Ferro Alloys (P) Ltd Carbides, Ferro Alloys

101.43 40

26. Sesami Chemicals (P) Ltd Carbide & Ferro Alloys

126.57 20

27. Riangdo Veneer (P) Ltd Steel Tubular Poles 125.49 30

28. Jaintia Ferro Alloys (P) Ltd MS Ingots, Ferro Silicon

147.02 77

29. Megha Ispat (P) Ltd MS Ingots, Ferro Silicon

372.96 75

30. Jaintia Alloys (P) Ltd MS Ingots 117.15 48

31. Satyam Steel (P) Ltd MS Ingots 120 50

32. Shivam Ispat & Alloys (P) Ltd MS Ingots 130.5 35

33. Shivani Ispat (P) Ltd MSD Bars, Flats 137.5 32

34. Bimla Ispat (P) Ltd MS Ingots 129 30

35. Pawan Ispat Meghalaya (P) Ltd MS Ingots 132.64 60

36. Shree Ganpati Rolling Mills MISS Roll & SD Bar 159 71

37. Meghalaya Cast & Alloys (P) Ltd MS Ingots, Runners, Risers

140 60

38. Pioneer Carbide (P) Ltd Ferro Silicon, Calcium Carbide

174 40

39. Shree Sai Rolling Mills (P) Ltd Rolling of MS Bar, Flats, Angels

259.19 44

40. Shree Sai Smelters (P) Ltd MS Ingots, MS Runners

199.17 50

41. Shree Sai Megha Alloy (P) Ltd MS Ingots, MS Runners, Risers

225 45

42. Shillong Ispat & Rolling Mill (P) MS Re-rolled Products, MS Ingots, Ferro Alloys

249 40

43. Pawan Castings Meghalaya (P) Ltd MS Re-rolling Mill 276 40

44. Sai Prakash Alloys (P) Ltd Ferro Alloys 175 50

45. Jai Kamakhya Alloys (P) Ltd Steel 249 40

46. Satyam Alloys (P) Ltd Ferro Alloys 864 40

47. Satya Megha Ispat (P) Ltd Ferro Alloys & MS 964 45

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Employment

Ingots

48. Kushi Metals (P) Ltd MS Re-rolling Mill 276 40

49. Megha Technical & Engineers (P) Ltd Lime Stone 500 40

50. Meghalaya Minerals & Mines Ltd Lime Stone 236 21

51. Lummawshun Minerals (P) Ltd Lime Stone 560 55

52. Komorrah Lime Stone Mining Lime Stone Mining 500 220

53. JG Spices (P) Ltd Oil, Oleoresins 239 38

54. NERAMAC Ginger Oil 110 -

55. Regatta Food Products Meat Processing 110 15

56. NR Roller Mills Atta, Suji Flour 100.48 19

57. Hindustan Coca Cola (P) Ltd Soft Drinks 2058 181

58. KK Beverages (P) Ltd Packaged Drinking Water & Carbonated Drinks

150 22

59. Shree Sarvamayee Products (P) Ltd Food Grain Processing, Nutri Food

158 20

60. Megha Agro Industries Ginger Oil & Turmeric Powder

450 30

61. Mahabir Foods Ltd Biscuits 366 28

62. Shiromoni Foods Products (P) Ltd Food Grain Grading 90 20

63. NR Foods Bakery Products 80 30

64. AA Nutritions Noodles 147 27

65. MDH Beverages (P) Ltd IMFL Bottling 150 45

66. North East Bottling (P) Ltd Rum, Whisky, Brandy

140 19

67. Mile Stone Beverages (P) Ltd IMFL Bottling Plant 199.94 35

68. Abhi Coke (P) Ltd Low Ash Metallurgical Coke

310 30

69. Jaintia Coke (P) Ltd Low Ash Metallurgical Coke

446 40

70. SS Netcom (P) Ltd ISP 133 50

71. Anderson Computers (P) Ltd Computer Software & Services

150 35

72. Seven Sisters Plastics (P) Ltd HDPE/PP Woven Bags

457.5 25

73. Umadutt Industries Ltd HDPE Bags 681.9 30

74. Marak Plastic (P) Ltd PPH Woven Sacks, PPH Woven Fabrics

106 45

75. Megha Plast (P) Ltd HDPE Bags 128 35

76. Anderson Biotech (P) Ltd Organic Manure 128 26

77. Matiz Metals (P) Ltd Copper Rods 106 -

78. Byrnihat Oxygen (P) Ltd Industrial Oxygen 105 20

79. Kakarania Innovative Systems (P) Ltd PE Packaging 331.5 15

80. Forbes Aqua Mall Water Purifier 110 30

81. North East Power Line (P) Ltd DG Sets, Pump 145 25

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Employment

Sets

82. Foto Industry Photographic Camera

120 25

83. Synergy Composites (P) Ltd Saw & Bamboo Dust Panels

120.6 48

84. Omni Agate System (P) Ltd Energy Meters, Electrical Components

270 40

85. Colortek Meghalaya (P) Ltd Cosmetics 104.8 30

86. Meghalaya Ispat Ltd GC Sheet, GP Sheet, GP Coil

416.5 80

87. Timpack (P) Ltd Bamboo Mat Boards, Corrugated Sheet & Particle Board

116.1 85

88. York Print Printed Cartons, Corrugated Boxes, Leaflets, Packaging Material

388.09 46

89. Godrej Saralee Ltd Mosquito Repellent Coils, Mats, Refills

149.92 64

90. Utkarsh Trexim (P) Ltd Kitchen Shutters, Panel Boards, Laminated Lumber Board, Wooden Flooring

479 25

91. Jai Plastech (P) Ltd Plastic Disposable Glasses, Cups & Plates

138 20

92. Dynaroof (P) Ltd Colour Coated Cold Forming Profile Sheets

144.02 30

93. Meghalaya Bitchem (P) Ltd Cationic Bitumen Emulsion for Roads

112 25

94. Oxford Packaging (P) Ltd Corrugated Boxes and Packaging Material

65 45

95. Umadutt Industries Foam Manufacturing Unit

228 40

96. GR Industries Plastic Ropes, Plastic Sutli

531 25

97. Anabond Limited Adhesive & Sealants

160 30

98. Surya Alloy Industries (P) Ltd Railway Track Material & Wagon Components

278 35

99. Brahmaputra Wire Products (P) Ltd Wire Drawing 130 25

100.Byrni Steels (P) Ltd MS Black Wire, GI Wire, Steel Fabrication, Transformer Assembling & Repairing

120 20

101. Ishan Technologies (P) Ltd Machines, Mosquito 1700 30

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Employment

Coils & Mats

102.Meghalaya Feed Products Animal Feed 120 26

103.Byrnihat Springs Ltd Railway Track Fittings

439 30

104.Milestone Concrete (P) Ltd Stone Crushing 144.02 50

105.Simsang Lime Products (P) Ltd Lime & Allied Products

6320.51 45

106.Capricon Stone Products Stone Crushing 141.03 48


Details of the units set up for the districts covered during the primary interactions have been included in

Appendix B.

The Consultants have analysed the data on the number of claims made under NEIIPP 2007 in Meghalaya

and the analysis is presented in the tables below. The tables have been grouped according to the Schemes

available under the Policy and presents an overall picture of the status of claims as on 31st March 2010.



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0.00 2001-2002 7 189 7 189 14 377.32 2002-2003 19 391 19 391 38 781.10 2003-2004 16 403 16 403 32 806.36 2004-2005 18 293 18 293 36 586.09 2005-2006 14 262 14 262 28 523.63 2006-2007 14 207 14 207 28 414.37 2007-2008 14 368 14 368 28 735.80 2008-2009 1 85 1 85 2 170.55 2009-2010 0 0 0 0 0 0.00

TOTAL 103 2198 103 2197.61 206 4395.22

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 1 1 0 0 1 0.61 2001-2002 1 0 1 1 2 1.06 2002-2003 0 0 1 1 1 0.66 2003-2004 5 3 1 0 6 3.83 2004-2005 14 20 1 1 15 20.78 2005-2006 57 201 10 10 67 211.19 2006-2007 0 0 13 13 13 12.59

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Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2007-2008 12 69 12 49 24 118.45 2008-2009 4 5 5 10 9 15.03 2009-2010 3 5 0 0 3 4.78

TOTAL 97 305 44 84.10 141 388.97

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0.00 2001-2002 0 0 0 0 0 0.00 2002-2003 0 0 0 0 0 0.00 2003-2004 0 0 0 0 0 0.00 2004-2005 0 0 0 0 0 0.00 2005-2006 0 0 3 2 3 1.85 2006-2007 0 0 7 12 7 11.71 2007-2008 0 0 39 163 39 163.47 2008-2009 0 0 4 27 4 26.99 2009-2010 0 0 0 0 0 0.00

TOTAL 0 0 53 204.03 53 204.03

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 22 808 0 0 22 807.65 2001-2002 59 1,636 0 0 59 1635.87 2002-2003 139 3,207 3 2 142 3209.85 2003-2004 179 3,074 1 5 180 3079.18 2004-2005 215 3,621 7 80 222 3701.46 2005-2006 322 7,134 1 1 323 7135.21 2006-2007 439 14,169 15 97 454 14265.74 2007-2008 289 13,814 158 5057 447 18871.16 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

TOTAL 1664 47464 185 5242.48 1849 52706.11

Source: NEDFi

As can be seen from the table above, quite a substantial number of claims which have been cleared by the

SLC are still pending. Clearance post SLC needs to be expedited so that the policy is smoothly

implemented.

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57


Since its only three years since the policy was notified, the socio-economic impact of the policy can not be




The table below lists out some of the important socio-economic indicators:

Table 5.21: Socio-Economic Indicators of Meghalaya in 2007


Gross State Domestic Product (1999-2000 prices) Rs. ’000 Crores

2006-07 5.4

GSDP Growth Rate(1999-2000 prices) (Annual) % 2006-07 5.68 GSDP Growth Rate(1999-2000 prices) (4 Years) % 2003-07 5.8 Per Capita Income (1999-2000 prices) Rs. ’000 2006-07 18.9 Growth in Per Capita Income(1999-2000 prices) (Annual) % 2006-07 3.67

Per Capita Income (1999-2000 prices) (4 Years) %

2003-07 3.5

Secondary sector contribution to GSDP % 2006-07 - Contribution of Manufacturing Sector to GSDP % 2006-07 - No. of small scale industrial units No. in ’000 2005-06 5.6 Growth in small scale industrial units (4 Years) % 2003-07 6.2 Total Employment in SSI units No. in ’000 2005-06 31.5 Plant & Machinery investments of SSI units Rs. ’000 Lakhs 2005-06 7.9 Total employment in manufacturing sector (2005) No. in ’000 2006-07 3 Total public sector employment No. in ’000 2001-02 72.8 Urbanisation % 2006-07 19.58


The performance evaluation looks at the results of the NEIIPP 2007 policy as was obtained from

discussions and data with the DIC officials and the DI officials.

Both Ri Bhoi and Jaintia are mineral rich districts and most of the units being set up here are in the medium

and large sector specifically in Steel, Ferro Alloys and Cement.

During discussions with the DIC officials it came out that industrialisation was not very pronounced in both

the districts before 2005, with lesser number of medium and larger units being registered. This resulted in

lesser capital investment, usage of less sophisticated technology and lesser employment of skilled

personnel. Most of the units set up prior to 2005 were into services like tailoring, automobile and car repair

and food processing of betel nut, ginger and turmeric processing.

Post 2005, medium and large units started operations in both these districts. The establishment of the EPIP

at Byrnihat has been instrumental in inviting medium and large scale units in the steel and mineral sector to

set up base and apply for the NEIIPP 2007 subsidies. Jaintia Hills also saw the establishment of cement,

lime and coke industries after 2005.

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58


Figure 5.2: Comparison of Proposed Investments in Meghalaya under NEIIPP 2007

0

50000

100000

150000

200000

NEIIPP 2007 Units Investment in Rs Lakhs

NEIIPP 2007 Units

Investment in Rs Lakhs

17844.57 166236.4

Ri Bhoi Jowai

Source: MM Analysis

The investment of units proposed to be set up in Jowai under NEIIPP 2007 is 9.32 times of the units

proposed in Ri-Bhoi district. This suggests that the number of units set up in Ri Bhoi is smaller than that of

Jowai, even though Ri Bhoi has a full fledged EPIP already functioning. This needs to be looked into

because infrastructure for attracting large scale investments is already present.

Figure 5.3: Comparison of Jaintia and Ri Bhoi for Subsidy Claims under NEIIPP 2007

Source: MM Analysis

The same inference can be drawn from the figure above which details out the comparison in subsidy claims

under the NEIIPP 2007. Consistent with Jowai attracting more investment, it can be seen that the capital

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Jowai 11 5749.41 172.84 81.99 17977.58

Ri Bhoi 27 2584 583.24

No of Units under

NEIIPP

Capital Inv Subsidy

Interest Subsidy

Insurance Subsidy

Transport Subsidy

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59


investment subsidy claim for Jowai is almost 2.23 times that of Ribhoi while the interest claim is 0.30 of that

of Ri Bhoi.

Since there is no railway line in Meghalaya and subsequently no railhead, the transport subsidy is

considerable and is of the order of Rs 17,977.58 Lakhs for Jowai.

5.5.1.1 Feedback from Different Stakeholders

For the performance evaluation of NEIIPP 2007 policy, the feedback following the discussions with different

stakeholders is summarised below.

1. Directorate of Industries (DI)

It was suggested by the DI that there should be an initial subsidy free period for setting up and

consolidation by the concerned industries. Only after this period is over, the unit should be allowed to start

availing of the benefits under the policy. The time period for which benefits are available should also be

reduced; this will ensure that only very serious investors who have an intention of staying on after the

benefit period is over would come for setting up of units under NEIIPP 2007. Almost all of the medium and

large scale units are set up by people from outside Meghalaya. This raises concerns whether the units

would continue to stay on even after the subsidy period is over.

NEIP 1997 had started the process of medium and large scale industrialization while NEIIPP 2007 should

be able to consolidate it. For this to happen, there needs to be efforts from the State Government to

improve the infrastructure quality and availability, Central Government to expedite the evaluation and

disbursement process and industries to be thorough and responsible in their claims.

2. District Industries Centre (DIC)

A major deterrent for industries in Meghalaya is shortage of power. Units in the EPIP at Byrnihat have

closed down their operations due to power shortage.This power shortage is prevalent in Jowai also.

Small entrepreneurs want to set up units from the subsidy claims only i.e. they don’t have clarity that

subsidy claims are admissible only after the unit is operational. When the same is conveyed to them, they

do not establish units at all. In addition there is no marketing material like booklets, leaflets about NEIIPP

2007 on display in DICs in English or in local language.

3. Entrepreneurs who availed subsidies under NEIIPP 2007

Entrepreneurs’ claimed that the concern of the units shifting base after the subsidy period is over is not

valid. Non-availability of Basic infrastructure is a major problem for all the entrepreneurs. Power is not

available, the approach road to an infrastructure facility like EPIP is narrow, congested and in a very bad

condition. Infrastructure within the EPIP is also not in good condition, roads within are in a very bad shape,

there is no power and some of the bigger units like Maithan Alloys have their own captive power plants. If

the trucks from the EPIP reach late for onward transport to the rail head, the entrepreneurs have to pay

demurrage charges, which is a considerable amount for medium and large units.

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60


4. Financial Organisations and Entrepreneurs who have not availed of NEIIPP 2007

State Bank of India is the lead bank in Meghalaya. The bank did not have a copy of NEIIPP 2007 and

officials were not aware of the various subsidies and detailed procedures and hence are not able to

recommend it to their customers.

Industrial Lending is not very high in the state because companies that have set up medium and large

scale units are from outside Meghalaya and they get their projects funded by banks located outside

Meghalaya. Thus banks are not able to develop credit for the industrial sector and expand banking facilities

in Meghalaya.

As per the discussion with the Assistant General Manager, Region 1, SBI and the State Level Banker’s

Committee (SLBC) Report for the State of Meghalaya, the following are the characteristics of Financial

Service Customers which lead to financial exclusion:

1. Social and Economic Position: Low income people do not feel the need for banking since their

transactions are of small value and usually done in cash.

2. Information: People do not want to disclose information, which would be required for accessing

the financial services.

3. Identification / Introduction: Low income people do not have any identification / introduction,

which are accepted by banks to open an account or access other financial services.

4. Financial Literacy: Lack of understanding of financial services and the operations to be carried

out is also a hindrance.

5. Large geographical spread of customers: The spread of customers is very thin which makes the

operation of reaching out to them a very costly affair.

Characteristics of Financial Service Providers:

1. Banking network: No / less number of bank branches in remote areas / tribal areas. This is also

due to closure / mergers / shifting of bank branches, which were hitherto, operated in tribal areas /

remote rural areas.

2. Timings of operation of bank branches in rural areas: Timings are inconvenient for low income

people as they have to go for farm operations or go for wage earning. Thus visiting the bank branch

during daytime would mean loss of wages for a day.

3. Lack of information about the financial services

4. Certain criteria set forth by the bank like restrictions at bank, personal identification, minimum

balance; price of the product, technologies adopted at branches restricts the people to become potential

customers.

In addition, discussions with entrepreneurs who had not availed of NEIIPP 2007 revealed that even if they

were NEDFi clients, they were not aware of the NEIIPP 2007 policy and the associated incentives. This is

because for small and micro units, NEDFi encourages its clients to avail of its customised packages.

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61


Effectiveness evaluation helps us in evaluating whether the stated objectives of NEIIPP 2007 policy have

resulted in the expected outcomes and if not, suggest remedial measures for the same.

5.5.2.1 Analysis of the Stated Policy Objectives vis-à-vis Outcomes of the various policy

notifications

Sl No Reference Document Stated Policy Objective Outcome

Action to be taken to mitigate the present outcome effects

1 NEIIPP,2007 Notification vide File No :10(3)/2007-DBA-II/NER dtd 1st April 2007

under Definition "Industrial Unit"

An Industrial Unit is defined as any industrial undertaking, suitable servicing unit other than that run departmentally by Govt.

This means that all kinds of units like tiny, micro, small, medium and large units are eligible for the benefits under NEIIPP 2007. This indicates a lack of focus in the type of industrialisation that subsidies of this nature usually tend to promote. Thus there can be dual benefits under the State and NEIIPP 2007 policies to one unit, which should not be allowed. In Meghalaya, in two of the districts visited, there have not been any such unit, mainly due to the screening by the DIC and DI officials. This should be encouraged further to firmly segregate the type of units that can avail of the benefits under the 2 policies.

100% Income Tax Exemption

The product costing is done by the industry units taking into account the IT exemption. While the subsidy claim gets delayed, the investors have to bear the loss incurred due to the above costing adopted.

Time limit for processing the claims to be set forth under the policy document and strictly adhered to.

2 CCIS Notification under NEIIPP,2007 Notification No 217 vide File No : 10(3)/2007-DBA-II/NER dtd 27th July 2007

1st Para " with a view to accelerating the industrial development in the NER"

Tiny, micro and small units have never been able to avail NEIIPP 2007 subsidies even after being registered as shown by the data from Ri Bhoi and Jowai. The State Industrial Policy has been catering to these units.

The type of industrialisation that is being targeted by NEIIPP 2007 should be made clear, so that clear focus between the expected benefits under State Policy and NEIIPP 2007 can be brought out. The tiny, micro and small units have their own concerns which need to be addressed in the State Industrial Policy and not as a smaller version of NEIIPP 2007. This focus would help the state governments to specialise in the SSI with the medium and large under NEIIPP 2007.

3 Applicability III. Power Generating Industries: Power Generating Plants upto 10 MW based on both conventional and non conventional resources

When the unit is idle, the unit with the power generation unit has been found to sell its power to Pvt energy players like Reliance Energy or to other companies. This goes against using the same unit only for its own production

After a detailed understanding of the power generating units in the NER set up under NEIIPP 2007, remedial appropriate action can be taken. The sample size is too small to suggest a remedial measure on the same.

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62


Sl No Reference Document Stated Policy Objective Outcome

Action to be taken to mitigate the present outcome effects

4 CCIS Notification under NEIIPP,2007 Notification No 217 vide File No : 10(3)/2007-DBA-II/NER dtd 21st Sep 2007

Note : All transactions in respect of the cost of project must be through cheque / DD.

In NER esp. in the tribal region, local people who have registered their units under NEIIPP find it difficult to adhere to this because of their present financial practices which do not include using banks.

Awareness campaigns by concerned DI's along with lead bank should be taken up to mitigate the same.

5 All expenses/cost of the project submitted by the unit must be certified by a registered CA.

The small units which want to be registered under NEIIPP 2007 cannot afford the services of a registered CA.

There would be lot of professionals, practicing / retired who would want to contribute to the industrialisation process. A panel of such people may be formed at each DIC level and the units till small can be referred to this panel. Other than the fees paid by the units, the Govt can contribute the remaining amount.

6 The building plan and cost of construction of building must be certified by a registered Architect.

The small units which want to be registered under NEIIPP 2007 cannot afford the services of a registered Architect.

There would be lot of professionals, practicing / retired who would want to contribute to the industrialisation process. A panel of such people may be formed at each DIC level and the units till small can be referred to this panel. Other than the fees paid by the units, the Govt can contribute the remaining amount.

Source: DIC’s visited, interaction with entrepreneurs and subsequent MM Analysis

5.5.2.2 Feedback from the Different Stakeholders

For the effectiveness evaluation of NEIIPP 2007 policy, feedback from the different stakeholders is

summarised below.

1. Directorate of Industries

The officials at DI opined that NEIIPP 2007 had contributed to industrialisation but only in the medium and

large scale sector. The tiny, small and micro units had been availing of the benefits under State Industrial

Policy. The amount that units in these sectors invested as capital would be equivalent to the amount that

they need to pay for the Chartered Accountant to make the project report. This makes it difficult for the tiny,

micro and small industries to avail NEIIPP 2007 benefits.

2. District Industries Centre

Officials at the DIC were of the opinion that NEIP 1997 and NEIIPP 2007 have been responsible for the

beginning of large scale industrialisation. These need to be strengthened by adequate infrastructure

provided by the State Govt and more participation from tiny, micro and small units.

3. Entrepreneurs who set up units under NEIIPP 2007

While announcing a policy, the Government usually does not calculate the financial ramifications very

clearly. This has been one of the major factors in the delay in the disbursement of subsidy amounts and the

large number of checks and balances in the form of checklists and submissions that has been introduced. It

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63


was also felt that while the policy is for the entire North East Region, the feedback that had gone to the

Central Government has been consistently focussed on Assam. This needs to change with each state

being represented. This can be done by representation of Meghalaya Chamber of Commerce for the state

of Meghalaya in the functional committees set up by Govt of India under NEIIPP 2007.

Here the processes, people and the different stakeholders associated with the NEIIPP 2007 process are

evaluated to under stand the present processes and the need if any for modification of the processes.

5.5.3.1 Process Flow Diagram of NEIIPP 2007 from Application to Sanctioning




be minimised or done away with. More practical and implementable checklists taking into account the

uniqueness and experiences of Meghalaya should be implemented.

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64



The DIC takes about 2 months to forward the application to the Directorate level. After that, there is no

fixed time for the application to be processed. It would get cleared as and when the SLC meetings are held.


NEIPP 2007 was not widespread. It was confined to a small number of people who had the access to and

awareness about such initiatives. In order to take this to the next level, awareness programs need to be

conducted .In addition, booklets /leaflets containing the NEIIPP 2007 information need to be displayed at all


DIC Office



DIC




DIPP team




of Industry for SLC

meeting







NEDFi


NEDFi

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65


the offices in English and local language. Websites of the districts should also contain a link to the policy

document.

The DICs do not get any feedback on the status of applications, after they have forwarded them to the DI

and from there to SLC. Earlier the minutes of the SLC committee used to reach the DICs, but at present the

practice has been discontinued. Entrepreneurs have to go down to Shillong to track their claim status. This

feedback should be provided to the DIC.

The recommendations and remedial measures of improving the policy are presented below:

• Policy document should aim to define the type of industrialisation that needs to be achieved. This would

help in appropriate formulation of the state policy and focussing of the NEIIPP 2007 policy leading to

differentiation between the SSI and large scale sector and correct usage of resources.

• Awareness campaigns and preparation of booklets / leaflets detailing out NEIIPP 2007 in English

language and local languages of Khasi and Garo.


improvement in the infrastructural facilities by the State Govt should be adopted.

• Representation for more involvement and feedback from the Entrepreneurs can be done by

representation of Meghalaya Chamber of Commerce for the state of Meghalaya in the functional

committees set up by Govt of India under NEIIPP 2007.


Central Govt.

• There is no feedback of the status of applications to the DIC’s, once it is sent onward to the SLC. Earlier

the minutes of the SLC committee used to reach the DIC’s, but at present the practice has been

discontinued. This results in the Entrepreneur is required to go to Shillong every once in a while to

understand the status of the application. This feedback should be provided to the DIC.






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66


Mizoram is spread on an area of 21,081 sq km in the North-East of India.

It has a border length of 123 km with Assam, 277 km with Tripura and 95

km with Manipur and an international border of 404 km with Myanmar and

318 km with Bangladesh. The State is divided into eight districts.

The present industrial policy of the state is known as New Industrial

Policy 2000. It gives thrust to industries in the small scale sector and local

resource based industries. Subsidies and incentives available under the

policy are discussed in the subsequent sections

In addition to the usual eligibility criteria, one distinguishing criteria was

that the industrial units should have their registered offices in the State of Mizoram. The following were the

incentives under the Industrial Policy of 2000.

6.2.1.1 Reimbursement of the cost of Project Report

Cost of preparation of Project Reports prepared by agencies approved by the State Government done as

under:

• 90 % for tiny units subject to a ceiling of Rs.5000 per unit.

• 75 % for small scale and ancillary units subjects to a ceiling limit of Rs.25, 000/- per unit.

• 50 % for medium and large units subjects to a ceiling limit of Rs.50, 000/- per unit.

6.2.1.2 Land Subsidy

25% of the lease charge/fee of allotted developed/undeveloped land for a period of 5 years or 25% of the

amount spent by the unit on development of undeveloped land. Not available for Village and Cottage

Industries.

6.2.1.3 Factory Rent Subsidy to Small Scale Industries

50 % of the duly assessed rent for sheds in Industrial Areas for a period of 5 years from the date of

commercial production subject to a ceiling of Rs. 30,000/- per unit per year for Small Scale and tiny sectors

6.2.1.4 Subsidy on Manpower Development

50 % of the actual expenditure incurred (maximum of Rs. 3000 per trainee) on training of workers will be

reimbursed subject to Rs.25, 000/- per unit.

6. Mizoram

Map of Mizoram

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67


6.2.1.5 Interest Subsidy

4 % subsidy on interest charged by financial institutions for term and working capital loans for a period of

five years from the date of commissioning of their units limited to an amount not exceeding Rs. 3.6 Lakhs

for term loan and Rs. 1.2 Lakhs for working capital loan in a full year.

6.2.1.6 Power Subsidy

60 % of total expenditure on power consumption in case of tiny, small scale and ancillary units, 50 % in

case of medium scale unit and 30 % in case of large scale unit will be reimbursed by the State Government

for a period of five years from the date of commercial production.

6.2.1.7 Subsidy on Power Lines

50 % of the cost incurred on drawal of electric power line from the main line to the factory shed will be

subsidized subject to a ceiling Rs. 50,000/- for each industrial unit.

6.2.1.8 Subsidy on Power Generating Set

50 % of the cost of generating set actually purchased by the industrial unit will be subsidized subject to

maximum of Rs.3.00 lakhs for purchase and installation of captive generating sets.

6.2.1.9 State Transport Subsidy on Plant and Machinery

50 % of the actual cost of transportation of industrial plant and machines from the place of purchase up to

the location of the unit will be reimbursed by the State Government.

6.2.1.10 State Capital Investment Subsidy

Subsidy on the total investment in plant and machinery is provided on a graded scale to industrial units as

per the details below.

Table 6.1: Eligibility Criteria for State Investment Subsidy

Types of Industry

Subsidy eligible in general Subsidy eligible unit set up in the thrust area

Artisan and tiny scale units

15% of total capital investment in plant and machinery

20% of total investment in plant and machinery

Small scale capital units

10% of total capital investment in plant and machinery subject to a maximum of Rs.5.00 lakhs

15% of total investment in plant and machinery subject to a maximum of Rs.7.00 lakhs

Medium scale units



6.2.1.11 Concession on State and Central Sales Tax

State Sales Taxes shall be exempted for a period of 7 years from the date of commencement of actual

commercial production. However, for the units set up in the thrust areas, the exemption period will be 10

years.

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68


In addition there are other benefits like price preference, subsidy on certification/registration etc.

6.2.1.12 Incentives for Export Oriented Units

• For 100% Export Oriented Units (EOU)

An additional 5% capital investment subsidy for investment on plant and machinery subject to a maximum

of Rs.5.00 lakhs for 100% EOUs.

• Other units with an export commitment of less than 100% of the total turn over

An additional 2% of capital investment subsidy for investment of plant and machinery subject to a

maximum of Rs.2.00 lakhs for units of less than 100% export commitment.

It can be seen from the table below that the State Industrial Policy has benefited units in the small scale

sector. District wise status of units registered in 2007-08 is as per the table below.

Table 6.2: District wise no of Small Scale units registered during 2007-08

Sl.No. Name of District Unit Registered No. of person employed

Amount of Investment (Rs.in lakhs)

1 Mamit 4 12 5.3

2 Kolasib 14 35 32.2

3 Aizawl 53 156 189

4 Champhai 15 40 40

5 Serchhip 80 224 192

6 Lunglei 33 105 120

7 Lawngtlai 3 10 7

8 Saiha 3 12 7.5

Total 205 594 593

Source: Statistical Handbook, 2008

There are no subsidies / incentives in the State Industrial Policy which are going against the NEIIPP 2007

but there are certain benefits that are available both in the State and NEIIPP policy. These needs to be

looked into and more focused approach should be there in both the policies so that there is no overlapping

of benefits. There needs to be a clear demarcation between the target groups of State and Central

Government policies.

The Directorate of Industries is responsible for development of Industrial Infrastructure in Mizoram. The

Industrial Infrastructure Section of the Directorate of Industries deals with Departmental Industrial

Infrastructure and implementation of the works is done by Civil Engineer Section of the Directorate.

As part of its industrialisation plan, the Industrial Infrastructure Section has plans for establishing

infrastructure such as Industrial Growth Centre (IGC) and Integrated Infrastructure Development Centre

(IIDC).

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69


6.3.1.1 Industrial Growth Centre (IGC), Luangmual

The Govt. of Mizoram acquired 311 acres of land at Leivakram Luangmual located 10 Kms from Aizawl

City for the project during 1988-1989. Estimated project cost was Rs 15.25 Crores, which was approved by

Govt. of India in the year 1997. It is projected that 22 Industrial Sheds, 95 dwelling units for factory workers

for lease and 15 nos of Industrial Plot and 60 nos of Housing plots would be present in the complex. The

work is still not complete and is expected to be complete this year.

6.3.1.2 Integrated Infrastructure Development Centre (IIDC), Lunglei

The IIDC at Pukpui, Lunglei is spread on an area of 76.68 bighas. The work was completed in 2005 and it

is under Mizoram Khadi & Village Industries Board. Facilities available in the IIDC include:

• Internal Roads

• Water Reservoir of 3 lakhs litres capacity

• Effluent treatment plants to feed at least 60 polluting Industrial Units within the centre along with Solid

waste disposal systems in three different places.

• Power supply from Khuaiva Hydel Project, 750 KV A( 250 KV A x 3) power sub station

• Administrative building, Marketing outlets ,Post Office, Godowns, Conference hall, Bank, Common

Facilities Centre and Canteen, Chowkidar Quarters, Guest House, Dispensary and Industrial Sheds.

6.3.1.3 Industrial Estates

There are two Industrial Estates functioning in Mizoram which are further detailed out in the table below:

Table 6.3: Industrial Estates in Mizoram

Name & Address Location Total no. of sheds constructed

Total no. of sheds allocation

Total no. sheds occupied

Total no of sheds functioning

Industrial Estate Zuangtui

Zuangtui, Aizawl

20 6 6 6

Industrial Estate Kolasib

Kolasib, Aizawl

5 2 2 2

Source: Directorate of Industries

6.3.1.4 Export Promotion Industrial Park (EPIP), near Lengte

178 Ha of land was acquired near Lengte village in 1993 for setting up of the EPIP but it is yet to be

developed. Work is going on and is expected to be complete this year. 36 units can set up in the EPIP.

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70


Although Mizoram possesses a vast hydel potential, the progress in this sector is still very slow. Generation

is done through both hydel and diesel. Following table shows the installed capacity and power generated in

Mizoram.

Table 6.4: Installed & Generation of Electricity in Mizoram in (Unit-MW)

2006-07 2007-08

Installed 9.92 0.5 Diesel

Generation 0.08 0.03

Installed 13.75 13.75 Hydel


Installed 22.92 22.92 Thermal


Import Generation 240.84 347.82

Installed 46.59 37.17 Total


Source: Statistical Handbook Mizoram 2008

The category wise consumption of electricity is given below. It can be seen that industrial consumption

which was 1.17% of the total consumption in 2006-07 decreased to 0.59% of the total consumption in

2007-08.This shows an alarming trend.

Table 6.5: Category-wise Consumption of Electricity

Source: Statistical Handbook Mizoram 2008

Mizoram is connected with a network of primary and secondary roads having a total length of about 6840

km. Of this, 4430 km (64.77%) are under state PWD, 1790 km (26.17%) under Border Roads Organisation

and the remaining 620 km (9.06%) are specific purpose link roads constructed by Rural Development,

Agriculture, Horticulture, Soil Conservation and Forest Departments. While there has been 7.81% increase

Sl. No. Category Unit 2006-07 2007-08

1. Domestic MW 95.98 109.01

2. Commercial MW 7.35 8.90

3. Industrial MW 1.77 1.59

4. Bulk Supply MW 9.63 12.43

5. Public Lighting MW 15.88 9.96

6. Public Water Works MW 20.04 27.09

7. Other (Misc.) MW 0.23 99.24

Total MW 150.88 268.22

8. Per-Capita Consumption KWH 169.71 173.26

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in road density in the state during the last ten years, the current road density of 32.43 km / 100 sq. km is

below India’s national average of 48.80 km /100 sq. km. The category-wise distribution of Mizoram’s

present road network is given below.

Table 6.6: Composition of Road Network

S. No. Category of Roads Length (Km)

Percent of Total Length

1. National Highways (NH) 885 12.94

2. State Highways (SH) 225 3.29

3. Major / Other District Roads (M/ODR) 3471 50.75

4. Village Roads 935 13.67

5. Roads within Towns and Villages 704 10.29

6. Other Purpose Link Roads 620 9.06

Total 6840 100.00

Source: Mizo PWD

In the case of National Highways, NH-54 connects Mizoram with Assam and other parts of the country,

while NH-150 connects it with Manipur and Nagaland. There is also NH-40 (under construction) linking

Mizoram with Tripura which will also provide connectivity to Bangladesh. The road between Champhai

(Mizoram) and Tiddim (Burma) connecting the two countries and 400 km of road along Mizoram border

with Bangladesh are under construction.

Since the current density of roads is only 32 which is lesser than the national average of 40, it can be seen

that the status of roads needs to be improved. The commercial centres of Aizawl, Lunglei etc have internal

well developed roads. For reaching the Industrial Estates and Growth Centres which are located remotely,

approach roads needs to be developed and maintained.

There is a rail link at Bairabi rail station but it is primarily for goods traffic. Bairabi is about 110 km, and

Silchar is about 180 km. from Aizawl, the state capital. The nearest railway station is at Silchar in Assam, 6

hours by road from Aizawl.

Mizoram has only one airport near Aizawl and it can be reached from Kolkata within a short period of 40

minutes. Mizoram is also accessible from Kolkata via Silchar Airport, which is about 200 km. from Aizawl,

the state capital of Mizoram.

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72


The number of units that have registered themselves under the NEIIPP 2007 have been detailed in table



Table 6.7: Units Registered under NEIIPP 2007 in Mizoram


District Number of

Units


Employment in

nos)

Number of Units

Investment (in

Rs. Lakhs)

Employment in

nos)

Number of Units


Employment in

nos)

Aizawl 8 1429.24 161 2 189.35 57 10 161.86 218

Bawngkawn - - - 1 - 100 1 - 100

Bung Bangla 1 132.41 56 - - - 1 132.41 56

Dawrpui 2 279.51 24 1 51.50 39 3 331.01 63

Khatla 1 202.95 20 - - - 1 202.95 20

Kolasib 3 487.50 159 - - - 3 487.50 159

Zarkawt 2 796.70 48 2 7.80 25 4 804.50 73

Zemabawk 1 7.76 46 - - - 1 7.76 46

Zuangtui 1 221 10 - - - 1 221 10

Total 19 3557.06 524 6 248.65 221 25 3805.71 745

Source: NEDFi

Table 6.8: Sectorwise Registration of Units under NEIIPP 2007 in Mizoram


District Number of

Units


Employment in

nos)

Number of Units

Investment (in

Rs. Lakhs)

Employment in

nos)

Number of Units


Employment in

nos)

Aizawl 8 728.90 176 2 889.69 42 10 161.86 218

Bawngkawn - - - 1 - 100 1 - 100

Bung Bangla 1 132.41 56 - - - 1 132.41 56

Dawrpui 3 331.00 63 - - - 3 331.01 63

Khatla - - - 1 202.95 20 1 202.95 20

Kolasib 3 487.50 159 - - - 3 487.50 159

Zarkawt - - - 4 804.50 73 4 804.50 73

Zemabawk - - - 1 7.76 46 1 7.76 46

Zuangtui 1 221 10 - - - 1 221 10

Total 16 1900.82 464 9 1904.90 281 25 3805.71 745

Source: NEDFi

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73


This section details the impact on industrialisation in terms of the investments made and proposals



better understanding and analysis of the impact of subsidies, we have considered industrialisation post

NEIP 1997 which was the policy preceding the current policy and which had the same incentives and

subsidies.

For Mizoram, no data was available for the Investment Intentions as well as units set up in the entire state.

The Consultants have however collected data for the districts of Kolasib & Aizwal which are given in detail

in Appendix C.

The Consultants have analysed the data on the number of claims made under NEIIPP 2007 in Mizoram

and the analysis is presented in the tables below. The tables have been grouped according to the Schemes




Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0.00 2001-2002 0 0 0 0.00 2002-2003 0 0 0 0.00 2003-2004 0 0 0 0.00 2004-2005 0 0 0 0.00 2005-2006 7 62 7 62.00 2006-2007 0 0 0 0.00 2007-2008 0 0 0 0.00 2008-2009 0 0 0 0.00 2009-2010 0 0 0 0.00

TOTAL 7 62 0 0.00 7 62.00

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0.00 2001-2002 0 0 0 0 0 0.00 2002-2003 0 0 0 0 0 0.00 2003-2004 0 0 0 0 0 0.00 2004-2005 0 0 0 0 0 0.00 2005-2006 0 0 0 0 0 0.00 2006-2007 0 0 0 0 0 0.00 2007-2008 0 0 0 0 0 0.00 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

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74



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

TOTAL 0 0 0 0.00 0 0.00

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0.00 2001-2002 0 0 0 0 0 0.00 2002-2003 0 0 0 0 0 0.00 2003-2004 0 0 0 0 0 0.00 2004-2005 0 0 0 0 0 0.00 2005-2006 0 0 0 0 0 0.00 2006-2007 0 0 0 0 0 0.00 2007-2008 0 0 0 0 0 0.00 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

TOTAL 0 0 0 0.00 0 0.00

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 285 687 2 3 287 690.42 2001-2002 195 418 5 54 200 471.61 2002-2003 203 400 9 9 212 409.11 2003-2004 285 512 12 14 297 525.96 2004-2005 343 616 40 50 383 666.32 2005-2006 254 591 197 273 451 864.18 2006-2007 4 119 218 577 222 695.96 2007-2008 0 0 0 0 0 0.00 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

TOTAL 1569 3344 483 980.06 2052 4323.57

Source: NEDFi

As can be seen from the tables above, quite a substantianl number of claims which have been cleared by


implemented.



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75





Table 6.13: Socio-Economic Indicators of Mizoram in 2007



2006-07 2.4

GSDP Growth Rate(1999-2000 prices) (Annual) % 2006-07 7.57 GSDP Growth Rate(1999-2000 prices) (4 Years) % 2003-07 6.3 Per Capita Income (1999-2000 prices) Rs. ’000 2006-07 20.6 Growth in Per Capita Income(1999-2000 prices) (Annual) % 2006-07 4.71 Per Capita Income (1999-2000 prices) (4 Years) % 2003-07 3.6 Secondary sector contribution to GSDP % 2006-07 18 Contribution of Manufacturing Sector to GSDP % 2006-07 1.8 No. of small scale industrial units No. in ’000 2006-07 6.3 Growth in small scale industrial units (4 Years) % 2006-07 6.1 Total Employment in SSI units No. in ’000 2006-07 18.4 Plant & Machinery investments of SSI units Rs. ’000 Lakhs 2006-07 9.4 Total employment in manufacturing sector (2005) No. in ’000 2006-07 - Total public sector employment No. in ’000 2005 47.7 Urbanisation % 2006-07 49.61



discussions and data with the DIC officials and the DI officials.

27 units have availed of subsidies under NEIIPP in Aizawl. The NEIIPP claims are consistent with the local

resources and uniqueness of Mizoram which is evident in a large number of hotels applying for the

subsidies along with local bamboo furniture makers.


For the performance evaluation of NEIIPP 2007 policy, the feedback from different stakeholders is

summarised below.


In Mizoram, cash has been used for all business transactions and people are still not comfortable in using

cheques or drafts. Non acceptance of this has negatively impacted the policy application. Letters had been

written to the Centre regarding this but there is still no response on the same.


Industrial Infrastructure in Mizoram is inadequate. The EPIP commissioned in 1993 is still under

construction and has not been completed. There is acute power shortage. In addition there is no marketing

material like booklets, leaflets about NEIIPP 2007 in display in DICs in English or in local language. The

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76


majority of NEIIPP claims in Mizoram are from local Mizo people unlike other states where claimants are

from outside. This is usually due to the geographical nature of Mizoram which allows for food processing,

furniture making etc. These skill sets are available with the local Mizos and thus sustainable development

and industrialization would occur in the future.

3. Entrepreneurs who availed of NEIIPP 2007 Subsidies

Entrepreneurs have requested for exemption from DD/cheque formality for the purchase of fixed items at

least for a short grace window period. They also felt that all the DIC staff should have knowledge about the

policy with marketing material available in local language to encourage wide publicity.

One unique problem of Mizoram has been that the hotels have not been able to get the required 2 star

certification from the Regional Tourism Office. The Department of Tourism, Mizoram and the concerned

DIC have made sure that the requisite checklists for a 2 star have been adhered to. The applications of the

hotel sector are thus still in process in DIC, pending clarification from the Ministry in the matter. This was

requested to be resolved at the earliest.


State Bank of India is the lead bank in Mizoram. The bank does not have a copy of NEIIPP 2007 document

and is not aware of the various subsidies and detailed procedures. Mizoram Co-operative Apex Bank

(MCAB) is also a strong player in the banking segment. Even they did not have any awareness about

NEIIPP policy and the subsidies and hence have not been able to recommend it to their customers.

As per the discussion with the General Manager, SBI, Managing Director, MCAB, and the State Level

Banker’s Committee (SLBC) Report for the State of Mizoram, the following are the characteristics of the

banks and non customers which lead to financial exclusion:

1. Social and Economic Position: Low income people do not feel the need for banking since the

transactions are small value and is in cash.

2. Information: People do not want to disclose the information, which would be required for accessing the

financial service.

3. Identification / Introduction: Low income people do not have any identification / introduction, which are

accepted, by banks to open an account or access other financial services.

4. Financial Literacy: Lack of understanding of financial services and the operations to be carried out is

also a hindrance.

5. Large geographical spread of customers: The spread of customers is very thin which makes the

operation of reaching out to them a very costly affair.

Characteristics of Financial Service Providers:

1. Banking network: No / less number of bank branches in remote areas. This is also due to closure /

mergers / shifting of bank branches, which were hitherto, operated in remote rural areas due to certain

reasons.

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77


2. Lack of information about the financial services:

3. Certain criteria set forth by the bank like restrictions at bank, personal identification, minimum balance;

price of the product, technologies adopted at branches restricts the people to become potential

customers.

In addition, discussions with entrepreneurs who had not availed of NEIIPP 2007 revealed the following

characteristics:

There is not much awareness of NEIIPP in areas other than Aizawl. Kolasib is also an important

commercial corridor and the entrepreneurs had not even heard the name of the policy.

Effectiveness evaluation helps us in evaluating whether the stated objectives of NEIIPP 2007 policy have

resulted in the expected outcomes and if not; suggest remedial measures for the same.


notifications

There is a lot of overlap of the NEIIPP Policy and its subsidies with the incentives announced by the

Government of Mizoram. As such only one subsidy should be allowed to be availed of by any industrial

unit, either central or state level. The State policy is also due for revision and this process should take note

of the overlapping areas and remove the same.

It is interesting to note that the Interest Subsidy and Comprehensive Insurance registers were not available

for perusal. It is only CCIS and Transport subsidy for which claim details have been recorded.

6.5.2.2 Feedback from the Entrepreneurs who have set up units under the policy

The entrepreneurs especially hoteliers wanted the following to be implemented for the success of NEIIPP:

• Exemption from the use of DD/ cheque for transactions

• Exemption from 2 star approval by the Regional Tourism Office and instead approval to be given

by the concerned State Department of Tourism and concerned DIC





and disbursement under NEIIPP 2007. The major issue has been with the large no of checks and balances

resulting in a long list of applications to be filled out. Since the subsidy claim amounts are large, these

should not be minimised or done away with. Rather more practical and understandable forms should be

designed and used.

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78



DIC level processing time is not fixed. The present claims have been lying with the DIC Aizawl for about a

year now.


NEIPP 2007 was not widespread. It was confined to a small number of people who had the access to and

awareness about such initiatives. In order to take this to the next level, awareness programs needs to be

conducted .In addition, booklets /leaflets containing the NEIIPP 2007 information needs to be displayed at

all the offices in English and local language. In addition, the website of the district s should also contain a

link to the policy document.


DIC Office



DIC




DIPP team




of Industry for SLC

meeting







NEDFi


NEDFi

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79


There is no feedback of the status of applications to the DIC’s, once it is sent onward to the SLC. Earlier


discontinued. This feedback should be provided to the DIC.

The recommendations and remedial measures for improving the policy are presented below:

• Issue of the approval of 2 star hotel status should be resolved at the earliest.

• There is a large overlap between the benefits provided in the State policy and the NEIIPP Policy. Thus

the NEIIPP policy document should aim to define the type of industrialisation that needs to be achieved.

This would help in appropriate formulation of the state policy and focussing of the NEIIPP 2007 policy


• Training should be given to the DIC staff who deal with the NEIIPP policy.

• There should be standardisation of the time frame for processing and on ward forwarding of the

applications under NEIIPP.


languages and local languages of Khasi and Garo.











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Sikkim, situated in the eastern Himalayas became the 22nd

state of India

on April 26,1975. It has a total area of 7,096 sq.km. The entire state is

mountainous, with altitudes ranging from 300 to 8,586 meters from sea

level. There are 440 villages, eight towns and four districts in Sikkim.

Sikkim has a very old Industrial Policy in place. The Policy was framed in

1996 and since then has been amended through The Sikkim Industrial

Promotion and Incentive (Amendment) Act in 2000, 2003 and 2007. The

Industrial Policy has neither been revised nor did a new policy put in

place.

The following subsidies have been provided for in the Industrial Policy of

1996:

Table 7.1: Incentives/Subsidies in the 1996 Policy

S.No. Subsidy/Incentive Quantum of Subsidy

Artisans & Tiny Units:

-15% of total investment in P&M for non-thrust areas.

- 20% of total investment in P&M for thrust areas.

Small Scale Units:

-10% of total capital investment in P&M subject to a max of Rs. 5 Lakhs for non-thrust areas.

-15% of total capital investment in P&M subject to a max of Rs. 7 Lakhs for thrust areas. 1. State Capital Investment Subsidy

Medium/Large Scale Units:

-5% of total capital investment in P&M subject to a max of Rs. 10 Lakhs for non-thrust areas.

-10% of total capital investment in P&M subject to a max of Rs. 15 Lakhs for thrust areas.

Artisans & Tiny Units:

-Rs. 10,000 or actual difference in interest, whichever is less, for non-thrust areas.

- Rs. 15,000 or actual difference in interest, whichever is less, for thrust areas.

Small Scale Units:

- Rs. 50,000 or actual difference in interest, whichever is less, for non-thrust areas.

- Rs. 60,000 or actual difference in interest, whichever is less, for thrust areas.

2. Subsidy on Interest on Working Capital

Medium/Large Scale Units:

Rs1 Lakh or actual difference in interest, whichever is less, for non-thrust areas.

- Rs. 1.1 Lakhs or actual difference in interest, whichever is less, for thrust areas.

3. Concession on State & Central Exempted for a period of 7 years from the date of commencement of actual

7. Sikkim

Sikkim Map

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Sales Tax production

4. Price Preference Price preference for industrial undertakings established in Sikkim by various state govt departments

5. Subsidy on Captive Power Generating Sets

-25% of cost of purchase of captive power generating sets, subject to a max of Rs. 1 Lakh for non-thrust area industries.

- 30% of cost of purchase of captive power generating sets, subject to a max of Rs. 1.25 Lakhs for thrust area industries.

6. Power Consumption Subsidy -100% re-imbursement for units consuming power upto Rs. 50,000 annually

- 25% re-imbursement on amounts over and above Rs. 50,000, subject to a max of Rs. 2 Lakhs in total.

-30% subsidy in power tariff for units coming up at approved locations or in thrust areas.

7. Subsidy on Consultancy Service One time 3% subsidy on consultancy charge paid to an approved consultant subject to a max of:

- Rs. 20,000 for projects upto Rs. 10 Lakhs

-Rs. 1 Lakh for projects above Rs. 10 Lakhs.

8. Exemption of Security Deposit and/or EMD

Units exempted from payment of security deposits in respect of tenders/quotations for purchase of stores by Govt. Departments

9. ISI/ISO Certification 100% reimbursement of expenditure incurred subject to a max limit of

- Rs. 25,000 for non-thrust areas

- Rs. 30,000 for thrust areas

10. Registration Fee subsidy Reimbursement of money spent in obtaining registration with Promotion Council, ISI, Commodity Board, Chamber of Commerce etc subject to a max of Rs. 10,000

Source: Industrial Policy 1996

Besides this Policy, Sikkim Industrial Promotion and Incentive Act, 2000 has been there in the state to

provide incentives to the units in order to promote industrialisation. This Act has been amended in 2003

and 2007 and as of now the incentives under the Act stand as under:

1. State Capital Investment Subsidy: Artisan and Tiny Scale Units Small Scale Units Medium/Large

Scale Units 15% of total capital investment in plant and machinery subject to a maximum of Rs.30,000

10 % of total capital investment in plant and machinery, subject to a maximum of Rs. 5 lakhs

5 % of total capital investment in plant and machinery, Subject to a maximum of Rs.10 lakhs

30% of total capital investment in plant and machinery subject to a maximum of Rs.60,000 for units set up by local entrepreneurs.

For units set up by local entrepreneurs 10% of total capital investment in plant and machinery, subject to a maximum of Rs. 10 lakhs

For units set up by local entrepreneurs 10% of total capital investment in plant and machinery, Subject to a maximum of Rs.20 lakhs

For units set up in the thrust areas 20% of total capital investment in plant and machinery subject to a maximum of Rs.40,000

For units set up in the thrust areas 15% of total capital investment in plant and machinery, subject to a maximum of Rs.7 lakhs

For units set up in the thrust areas 10% of total capital investment in plant and machinery, subject to a maximum of Rs.15lakhs

For units set up in the thrust areas by local entrepreneurs 20% of total capital investment in plant and machinery subject to a maximum of Rs.80,000

For units set up in the thrust areas by local entrepreneurs15% of total capital investment in plant and machinery, subject to a maximum of Rs.14 lakhs

For units set up in the thrust areas by local entrepreneurs 20% of total capital investment in plant and machinery, subject to a maximum of Rs.30 lakhs

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2. Subsidy on Captive Power:

Area Subsidy

Thrust Areas -upto 30% subject to a max of Rs.1.25 Lakhs

-60% subject to a max of Rs.2.50 Lakhs for local entrepreneurs.

Non-thrust Areas -upto 25% of the cost for purchase of captive power generating sets subject to a max of Rs. 1 Lakh

-upto 50% subject to a max of Rs. 2 Lakhs for units set up by local entrepreneurs.

3. Special Incentive to Pioneer Unit:

A new unit with fixed capital investment exceeding Rs.3 crores set up in a district where there are no

medium or large scale industries will be given pioneer status. It will be eligible for Additional State Capital

Investment Subsidy of 5% of fixed capital investment subject to a ceiling of Rs.10 lakhs. Such units will

also be given Power Subsidy for an additional period of 2 years.

4. Special Incentives for Women:

a. Additional State Capital Investment Subsidy of 5% subject to a ceiling of Rs.5 lakhs

b. Additional 2% Interest Subsidy on working capital subject to a ceiling of Rs 1 lakh for a period

of three years from the date of commencement of commercial production.

c. Built up factory sheds shall be allotted to the women entrepreneur on priority basis and the rent

will be subsidized @ 75% of the economic rent for a period of five years from the date of

commencement of commercial production.

5. Reimbursement of Stamp Duty and Registration Fee:

Full reimbursement of stamp duty and registration fee for small scale, village and cottage industrial units,

provided the assets mortgaged to banks/FIs would not be transferred for 5 years.

6. Local Employment Promotion Grant:

Reimbursement of 30% (thirty percent) of the realistic wage bill for local employees. This would be for three

years from the date of entitlement. The maximum limit of such subsidy is Rs.1 lakh.

7. Transport Subsidy:

Transport subsidy of 50 % for transportation of Plant and Machineries from any part of India to the location

of unit in Sikkim maximum of Rs.1 lakh. For local entrepreneurs the maximum limit is Rs.2 lakhs

8. Concession on State & Central Sales Tax:

State Sales Taxes is exempted for a period of 10 years from the date of commencement of actual

commercial production. For units set up in thrust areas, exemption period is 12 years.

9. Special Incentives for Agro and Food Processing Industries:

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d. Additional State Capital Investment Subsidy of 5% subject to a ceiling of Rs.5 lakhs

e. 50% of the cost payable for getting Food Product Order (FPO) license/AGMARK/Trade Mark

for the products for food processing industries subject to a maximum ceiling of Rs.1 lakh.

Beside the subsidies listed above there are subsidies for power, technical know how, training and EDP,

allotment of land, consultancy services, cost incurred on quality control etc.

Industrial Infrastructure in Sikkim is being looked after by the Directorate of Industries only. Although there

is Sikkim Industrial Development & Investment Corporation (SIDICO) but its role is limited to allocating

small loans to entrepreneurs. The entire Industrial Infrastructure is being looked after by the Directorate of

Industries (DI).

According to the data provided by the DI, Industrial Infrastructure in Sikkim is not very well developed

because land is not available due to the difficult terrain of the state. The total Industrial Infrastructure of the

state is limited to a Growth Centre at Namli/ Samlak Marchak and a Mini Industrial Estate at Jorethang.

The Industrial Growth Centre (IGC) at Marchak is spread on an area of 41 acres of which around 70% is

utilised. There are at present 10 units operating in the IGC including a mini steel plant (Gangtok

Enterprises) on 10 acres. Common Facilities in the IGC are limited to provision for roads, electricity and

water. Details of Plots allotted under the Growth Centre are as under:

Table 7.2: Plots Alotted at Growth Centre

S.No. Name of the Unit Name of the Owner / Address

Location Manufacturing Product

Area

1. M/s. Greenways (P) Ltd. Manoj Kiran Tadong, E. Sikkim

Marchak Cosmetics & Toiletries

0.898 acres

2. M/s. Suraj & Co. (P) Ltd. Anil Kr. Gupta, M.G. Marg,, Gangtok

Samlik Marchak Food Packaging & Silk Processing

.19892 acres

3. M/s.Gangtok Enterprises M.P. Agarwal, M.G. Marg, Gangtok

Namli Mini Steel Plant with Induction Furnace

10 acres

4. Breakthrough Pharmaceuticals Pramod Kr. Singhal (Promoter Director) Siliguri, West Bengal

Samlik Marchak Medicines 3,13,196 sq.ft.

5. Kamakhya Industries Mandha Rani Thapa, Gangtok, Sikkim

Samlik Marchak Oxygen & Nitrogen Cylinders

14,400 sq.ft.

6. Explore Sikkim Chungba Bhutia Samlik Marchak Cold Storage 26,850 sq.ft.

7. G.R. Polyfilm R.K. Jaiswal Samlik Marchak Packaging Materials

39,940 sq.ft.

8. Lipika Enterprises M.P. Agarwal Samlik Marchak Flour Mill 33248 sq.ft.

9. M/s. Fabrication & Wire Unit Amber Singh Subba

Samlik Marchak Fabrication 1 acres

10. Sanjeevani Services (P) Ltd. N. Marda Namli Packaging 1.75 acres

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Source: Directorate of Industries, Sikkim

The Mini Industrial Estate at Jorethang in South Sikkim is on an area of 3 acres and comprises of 12

Industrial Sheds only. No further details on the same were available with the DI as well.

7.3.2.1 Roads

Roads in Sikkim are being looked after by the Road and Bridges Department. According to the statistics of

the Department, as on date, 1133.24 km of roads have been black topped with 178.71 km of State

Highways, 744.77 km of Major District Roads (MDR) and 853.04 km of Other District Road (ODR). 190.07

km of Water Bound Macadam and 236 km of bridle and other roads are there as well.

Besides these roads, 873.40 km of roads are under the Border Road Organisation (BRO) which includes

40 km of NH-31A, 67 km of North Sikkim Highway and 766.40 km of other roads.

Under the plans for 2010-11, the department intends to strengthen the road network further by-

• Removal of deficiencies through up-gradation, protection/treatment of slope and development of

drainage system

• Replacement of weak bridges and repair of the existing ones for un-interrupted movement of heavy

axle load traffic.

• Construction of new and link roads.

• Provision for supporting and additional facilities.

An alternate road to reach Gangtok through Rangapurtuk is also planned in the same period. This is being

done through funds under the SARDP (Special Area Road Development Project) from Ministry of Road

Transport & Highways, New Delhi.

7.3.2.2 Power

Power Sector is the key input to the economic sustenance of any State. Sikkim is no exception in this,

largely because here Power Industry, unlike other Industries, is not only the propelling instrument but in

itself a revenue generating sector.

• Existing Infrastructure

As of 2006, the installed capacity in Sikkim was 100.70 MW, including Rangit Hydro Electric Project owned

and operated by NHPC. The state has a share of 74 MW in the Central Sector Generating Station plus 9

MW from inter state Ramam Hydel Projects. Further, based on their viability, a number of mega, small, mini

and micro Hydel projects have been identified and are being developed under state, public, private and

joint sector in the state.

The existing generating stations are as under:

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Table 7.3: Existing Generating Stations(2006)

S.No. Name of Power Station Installed Capacity (MW)

1. Lowe Lagyap Hydroelectric Project 12.00

2. Jali Power House 2.10

3. Rimbi- I 0.60

4. Rongnichu - II 2.50

5. Chaten 0.10

6. Rimbi - II 1.00

7. Lachung 0.20

8. Meyonchu 4.00

9. Upper Rongnichu 8.00

10. Diesel Power House 5.00

11. Rothak 0.20

12. Kalez Khola 2.00

13. Rabomchu 3.00

TOTAL UNDER STATE SECTOR 40.70

14. Rangit – III under NHPC 60.00

TOTAL INSTALLED CAPACITY IN THE

STATE

100.70

Source: Department of Power, Sikkim

Present share allocation from the Central Sector Generating Stations and Rammam are as follows:

Table 7.4: Present Share Allocation

S.No. Generating Stations Installed Capacity (MW) Share (%) Share(MW)

1. FSTPP 1600 1.63 26

2. TSTPP 1000 2.40 24

3. KHSTPP 840 1.55 13

4. CHUKHA 270 2.20 6

5. NHPC 60 13.33 8

6. RAMMAM

(WBSEB)

50 20 10


• Proposed Infrastructure

Two on – going hydro-electric projects i.e. Relli Khola (6 MW), Rongli Khola (5 MW) are in the varying

stages of construction. These projects have been transferred to Sikkim Power Development Corporation

Ltd. (SPDC) for completing them through market borrowings.

Considering the huge untapped Hydel potential of the Teesta, Rangit and their tributaries and keeping in

view of the urgent need to harness the water resource of the state efficiently, there is opportunity to

mobilize flow of capital investment through public, private or joint sector. Therefore, apart from

development of various small, mini and micro hydel projects, the State has also awarded projects to NHPC

and other Private Developers. The projects awarded are given as under:

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Table 7.5: Hydro-Electric Projects Awarded in Sikkim

S.No. Name of Scheme Agency Installed Capacity (MW)

Year of Commissioning

1. Teesta-I Himalayan Green

Energy Pvt Ltd.

280 2011-12

2. Teesta-II Him Urja Infra Pvt

Ltd. N Delhi

330 2011-12

3. Teesta-III Teesta Urja Limited

N. Delhi

1200 2011-12

4. Teesta-IV NHPC 495 2011-12

5. Teesta-VI LANCO Energy Pvt

Ltd. N Delhi

500 2011-12

6. Lachen NHPC Ltd. New

Delhi

210 2011-12

7. Panan Himagiri Hydro

Energy Pvt Ltd.

Hyderabad

300 2010-11

8. Rangyong BSCPL - SCL Joint

Venture Hyderabad

117 2011-12

9. Rongnichu Madhya Bharat

Power Corporation

Ltd.

96 2010-11

10. Sada Mangder Gati Infrastructures

Ltd. Hyderabad

71 2010-11

11. Bhasmey Gati Infrastructures

Ltd. Hyderabad

32 2010-11

12. Chakhungchu Amalgamated

Transpower (I) Ltd.

N. Delhi

50 2010-11

13. Ralong Amalgamated

Transpower (I) Ltd.

N. Delhi

40 2010-11

14. Rangit-II Sikkim Hydro

Ventures Ltd.

Hyderabad

60 2010-11

15. Rangit-IV Jal Power

Corporation Ltd.

Hyderabad

120 2010-11

16. Dikchu Sneha Kinetic Power

Projects Ltd.

54 2010-11

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S.No. Name of Scheme Agency Installed Capacity (MW)


Hyderabad

17. Jorethang Loop HEP DANS Energy Pvt.

Ltd. N. Delhi

96 2010-11

18. Lingza 120 2011-12

19. Thangchi Lachung Power Pvt.

Ltd. N. Delhi

40 2010-11

20. Bimkyong Teesta Power Pvt.

Limited N. Delhi

99 2011-12

21. Bop Chungthang Power

Pvt. Ltd. N. Delhi

90 2011-12

22. Ting Ting SMEC (India) Pvt Ltd.

N. Delhi

70 2010-11

23. Rateychu Bakchachu Coastal Projects

Private Limited

40 2010-11

TOTAL 4510


Completion of the above projects will fetch 12 % free power for the first 15 years and 15 % free power after

that for a period of 35 years. After this, these projects shall be reverted back to the State free of cost in

good operating condition.

Sikkim has 12 existing sub-stations and an equal number of new sub-stations are coming up. Thus the

power scenario in the state appears to be fairly adequate.




Table 7.6: Units Registered under NEIIPP 2007 in Sikkim

Proposed Existing Total District

Number of

Units


Employment in

nos)

Number of Units

Investment (in

Rs. Lakhs)

Employment in

nos)

Number of Units


Employment in

nos)

East Sikkim 6 35741.56 784 1 345.3 82 7 36086.86 866

North Sikkim 1 497 26 - - - 1 497 26

Total 7 36238.56 810 1 345.3 82 8 36583.86 892

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Source: NEDFi

Table 7.7: Sectorwise Registration of Units under NEIIPP 2007 in Sikkim

Manufacturing Service Total District

Number of

Units


Employment in

nos)

Number of Units

Investment (in

Rs. Lakhs)

Employment in

nos)

Number of Units


Employment in

nos)

East Sikkim 5 34738.56 809 2 1003 57 7 35741.56 866

North Sikkim - - - 1 497 26 1 497 26

Total 7 36238.56 810 1 345.3 82 8 36583.86 892

Source: NEDFi




better understanding and analysis of the impact of subsidies, we have considered industrialisation post


subsidies.

The growth of industries is a recent phenomenon in Sikkim. The situation where there was no industry is

now changing and giving place to a number of industrial units. They produce items such as fruit jams and

juices, biscuits, other bakery products, beer, matches, washing soap, plastics, electric cables, barbed

wires, watches, leather goods and industrial jewels. The tax free status of the state alongwith other

inducements offered by Sikkim have become good attraction for entrepreneurs from within the state and

other parts of the country to set up industrial units. Big pharmaceutical companies have either set up plants

or are planning to come up in Sikkim because Sikkim is a politically stable state with virtually no law and

order problem as people are peace loving. The state does not suffer from any labour related problems

either. Sikkim is the only State in the north-eastern region which is free from any insurgency related

problems. The friendly environment and pollution free atmosphere is absolutely conducive to investment.

According to the data provided by the Directorate of Industries, 21 Units have come up in the state after

1997. Out of these 21 units, 11 had come up before the 2007 policy. 10 units have come up since the

notification of the 2007 Policy. Thus, NEIIPP 2007 has given a further boost to industrialisation.

Details of the units set up and registered under the NEIP 1997 and NEIIPP 2007 are given in the table

below:

Table 7.8: Industrialisation in Sikkim

Name of Unit Year of Establishment/ Date of Commencement of

Commercial Production

Investment (Rs. in lakhs)

Employment Generated

Sikkim Organics 15.03.2007 215.69 11

Zydus Healthcare 27.09.2007 4578.97 260

Alkem Laboratories Ltd. 08.08.2007 2530.22 312

R.K. Industries (P) Ltd. 14.04.2008 20.4.74 200

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Name of Unit Year of Establishment/ Date of Commencement of

Commercial Production

Investment (Rs. in lakhs)

Employment Generated

Pristine Life Sciences 13.11.2006 41.86 19

Mayell & Faser (P) Ltd. 13.11.2006 123.62 46

Sikkim Agro Chem. Pvt. Ltd. 20.01.2007 195.11 34

Bhawana Paper Industries 07.02.2007 60.46 25

Denzong Water Industries 09.09.2006 11.57 18

Avinashi Industries 07.01.2007 7.15 6

Polo Tyres 01.11.2005 9.36 9

Composit 04.04.2007 29.07 10

Sun Pharma Sikkim 2008-09 300 300

Promising Export (P) Ltd. 2007-08 135

C.G. Food 2005-06 200 247

Sheela Foam 2002-03 120 16

Sicpa India Ltd. 2005-06 400 50

Godrej Consumer Products 2006-07 400 55

Indichem Health Specialities 2007-08 200 100

Cipla Ltd. 2007-08 2470 450

Golden Cross Pharma 2007-08 2700 425

Source: Directorate of Industries, Sikkim

Details of units set up in the districts visited during primary interactions have been included in Appendix A.

The Consultants have analysed the data on the number of claims made under NEIIPP 2007 in Sikkim and

the analysis is presented in the tables below. The tables have been grouped according to the Schemes




Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0 2001-2002 0 0 0 0 0 0 2002-2003 0 0 0 0 0 0 2003-2004 1 23 0 0 1 23 2004-2005 7 75 0 0 7 75 2005-2006 5 50 0 0 5 50 2006-2007 35 532 0 0 35 532 2007-2008 0 0 0 0 0 0 2008-2009 0 0 11 177 11 177 2009-2010 111 697 55 701 166 1398

TOTAL 159 1376 66 878 225 2254

Source: NEDFi

�0


90




Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 1 1 1 1 2001-2002 0 0 1 1 1 1 2002-2003 0 0 2 1 2 1 2003-2004 0 0 0 0 0 0 2004-2005 1 2 2 3 3 5 2005-2006 1 2 3 3 4 5 2006-2007 2 8 3 3 5 11 2007-2008 0 0 0 0 0 0 2008-2009 0 0 0 0 0 0 2009-2010 0 0 0 0 0 0

TOTAL 4 12 12 11 16 23

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0.00 2001-2002 0 0 0 0 0 0.00 2002-2003 0 0 0 0 0 0.00 2003-2004 0 0 0 0 0 0.00 2004-2005 0 0 0 0 0 0.00 2005-2006 0 0 0 0 0 0.00 2006-2007 0 0 3 17 3 17.47 2007-2008 0 0 2 10 2 10.26 2008-2009 0 0 1 23 1 22.60 2009-2010 0 0 0 0 0 0.00

TOTAL 0 0 6 50 6 50.33

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 13 0 0 0 13.03 2001-2002 0 0 1 33 1 32.68 2002-2003 0 36 0 0 0 36.19 2003-2004 0 37 0 0 0 36.53 2004-2005 0 98 1 13 1 111.35 2005-2006 0 200 0 0 0 199.70 2006-2007 0 151 3 18 3 168.74 2007-2008 0 0 14 414 14 414.07 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

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Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

TOTAL 0 534 19 478.20 19 1012.30

Source: NEDFi

As can be seen from the table above, quite a substantianl number of claims which have been cleared by


implemented.






Table 7.13: Socio-Economic Indicators of Sikkim in 2007


Gross State Domestic Product (current prices) Rs. Crores 2005-06 (AE) 1717

GSDP Growth Rate(current prices) % 2005-06 (AE) 12.15 Per Capita Income (current prices) Rs. ’000 2005-06 (AE) 29.81 Growth in Per Capita Income(current prices) (Annual) % 2005-06 (AE) 11.01 Secondary sector contribution to GSDP % 2004-05 (QE) 30.22

Source: Economic Survey

In this section, we are evaluating the NEIIPP 2007, on three categories namely

1. Performance Evaluation

2. Effectiveness Evaluation

3. Process Evaluation

These have been detailed out in the subsequent sections.


discussions and data with the DIC officials and the DI officials i.e. vis-à-vis the industrialisation that has

come up in the State after the Policy.

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The following figure details out the industrialisation pattern in Sikkim and its East and North Districts under

NEIP 1997 & NEIIPP 2007. After April 1997, 21 units have come up in the state and 15 units have

registered their investment intentions under the NEIIPP 2007.

Figure 7.1: Industrialisation Pattern in Sikkim

7

21

15

0 5 10 15 20 25

Units Registered under NEIIPP in East & North Districts

Investment Intentions under NEIIPP

Total Units in Sikkim since 1997

Source: DI,DIC-East & North





According to the discussions with the Director of Industries, there are not many local entrepreneurs. Even

those who are interested in setting up units lack the capital and technical know-how required. The Director

was also of the opinion that reduction in excise duty exemption has been a major deterrent for industries. It

has diluted the spirit of the policy.

Land is also a major problem in Sikkim because it is not readily available, hence not many industrial areas

and developed industrial infrastructure is there in the state.


The DIC (East & North Districts) needs to be strengthened. Even the General Manager of the DIC Mr.

Karma Tenzing did not know anything about the policy. The DIC did not have any records maintained with

them. When Mr Karma was asked to let us all know about the Incentives under the policy during the FGD

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held at NEDFi office he was at a loss and was not able to share anything. He told us that they don’t have

any data for small and micro units and only bigger units came to the DIC for registration.Thus the DIC

needs to be made aware of the policy so that they can in turn help out people and spread that awareness.


Entrepreneurs’ were of the opinion that industrialisation in the state is slow due to the lack of adequate

infrastructure and reduction in excise duty. Connectivity and power are two major issues. Even

pharmaceutical majors like Torrent are facing problems of power availability during the construction phase

for their unit. Also Industrial Areas/ Estates with proper common facilities and infrastructure need to be

developed.

Proper awareness about the policy and the incentives and subsidies available under it needs to be spread

out so that more and more entrepreneurs avail of the same. Some of the entrepreneurs were not happy

with the time taken for disbursements as also with the non-transperancy in the system wherein they are not

able to locate their claims and their present status.


The State Bank of India is the lead bank in Sikkim having a total of 27 branches with 24 in the rural areas

and 3 in semi-urban areas. As far as lending in the industrial sector is concerned, United Bank is the lead

bank and is the one lending to the industry the most. SBI is mainly lending in the agricultural sector and

under the various government schemes.

Banks are not lending much in Sikkim because the recovery rate is not good. The service sector recovery

rate is far better than that of the Primary and Secondary Sectors.

Also, entrepreneurs who have not availed of the policy did not know anything about the incentives and

benefits available under the same. We met up with the Mr. Manoj Kumar Rai, the owner of Gushing Torrent

Institute Private Limited which was set up in 2007 after the NEIIPP notification but he did not know anything

about the policy. He was not clear whether he had registered his unit under NEIIPP or not although the DIC

told us that he has submitted documents for registration under the policy only. Thus awareness is a major

problem and this starts right from the top i.e. from the Directorate level itself and is something that needs to

be looked into and improved upon considerably.



summarised below.


It was the opinion of DI that NEIIPP 2007 had contributed to industrialisation but only in the medium and


Policy. Usually these units were set up by people who had invested their savings into setting up of units

and had also not availed of any bank financing. The amount that they had invested as capital would be

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94


equivalent to the amount that they need to pay for the Chartered Accountant to make the project report.

These constraints make it difficult for the tiny, micro and small industries to avail NEIIPP 2007 benefits.

Every state has its own natural mineral and other resources. It is also the State Govt who has the greater

understanding of the local needs and constraints. So the State Govt should have a role in the formulation of

checklists that are needed under the policy. This would help in bringing about transparency and the

constraints associated with such difficult terrain, local people with the correct use of its resources


The DIC’s were of the opinion that the NEIP 1997 and NEIIPP 2007 have been responsible for the


provided by the State Govt and more participation from the tiny, micro and small units.

3. Entrepreneurs who set up units under NEIIPP 2007

While announcing a policy, the Govt usually do not calculate the financial ramifications very clearly. This

has been one of the major factors in the delay in the disbursement of subsidy amounts and the large

number of checks and balances in the form of checklists and submissions that has been introduced. It was

also felt that while NEIIPP is for the entire NER, the feedback that has gone to the Central Govt has been

consistently focussed on Assam more. This needs to change with each state being represented.







be minimised or done away with.

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95



On an average, the DIC level processing time is about 1 month for the application to be forwarded to the

Director level. After that, there is no fixed time for the application to be processed. It would get cleared as

and when the SLC meetings are held.


DIC Office

Re submission of the documents incorporating the suggested changes

by DIC


Files put up in SLC meeting After clearance of claim from SLC pre-audit by

DIPP team


Further all formalities carried out by GM DIC, file with the visit report

sent to Director ofIndustry for SLC

meeting


each month. If required member of SLC also

does physical verification

DIC GM satisfied with documents and

physical verification

Claims cleared in pre-audit sent to DIPP by NEDFi


NEDFi

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There is no feedback of the status of applications to the DICs, once it is sent onward to the SLC. Earlier the

minutes of the SLC committee used to reach the DICs, but at present the practice has been discontinued.

This feedback should be provided to the DIC.



would help in appropriate formulation of the state policy and focussing of the NEIIPP 2007 policy leading to



local languages




representation for the state in the functional committees set up by Govt of India under NEIIPP 2007.


Central Govt.

• There is no feedback of the status of applications to the DICs, once it is sent onward to the SLC. Earlier

the minutes of the SLC committee used to reach the DICs, but at present the practice has been







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Arunachal Pradesh is the easternmost state of India situated in the Himalayas. It has an area of 83743 sq.

km and has a long international border with Bhutan to the west (160 km), China to the north and north-east

(1,080 km) and Myanmar to the east (440 km). Arunachal is the

largest state area-wise in the north-east region, even larger than

Assam which is the most populous.

The State is divided into sixteen districts with 36 sub-divisions.

The population density in Arunachal is 13 people per square

kilometre (2001 Census). This stands in sharp contrast to the

population density of 324 people per square kilometre in the

country. Arunachal Pradesh is a vast land, blessed by Nature

with extraordinary diversity, and is relatively sparsely populated.

The main forest types in Arunachal Pradesh are tropical,

subtropical, coniferous, temperate, alpine grasslands and

degraded forest.

Arunachal Pradesh has a New Industrial Policy of 2008. Key features of the Industrial Policy are as under:

The Policy identifies ten thrust areas as under:

1. Agricultural, Horticultural and Plantation based Industries

2. Industries based on non-timber forest produce like bamboo, cane, medicinal plants/herbs, tea, coffee

etc

3. Industries based on locally available raw material except timber.

4. Textile industry (handlooms and power looms), handicrafts and sericulture

5. Electronics and IT based enterprises

6. Mineral based industries (Ferro-alloys, cement plants)

7. Facilitation and Development of Industrial Infrastructure including Power, Communications etc under

PPP

8. Food Processing Industries

9. Engineering and Allied Industries (Rolling Mill, Steel)

8. Arunachal Pradesh

Map of Arunachal Pradesh

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10. Tourism (including resorts, hotels, restaurants etc)

The policy includes a clause on development of industrial infrastructure to promote industrialisation. The

State Government intends to set up Industrial Estates, Growth Centres, Integrated Infrastructure

Development Centres, EPIP, SEZs, Food Parks, IT Parks etc.

Land can be held on lease in the state for a period of 50 years.

The following subsidies have been provided for in the Industrial Policy:

Table 8.1: Incentives/Subsidies in the 1996 Policy


1.

Sales Tax/VAT Exemption

99% Sales Tax (VAT)/ Entry Tax exemption for a period of 7 years from date of commencement of commercial production on import of actual raw material, machineries and equipments into the state as also on the sale of

finished goods in the State.

2. Price Preference Price Preference of 7.5% to be given to the products manufactured by registered Micro and Small Enterprises by the state government controlled

bodies and organizations.

3. Subsidy on preparation of feasibility report

Subsidy on payment made towards preparation of project report by a professional consultant/agency as below:

90% of the total cost subject to a max of Rs. 9000 for Micro Sector

75% of the total cost subject to a max of Rs. 25000 for Small Sector

50% of the total cost subject to a max of Rs. 1 Lakh for Medium/large Sector

4. Power Subsidy Power subsidy is regulated under State Power Policy and NEIIPP 2007

5. Exemption of Stamp Duty Upto 80% of Stamp Duty exempted for execution of deeds for a period of 5 years for approved Industrial Units and enterprises.

6. Special Incentives for Food Processing

Additional State Capital Subsidy of 20% subject to a max. of Rs. 25 Lakhs to eligible food processing units

Source: Industrial Policy 2008

Besides these incentives, there are other facilities like Incentives for Quality Control Certifications, Priority

clearance for setting up large and heavy enterprises, no license required for industry etc.

8.3.1.1 Industrial Infrastructure

Industrial Infrastructure is being looked after by the Directorate of Industries in Arunachal Pradesh.

Although there is Arunachal Pradesh Industrial Development and Financial Corporation Limited (APIDFC)

but its role is limited to that of a Financial Institution. It is mainly financing under the National ST Schemes.

More recently, Arunachal Pradesh Infrastructure Development Corporation (APIDC) has been incorporated

under the PPP mode with APIDFC and a Private Party as the stakeholders but it is yet to fully take off as

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far as infrastructure development is concerned. It has right now taken over two sick units- one food

processing unit at Along and Parsuram Cements for revival. The entire Industrial Infrastructure is being

looked after by the Directorate of Industries (DI) only.

According to the data provided by the DI, Industrial Infrastructure in Arunachal Pradesh is not very well

developed because land is not available due to the difficult terrain of the state. Although there are quite a

few Industrial Estates but the infrastructure is not properly in place. There are 19 Industrial Estates in the

state and an Industrial Growth Centre at Niglojk near Pasighat. Details of the Industrial Estates are as

per the list below:

Table 8.2: Industrial Estates

S.No. Industrial Estate Location Area (in Acres)

1. Tawang Tawang 7

2. Tippi Bomdila, West Kameng 25

3. Dirang Bomdila, West Kameng 7

4. Wanghoo Bomdila, West Kameng 15

5. Pasighat East Siang 20

6. Mebo Pasighat, East Siang -

7. Bam (Basar) Aalo, West Siang 50

8. Manpoliang Ziro, Lower Subansiri 5

9. Chandernagar Yupia, Papumpare 4

10. Naharlagun Papumpare, Yupia 8

11. Changlang Changlang 3

12. Miao Changlang 5

13. Tezu Lohit 4

14. Namsai Tezu, Lohit 4

15. Warko Tezu, Lohit 3

16. Chowkham Tezu, Lohit 4

17. Khonsa Tirap 4

18. Deomali Khonsa, Tirap 5

19. Roing Lower Dibang Valley 99

Source: Directorate of Industries

The Industrial Growth Centre (IGC) at Niglojk near Pasighat is spread on 600 Acres of land and the

according to the DI the entire infrastructure is in place. But when we met up with the Power department,

they told us that till now there is no power supply at the IGC. The IGC will not be able to attract any

industries if power which is the basic requirement for setting up of industry will not be there.

The DI is also planning to set up an IT Park which is under the conceptual stage.

8.3.1.2 Basic Infrastructure

1. Roads

Roads in Arunachal Pradesh are a major issue. The connectivity needs to be improved upon if industry has

to be attracted to the state. The state has difficult terrain and a lot of projects have been sanctioned. Work

is also going on for different stretches and the connectivity is bound to improve if they are completed in

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time. Some of the augmentation projects going on include the Trans Arunachal Highway and 2-lane

connectivity of district headquarter towns of the state. Some of the sections covered under this include:

1. Tawang to Nechiphu Section (232 km): This sector is being improved to 2-lane standards by BRO

under China Study Group Programme. The target date of completion is March 2012.

2. Nechiphu to Potin Section (331 km): State PWD is preparing the pre-feasibility reports which need to

include the land acquisition plans and proposals to seek environmental and forest clearances. Land

acquisition needs to be done after this. DONER issued an NIT for qualification of bidders in November

2008. The State Government needs to complete the requirements at its end so that the bidding

process can be completed and work can be awarded.

3. Potin to Pasighat Section (500 km): Work still not awarded. DPR and land acquisition needs to be

done.

4. Pasighat to Mahadevpur Section (290 km): Improvement being done through BRO. DPR already

prepared. Work to start soon.

5. Mahadevpur to Kanubari Section (350 km): Pre-feasibility Reports done. Road will be inspected.

Eleven District Headquarter towns, out of 16 are located on the alignment of Trans Arunachal Highway.

DPR preparation work in respect of the roads connecting 4 district headquarter towns would be allocated to

various agencies after CCEA’s approval.

2. Power

Power Sector is the key input to the economic sustenance of any State. Arunachal Pradesh although has a

lot of hydro potential but it has not been exploited fully. It will help in industrialisation and progress of the

state, if the generation potential is exploited. The State has identified around 135 Hydro Electric Projects

(HEPs) out of which 63 remain un-allotted. Also the existing HEPs are not running at their full capacity

• Existing Infrastructure

The following table details out the status of Hydro Electric Projects identified in the state:

Table 8.3: Status of Major HEPs

Number of HEPs identified 135 Nos.

Potential from 135 Nos. HEPs 57002.50 MW

Projects allotted to CPSUs 7 Nos

Potential of 7 Nos. HEPs 10230 MW

Projects allotted to Private Developers 65 Nos

Potential of 65 Nos. HEPs 15492.50 MW

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Potential of 72 Nos. allotted HEPs. 25722.50 MW

Free Power @ 12% from 72 Nos. allotted HEPs. 3086.70 MW

Nos. of Un-allotted HEPs 63 Nos

Potential of Un-allotted HEPs 31280 MW

Mega projects under operation (1 No.) 405 MW

Mega projects under implementation (2 Nos.) 2600 MW

Source: Department of Power, Arunachal

The following table lists out the existing hydel generating stations in the state.

Table 8.4: Existing Stations

Location Name of Station Unit (in KW) Installed Capacity (KW)


Kitpi Ph-I 3x500 1500 1977-78

BTK Camp 1x10 10 1995-96

Thongleng 1x10 10 1995-96

Nuranang 3x2000 6000 1996-97

T. Gompa 1x50 50 2001-02

Tawang District

Dudunhghar 1X30 30 2004-05

Rahung 3X250 750 1972-73

Dirang 4X500 2000 1977-78

Sessa 3X500 1500 1992-93

Khelong 1X10 10 1995-96

Rupa 2X100 200 1997-98

West Kameng District

Dokumpani 1X30 30 2000-01

Seppa 3x100 300 1980-81

18th Mile 1x10 10 1995-96

East Kameng District

Pakke Kesang 1x30 30 2001-02

Senkhi 3x250 750 1979-80 (De-commissioned)

Papum Pare District

Hostalam 1x5 5 1995-96

Koloriang 1x10 10 1995-96 Kurung Kumey District

Patte MHS at Tali 1x30 30 2004-05

Mai Ph-I 4x500 2000 1977-78

Mai Ph-II 2x500 1000 1982-83

Lower Subansiri District

Tago 3x1500 4500 1992-93

Daporijo 4x100 400 1981-82

Maro 1x30 30 2002-03

Upper Subansiri District

Siyum 1x30 30 2005-06

Pagi (Basar) 2x50 100 1972-73 West Siang District

Along 4x100 400 1975-76

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Location Name of Station Unit (in KW) Installed Capacity (KW)


Ego-Echi 4x100 400 1987-88

Mechuka 2x50 100 1989-90

Yomcha 1x50 50 2001-02

Tato 1x50 50 2004-05

Beye 1x30 30 2004-05

Yingkiong Ph-I 3x50 150 1980-81

Tuting 2x50 100 1984-85

Yingkiong Ph-II 2x100 200 1992-93

Silli 2x250 500 1994-95

Pangkang 1x125 125 1995-96

Sirnyuk 2x1000 2000 1996-97

Kopu 1x50 50 2004-05

Upper Siang District

Silingri 1x30 30 2006-07

Pasighat 2x100 200 1974-75

Yembung 4x500 2000 1994-95

East Siang District

Sille 1x50 50 2001-02

Deopani Ph-I 3x250 750 1986-87

Sissiri 2x250 500 1992-93 (De-commissioned)

Abhapani (1x250)+(2x100) 450 1994-95

Jambupani 1x30 30 2000-01

Lower Dibang Valley District

Deopani Ph-II 2x250 500 2004-05

Anini 3x50 150 1994-95

Tah Ahfra 1x50 50 2001-02

Chini Ahfra 1x250 250 2001-02

Echi Ahfra 2x200 400 2005-06

Dibang Valley District

Awapani Ph-II 2x250 500 2005-06

Dura Nallah 4x100 400 1976-77 Lohit District

Tafragram 1x250 250 1984-85

Ampani 2x250 500 1989-90 (Washed Away)

Kaho 1x10 10 2004-05

Kebitho 1x30 30 2004-05

Mati Nallah 2x250 500 2004-05

Anjaw District

Yapak Nallah 2x100 200 2005-06

Changlang District Tissue 4x100 400 1986-87

Thiraju 4x250 1000 1978-79 Tirap District

Charju 3x200 600 1984-85

TOTAL CAPACITY 35190

Source: Power Department Arunachal Pradesh

As can be seen from the table above, there are a number of generating stations but the total capacity is

only 35.19 MW. For a state like Arunachal, this is a very low capacity and it needs to be enhanced and

augmented if power is to be made available to all.

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As of now the power situation is not good. Power is not available for the domestic and household

consumption and the status and availability of industrial power is an even bigger area of concern. An

example can be taken from the Industrial Growth Centre at Niglojk. The IGC is ready but there is no power

available for it. This will act as a major deterrent for industry.

• Proposed Infrastructure

There is a lot of hydro potential in the state and many of the projects have already been allotted to various

private developers and Central Public Sector Undertakings. Basin wise Details of the projects identified and

allotted are attached as Annexure. Two Mega Power Projects which are coming up are a 2000 MW NHPC

project in Subansiri Lower and a 600 MW Kameng Hydro Electric Project of NEEPCO. These are expected

to start commercial operations from 2012-13. From these projects, 12% of the total power generated will be

made available to the state. Five years hence, the power situation in the state is expected to improve.

The present plans for augmentation seem adequate provided they are completed within the timelines. Also,

the transmission and distribution systems need to be strengthened. The entire generation should be

interconnected and there should be a state grid for power distribution. Some of the districts are

interconnected e.g. Grid has already reached Ziro, Daporijo & Along during the year 2005 – 06. Besides

132 KV line from Along to Pasighat has been sanctioned during 05-06 and same has been executed during

this year under NLCPR, but the rest of the districts have small generation projects and transmission and

distribution in isolation only. This need to be changed and a state grid should be formed so that the system

is strengthened.

In addition to development of 132 & 220KV EHV lines the state would need to improve and augment its

existing sub-transmission, transformation capacities and distribution networks to handle the increasing

demand of power. These include 33 KV Sub-Transmission lines and 11KV Distribution Systems.


8.5 & 8.6. Table 8.5 segregates the units according to the Investment i.e. as small, medium and large while

Table 8.6 segregates them according to the sector of operation. According to the data provided by NEDFi,

all the units that have registered under NEIIPP 2007 are proposed units.

Table 8.5: Units Registered under NEIIPP 2007 in Arunachal Pradesh

No. of Units Registered Financial Year

Small Medium Large

Total Capital Investment (Rs. in Lakhs)

Total Employment Generated (in nos.)

2007-08 12 - - 5073.74 352

2008-09 21 - - 1964.10 643

Source: Directorate of Industries, Arunachal Pradesh

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Table 8.6: Sectorwise Registration of Units under NEIIPP 2007 in Arunachal Pradesh

Manufacturing Service Total District

Number of

Units


Employment in

nos)

Number of Units

Investment (in

Rs. Lakhs)

Employment in

nos)

Number of Units


Employment in

nos)

Changlang 5 - - - - - 5 - -

Lower Subansiri

- - - 1 44.87 25 1 44.87 25

Papum Pare 8 - - - - - 8 - -

West Kameng - - - 1 - - 1 - -

West Siang 1 - - - - - 1 - -

Total 14 - - 2 44.87 25 16 44.87 25

Source: NEDFi

The data had three units for which sector of operation was not mentioned i.e. a total of 19 units are

proposed to be set up in Arunachal Pradesh and they have all registered themselves under NEIIPP 2007.






subsidies.

Arunachal Pradesh historically was known for its forest and timber based industries. After the Supreme

Court Ban on the felling of trees and use of timber, the entire industry in Arunachal collapsed. Since the

announcement of the 1997 Policy, the state of Arunachal has seen revival of industry which has sped up

after the announcement of the 2007 Policy.

According to the data provided by the Directorate of Industries, 91 Units have come up in the state after

1997. Out of these 91 units 54 have come up from 1997 to 2007. The rest 37 units have come up since the

notification of the 2007 Policy. Thus, NEIIPP 2007 has given a further boost to industrialisation.

District wise Details of the units (this includes units set up before 1997 as well) set up and registered under

the NEIP 1997 and NEIIPP 2007 are given in the table below:

Table 8.7: District wise details of Industrialisation in Arunachal Pradesh

S.No. District No. of units registered

1. Papum Pare 56

2. West Siang 6

3. Upper Subansiri 4

4. Lower Subansiri 3

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S.No. District No. of units registered

5. Lohit 8

6. East Siang 11

7. Tirap 3

8. Lower Dibang Valley 4

9. Upper Dibang Valley -

10. Tawang -

11. East Kameng 1

12. West Kameng 2

13. Upper Siang 1

14. Kurung Kumey 8

15. Changlang 7

16. Anjaw -

TOTAL 114

Source: Directorate of Industries, Arunachal Pradesh

Details of the units set up, for the districts covered during the primary interactions, have been included in

Appendix D.

The Consultants analysed the data on the number of claims made under NEIIPP 2007 in Arunachal

Pradesh and the analysis is presented in the tables below. The tables have been grouped according to the

Schemes available under the Policy and present an overall picture of the status of claims as on 31st March

2010.



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0 2001-2002 0 0 0 0 0 0 2002-2003 0 0 0 0 0 0 2003-2004 3 55 0 0 3 55 2004-2005 1 30 0 0 1 30 2005-2006 3 48 0 0 3 48 2006-2007 2 15 0 0 2 15 2007-2008 11 578 0 0 11 578 2008-2009 8 282 1 952 9 1233 2009-2010 0 0 0 0 0 0

TOTAL 28 1008 1 952 29 1960

Source: NEDFi

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Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 1 0.70 2 1 3 2.07 2001-2002 0 0 1 1 1 0.70 2002-2003 1 0.69 1 1 2 1.37 2003-2004 1 0.71 1 1 2 1.42 2004-2005 0 0 0 0 0 0.00 2005-2006 0 0 1 0 1 0.34 2006-2007 0 0 0 0 0 0.00 2007-2008 0 0 0 0 0 0.00 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

TOTAL 3 2 6 3.80 9 5.89

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0.00 2001-2002 0 0 0 0 0 0.00 2002-2003 0 0 0 0 0 0.00 2003-2004 0 0 0 0 0 0.00 2004-2005 0 0 0 0 0 0.00 2005-2006 0 0 1 15 1 15.31 2006-2007 0 0 0 0 0 0.00 2007-2008 0 0 0 0 0 0.00 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

TOTAL 0 0 1 15.31 1 15.31

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 4 77 0 0 4 77 2001-2002 7 88 0 0 7 88 2002-2003 7 25 0 0 7 25 2003-2004 10 49 1 11 11 61 2004-2005 14 611 1 75 15 687 2005-2006 25 1,551 1 23 26 1573 2006-2007 36 3,116 2 11 38 3127 2007-2008 98 7,014 53 3183 151 10197 2008-2009 0 0 47 4870 47 4870 2009-2010 0 0 0 0 0 0

TOTAL 201 12531 105 8173 306 20705

Source: NEDFi

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the SLC are still pending. Clearance post SLC needs to be sped up so that the policy is smoothly

implemented.

Its only three years since the policy was notified, the socio-economic impact of the policy can not be





Table 8.12: Socio-Economic Indicators of Arunachal Pradesh



2005-06 2.7

GSDP Growth Rate(1999-2000 prices) (Annual) % 2005-06 4.83 GSDP Growth Rate(1999-2000 prices) (4 Years) % 2003-07 8.2 Per Capita Income (1999-2000 prices) Rs. ’000 2005-06 18.4 Growth in Per Capita Income(1999-2000 prices) (Annual) % 2005-06 3.88 Per Capita Income (1999-2000 prices) (4 Years) % 2003-07 1.7 Secondary sector contribution to GSDP % 2005-06 28.27 Contribution of Manufacturing Sector to GSDP % 2005-06 2.53 No. of small scale industrial units No. in ’000 2005-06 0.5 Growth in small scale industrial units (4 Years) % 2005-06 - Total Employment in SSI units No. in ’000 2005-06 4.6 Plant & Machinery investments of SSI units Rs. ’000 Lakhs 2005-06 4.8 Total employment in manufacturing sector (2005) No. in ’000 2005-06 - Total public sector employment No. in ’000 2005-06 - Urbanisation % 2005-06 20.75


In this section, we are evaluating the NEIIPP 2007, on three parameters namely

1. Performance Evaluation

2. Effectiveness Evaluation

3. Process Evaluation

These have been detailed out in the subsequent sections.


discussions and data with the DIC officials and the DI officials i.e. vis-à-vis the industrialisation that has

come up in the State after the Policy.

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The following figure details out the industrialisation pattern in Arunachal Pradesh, Papumpare and West

Kameng Districts since 1997. After April 1997, 241 units have registered themselves which includes units in

the micro and small sector also. Out of these, 139 have registered after the NEIIPP 2007 notification i.e.

after April 2007. In West Kameng, 59 units have registered since 1997 i.e. since the notification of the NEIP

1997 policy. They did not have any separate data for the 2007 Policy.

Figure 8.1: Industrialization Pattern in Papumpare and West Kameng Districts

241

139

59

0

50

100

150

200

250

Papumpare West Kameng

Since 1997

After 2007

Source: DIC-Yupia and Bomdila

Most of the units registered with the DIC of Papumpare district are in the micro and small sector. Also, most

of the units that have registered have either not started operating or have become dysfunctional. Out of the

139 units that have registered themselves with the DIC after April 2007, only 61 are in the MSME Sector.

Out of these 61 units only 32 are functional. Yet Papumpare District has the advantage of having the

capital of the state, Itanagar due to which most of the units come up in this area only. The DIC at Yupia is

monitoring two Industrial Areas Chandan Nagar (has 11 units) and Naharlagun (19 units). They only

provide for sheds which are given on lease. No power connections or any other common facility is provided

to the units. There are roads in the industrial areas which are not maintained. Satyam Group is the biggest

units claiming subsidy under this DIC.

The DIC at Bomdila has 59 units registered with it since the 1997 policy. There is not much industrialisation

in the area because of the difficult terrain. Most of West Kameng District has tourism potential and this

industry can be promoted over there. There are small Industrial Estates at Dirang and Tippi on areas of

about 7-8 Acres. They were developed long back and are not properly maintained. Most of the units set up

under the DIC are very small and into cane & wood furniture.




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According to the discussions at the DI, industry in Arunachal that went into a slowdown after the Supreme

Court ban on timber based industry is now picking up after the announcement of NEIIPP 2007. There are

quite a few units coming up all over the state. Units for Ferro-Alloys, re-rolling, Coke manufacturing,

insulators, steel fabrication units, aromatic plants processing units etc are coming up in the state. Besides

these, to support tourism which is one of the major revenue generating sectors for Arunachal Pradesh,

hotels are coming up as well. Two five star hotels are coming up at Dirang and Tawang. There are hotels

that are coming up in Itanagar as well.

According to the Director of Industries, power deficit and connectivity is a major deterrent for industries not

coming up in the state. They suggested that the Central Government should improve the rail and road

network in the state. There should be rail heads and every district headquarter should be connected

through a State/National Highway. The DI was also of the opinion that the policy is not promoting local

entrepreneurs who are first generation entrepreneurs. In Arunachal’s case they want inter-district to be

included under the purview of the Transport Subsidy Scheme because movement in Arunachal from say

Changlang to Bhalukpong involves movement across the entire of Assam but they can not claim subsidy as

they are finally utilising the raw material in Arunachal only. Also, tea processing units can claim subsidies

under NEIIPP but the finished product i.e. processed tea is not covered under the Transport Subsidy

Scheme. They wanted this to be looked into because this will give a boost to the tea industry in the region.


Awareness of the Policy a major issue for the DICs, there have been no awareness programs. The DIC at

Yupia did not even have a copy of the policy. Also, the Joint Director if Industries was not even aware of

the policy and its issues.

The DIC at Bomdila was however much better with the Assistant Director of Industries having an in-depth

understanding of the policy. They are also promoting the policy and encouraging entrepreneurs to register

their units under NEIIPP.


Entrepreneurs’ were of the opinion that industrialisation in the state is slow due to the lack of adequate

infrastructure. The Industrial Infrastructure is in a bad shape as also the support the infrastructure.

Connectivity and power are two major issues. Lack of proper connectivity increases the transportation

costs and hence the total cost of production. Power situation in the state also requires attention, even

though a lot of projects are planned but their implementation needs to be sped up if Arunachal doesn’t want

to loose out on opportunities. Also Industrial Areas/ Estates with proper common facilities and infrastructure

need to be developed.


In Arunachal Pradesh, State Bank of India is the lead bank. The Credit-Deposit Ratio of banks in Arunachal

is not good. Not many people are opening up new accounts and not many of them are taking loans as well.

As per the State Level Banker’s Committee Meeting of November 2009, high rate of stamp duty and

registration fees for creating Registered Mortgage of land and properties is one of the major factors for

lesser Credit Flow. Many loan proposals are not disbursed even after sanctioning because the borrowers

could not deposit the required amount for completion of the land mortgage formalities.

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This point of high rate of stamp duty was brought up by one of the Entrepreneurs also during our

discussion with them. Although the Industrial Policy provides for 80% exemption from stamp duty yet it’s

acting as a major obstacle in attracting industry which implies that there is an Implementation problem in

the State Industrial Policy.

The effectiveness evaluation helps us in evaluating whether the stated objectives of NEIIPP 2007 policy

have resulted in the expected outcomes and if not; suggest remedial measures for the same.



summarised below.


It was the opinion of DI that NEIIPP 2007 had contributed to industrialisation but only in the medium and


Policy. Usually these units were set up by people who had invested their savings into setting up of units

and had also not availed of any bank financing. The amount that they had invested as capital would be

equivalent to the amount that they need to pay for the Chartered Accountant to make the project report.

These constraints make it difficult for the tiny, micro and small industries to avail NEIIPP 2007 benefits.

Every state has its own natural mineral and other resources. It is also the State Govt who has the greater

understanding of the local needs and constraints. So the State Govt should have a role in the formulation of

checklists that are needed under the policy. This would help in bringing about transparency and the

constraints associated with such difficult terrain, local people with the correct use of its resources


The DIC’s were of the opinion that the NEIP 1997 and NEIIPP 2007 have been responsible for the


provided by the State Govt and more participation from the tiny, micro and small units.







be minimised or done away with.

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DIC Office



DIC




DIPP team




of Industry for SLC

meeting







NEDFi


NEDFi

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112


The DIC level processing time is about 2 months for the application to be forwarded to the Director level.

After that, there is no fixed time for the application to be processed. It would get cleared as and when the

SLC meetings are held.







There is no feedback of the status of applications to the DICs, once it is sent onward to the SLC. Earlier the

minutes of the SLC committee used to reach the DICs, but at present the practice has been discontinued.

This feedback should be provided to the DIC.



would help in appropriate formulation of the state policy and focussing of the NEIIPP 2007 policy leading to



languages and local languages.




representation for the state in the functional committees set up by Govt of India under NEIIPP 2007.


Central Govt.









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Nagaland is a vibrant hill state located in the extreme North Eastern end of

India, bounded by Myanmar in the East; Assam in the West; Arunachal

Pradesh and a part of Assam in the North with Manipur in the south. It is

divided into eleven administrative blocks and is spread over a total area of

16579 square kilometres comprising 6.32 per cent of the whole of North-

east and 0.5 per cent of the total area of India.

The Industrial Policy applicable in Nagaland was formulated in 2000. It was

revised during the year 2004 by the Department of Industries and

Commerce. The salient features of the policy are discussed below.

9.2.1.1 Power subsidy

30% and 25% subsidy for connected loads up to 1 MW and above for a period of 5 years from the date of

commercial production subject to a maximum ceiling limit of Rs 2 lakhs annually.

9.2.1.2 Drawal of power line

Cost of drawal of 33/11KV line to eligible industrial unit shall be reimbursed subject to a ceiling of Rs 2

lakhs.

9.2.1.3 Manpower subsidy

Reimbursement of 25% of the actual wages bill for local tribal employees employed by units for three years

from the date of commercial production subject to ceilings as below

Investment in plant and machinery Ceiling for Manpower Subsidy (Rs per Annum)

From 5 to 25 lakhs 1.00 lakhs

From 25 to 100 lakhs 2.5 lakhs

Above 100 lakhs 5 .0 lakhs

9.2.1.4 Subsidy for Feasibility Study Cost

50% subsidy on the cost of preparation of DPR for new units with an investment of more than Rs. 25 lakhs

in P&M, subject to a maximum ceiling of Rs 1 lakh. The report should be prepared by government

approved consultant.

9.2.1.5 Price Preferences and Exemption of Earnest Money on Govt Store Purchase Programme

Price preference of 15% for all purchases under government store purchase program.

9. Nagaland

Map of Nagaland

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9.2.1.6 Special incentives for 100% EOU units

5% subsidy on capital investment for 100% EOU units subject to a maximum of Rs 3 lakhs.

9.2.1.7 Sales Tax Exemption

100% Sales Tax exemption is available for all new industrial units for a period of 7 years. For EOUs, it’s

available for an additional period of one year.

9.2.1.8 Subsidy for Quality Control Measures

Cost of laboratory equipment for the purpose of quality control and ISI/BIS/ISO 900 certification will be

reimbursed subject to ceiling of maximum Rs 50,000 and Rs 1 lakh for large and medium scale units

respectively.

9.2.1.9 Stamp Duty Exemption

50% stamp duty and registration fee for securing loans from financial institutions including mortgage of

fixed assets shall be exempted for a period of 5 years.

9.3.1.1 Present Status

Industrial Infrastructure in Nagaland is being looked after by the Nagaland Industrial Development

Corporation Limited and the present Industrial Infrastructure in the state consists of the following:

1. Export Promotion Industrial Park (EPIP) at Ganeshnagar

2. Industrial Growth Centre (IGC) at Ganeshnagar

3. SEZ at Ganeshnagar

4. Dimapur Industrial Estate

5. Four Mini Industrial Estates

1. Industrial Growth Centre/ Export Promotion Industrial Park/ SEZ –Ganeshnagar, Dimapur

The same area in Ganeshnagar near Dimapur has been marked as an EPIP, IGC and SEZ. The entire

area is only 50 Ha and there is no internal demarcation separating out the three Industrial Infrastructures as

well. In total, there are 27 sheds and open plots. At present, only one unit by the name of M/s Naga Food

Ltd. is functioning in the entire area.

Road, water, housing, hospital, bank, post office and power facilities are available in the area. A helipad is

also under construction.

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This area is a unique case of improper development of Industrial Infrastructure and misuse of the funds

allocated for the same. Although the Industrial Development Corporation has funds for the development of

EPIP, IGC and SEZ yet they have not been able to utilize them properly and have earmarked the same

area for all three of them. If this is how infrastructure is being developed, the role of NIDCO needs to be

looked into as well. Also, even after developing all the three in the same area, they have not been able to

attract industry and there is only one unit that is operating out of the entire area.

2. Dimapur Industrial Estate

The Dimapur Industrial Estate is located with in the town of Dimapur on an area of 30 Acres. There are 27

sheds in the estate. Out of these, 19 plots are allotted to the entrepreneurs of whom only three units are

operational. These units are in the field of plastic processing, potable water and furniture manufacturing.

The remaining sheds are occupied by CRPF.

3. Mini Industrial Estates

There are four mini industrial estates in the state namely-

Mini industrial estate at Tizet, Mon district developed on 60 acres of land. There are 6 plots in the estate

and none of them have by far been allotted.

Mini industrial estate at Kiphere, Kiphere district developed on 50 acres of land. There are 6 plots in the

estate and none of them is allotted.

Mini industrial estate at Noklak, Tuansang district developed on 60 acres of land. There are 6 plots in

the estate and none of them have by far been allotted

Mini industrial estate at Longling, Longling district developed on 60 acres of land. There are 6 plots in

the estate and none of them have by far been allotted

9.3.1.2 Proposed

The Government of India has recently approved for setting up of two Special Economic Zones in Nagaland.

One of them will be an Agro & Food Processing Special Economic Zone (SEZ) at Ganeshnagar near

Dimapur. The SEZ spreading over 50 Hectares would provide industrial plots as well as ready built

Standard Design Factories, State of the art and environment friendly industrial infrastructure and facilities,

Convention Centre with hi-tech communication services and all benefits of SEZ’s. Besides a multi product

SEZ as promoted by HN Company is coming up on the outskirts of Dimapur spread over 400 hectares.

An Integrated Infrastructural Development Centre(IIDC) at Kiruphema which is located on Dimapur –

Kohima National Highway is being planned .It is spread over an area of 50 acres and was expected to be

completed by March 2009 but work is still under way.

Another IIDC at Longnak in Mokokchung District is being envisaged for which land has already been

acquired. Appraisal of the project is underway. NIDC is the implementing agency for both the projects.

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9.3.2.1 Power

The state’s installed generation capacity is 27.84 MW. As the internal generation of the state is quite low,

the state is dependent on Central Sector’s power allocation. Nagaland continues to face acute power

shortage without any improvement. As per the department of electricity, total peak hour demand of

electricity in the state is around 95 MW. The state is purchasing around 60 MW of power from the centre.

The demand supply scenario in the state is depicted in the figure below

Figure 9.1: Electricity Demand-Supply in Nagaland

-20

0

20

40

60

80

100

In MW

Series1 95 87.84 -7.16

Demand Supply Gap

Source: State Electricity Department

Electricity consumption in the Industrial sector

Electricity consumption in the industrial sector accounts for only 10% of the total consumption. Average

consumption of power by the industries during the last five years was 0.01 MKWH per industry per year. It

indicates that the industry present in the state is mainly in the micro and small scale sector and there has

not been much of industrial growth in the state.

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Figure 9.2: Electricity Consumption in the Industrial Sector

21.51

5.9

21.51

4.74

11.3

12.79 12.79

16.02

12.52 12.79

0

5

10

15

20

25

2001-2002 2002-2003 2003-2004 2004-2005 2005-2006

Consumption in MKWH No. of Consumers in 00


Proposed Projects

The State Electricity Department has identified various potential Hydro Projects and three most viable

projects based on demand and locational analysis are 150 MW Tizu-Zungki HEP (Kiphire), 140 MW Dikhu

HEP (Mon/Longleng) and 40 MW Yangyu HEP (Mon/Longleng).The proposals of the Kiphire and Longleng

projects are now under consideration at government level and proposal is to develop them under joint

venture with private firms. The Department has also identified about 72 small and micro hydro projects in

the state which they intend to develop in phases.

9.3.2.2 Road Connectivity

The state is connected with other states of the NER through National Highway numbers 155, 150, 61, 39

and 30. As per the department, roads are in a bad shape because there are no contractors ready to work in

the state. The present road network in the state is given in the table below

Table 9.1: Present Status of Road Network in Nagaland

S.No Category Length (in km)

1. Border Roads 227

2. National Highways 599

3. State Highways 974

4. Major Roads 857

5. Other Roads 2407

6. Village Roads 5419

Total Road Length 10483

Source: PWD

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9.3.2.3 Rail & Air Connectivity

The state is connected with broad gauge rail line with other parts of the NER. Dimapur is the main rail head

of the state having all facilities for loading and unloading of goods. The total length of broad gauge line is

12.84 km.

Dimapur Airport is the only airport located in Nagaland. It is at a distance of 7 km from Dimapur City. Major

domestic carriers like Indian Airlines, Kingfisher Airlines, Spice Jet, and Jet Airways have flights operating

and connecting Dimapur to Guwahati, Kolkata and Delhi.

There are 5 units that are availing subsidy under the CCIS Scheme in Nagaland, which implies that they

are the ones that have registered under NEIIPP 2007. The details of the units are given in the table below:

Table 9.2: Units Availing Subsidy in Nagaland

S.No. Name of the Unit District Status Sector Proposed Investment

(Rs. in Lakhs)

Proposed Employment (in numbers)

1. Oriental Nursing home Dimapur Existing Service - -

2. Carewell Nursing Home Dimapur Existing Service - -

3. Nokenwar Wood Working Unit

Dimapur Proposed Manufacturing

125 67

4. New Tech Bottling Plant Dimapur Proposed Manufacturing

168.97 33

5. Woodland Nursing Home Mokokchung Proposed Service 491.81 48

6. J.K. Hospital cum Research Centre

Dimapur Existing (Expansion)

Service 574.80 -

Source: NEDFi






subsidies.

The table below lists out the Intentions of setting up of units in Nagaland, as available from the data

provided by NEDFi. Details of the districts visited have been incorporated in Appendix E.

Table 9.2: Investment Intention as per IEM Part-I & II in Nagaland

S.No. Name of Unit Product Manufactured Production Capacity

1. Viraja Steel & Power (P) Ltd Sponge Iron 30,000 MT

2. Tiru Cola Project (JV) Mining & Agglomeration of Coal 500,000 MT

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Source: NEDFi

The Consultants analysed the data on the number of claims made under NEIIPP 2007 in Nagaland and the


available under the Policy and present an overall picture of the status of claims as on 31st March 2010.



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0.00 2001-2002 0 0 0 0 0 0.00 2002-2003 0 0 0 0 0 0.00 2003-2004 0 0 0 0 0 0.00 2004-2005 120 104 6 3 126 106.50 2005-2006 0 0 0 0 0 0.00 2006-2007 0 0 0 0 0 0.00 2007-2008 0 0 204 451 204 450.90 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

TOTAL 120 104 210 453.68 330 557.41

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0 2001-2002 0 0 0 0 0 0 2002-2003 0 0 0 0 0 0 2003-2004 0 0 0 0 0 0 2004-2005 0 0 0 0 0 0.00 2005-2006 0 0 1 0 1 0.34 2006-2007 0 0 0 0 0 0.00 2007-2008 0 0 0 0 0 0.00 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

TOTAL 0 0 0 0 0 0

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0.00 2001-2002 0 0 0 0 0 0.00 2002-2003 0 0 0 0 0 0.00

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Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2003-2004 0 0 0 0 0 0.00 2004-2005 0 0 0 0 0 0.00 2005-2006 0 0 0 0 0 0.00 2006-2007 0 0 0 0 0 0.00 2007-2008 0 0 0 0 0 0.00 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

TOTAL 0 0 0 0 0 0.00

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 90 682 1 2 91 684 2001-2002 79 551 7 31 86 582 2002-2003 46 276 2 17 48 293 2003-2004 105 869 1 6 106 875 2004-2005 131 1175 12 108 143 1282 2005-2006 134 1514 98 705 232 2219 2006-2007 10 196 14 132 24 328 2007-2008 0 0 0 0 0 0 2008-2009 0 0 0 0 0 0 2009-2010 0 0 0 0 0 0

TOTAL 595 5263 135 1001 730 6264

Source: NEDFi



implemented.






Table 9.7: Socio-Economic Indicators of Nagaland



2004-05 5.2

GSDP Growth Rate(1999-2000 prices) (Annual) % 2004-05 6.65 GSDP Growth Rate(1999-2000 prices) (4 Years) % 2003-07 6.2 Per Capita Income (1999-2000 prices) Rs. ’000 2004-05 18.1 Growth in Per Capita Income(1999-2000 prices) (Annual) % 2004-05 1.05

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Per Capita Income (1999-2000 prices) (4 Years) % 2003-07 0.4 Secondary sector contribution to GSDP % 2004-05 14.01 Contribution of Manufacturing Sector to GSDP % 2004-05 1.49 No. of small scale industrial units No. in ’000 2006-07 0.717 Growth in small scale industrial units (4 Years) % 2004-05 7.8 Total Employment in SSI units No. in ’000 2006-07 13.5 Plant & Machinery investments of SSI units Rs. ’000 Lakhs 2004-05 26.3 Total employment in manufacturing sector (2005) No. in ’000 2004-05 2.8 Total public sector employment No. in ’000 2004 74.3 Urbanisation % 2004-05 17.74



discussions and data with the DIC officials, the DI officials and local entrepreneurs.



summarised below.


In Nagaland, the cultural practice has been the use of cash for transactions. Non acceptance of this has

negatively impacted on the policy application. As per Director of Industry, the performance of the policy is

not satisfactory due to this reason.


Industrial Infrastructure in Nagaland is adequate. Most of the industrial estates are lying vacant. There is

acute power shortage. In addition there is no marketing material like booklets, leaflets about NEIIPP 2007

on display in DICs. Also information related to the claims should also be made available at the DIC office.

The officers of DIC are not aware about the schemes. There should be awareness programs for the

officials of the department, organized by the Directorate of Industry. Officials from NEDFi should also

participate in the awareness programs and the following issues can be discussed:

• Benefits of NEIIPP 2007

• Steps involved in processing of claims

• Guidelines for filling up the forms-Scheme wise

• Documents required to be submitted along with the claim form

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3. Entrepreneurs who availed of NEIIPP 2007 Subsidies

Entrepreneurs want exemption from payment through DD/cheque formality for purchase of fixed assets at

least for a short term grace period specially entrepreneurs who are in the service industry that is those who

have already set up or are in the process of setting up hotels or hospitals. For them their building is

considered as part of the assets for the Capital Investment Subsidy and during the construction phase

wages are paid to the labourers in cash and not through cheques.

They also felt that the DIC staff should have complete knowledge about the policy with marketing material

available in local languages to encourage wider publicity.


State Bank of India is the lead bank in Nagaland. The bank did not have a copy of NEIIPP 2007 document

and was not aware of the various subsidies and detailed procedures and because they are unaware of the

same, they are also not able to recommend it to their customers.




notifications

There is a lot of overlap of the NEIIPP Policy and its subsidies with the incentives announced by the Govt

of Nagaland like Incentives on fixed capital investment (there is a provision of 5% in state policy). An

Industrial Unit should be able to avail of subsidies under one policy only, either the central policy or state

level policy. The State policy is due for revision and the revision should take note of the overlapping areas

and try for removal of the same. It was interesting to note that the Interest Subsidy and Comprehensive

Insurance and Transport Subsidy registers were not available for perusal. It is only CCIS that has the

recorded claimants.



summarised below.


• Industry department should have detailed knowledge about the policy.

• There should be single window system for clearance of NEIIPP 2007 claims

• One officer should be assigned for claim handling under NEIIPP 2007 scheme.

• There should be awareness program for entrepreneurs.

��

��/MCD/ISA/0�/0� 0� December �0�0P:\Noida\DMC\Projects\��-NEDFi NEIIPP Impact Evaluation\Report\Final Report\NEIIPP Final Report 0��0.doc


123









designed and used.



DIC Office


by DIC



DIPP team




meeting








NEDFi


123









designed and used.



DIC Office


by DIC



DIPP team




meeting








NEDFi


123









designed and used.



DIC Office


by DIC



DIPP team




meeting








NEDFi

Money coming in fromDIPP disbursed through

NEDFi


123









designed and used.



DIC Office


by DIC



DIPP team




meeting








NEDFi

As per the DIC officials, an average of one month is required for physical verification and finalisation of claims at DIC level. This time is however not fixed and varies according to the availability of the staff as well.

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124


As per the DIC officials, an average of one month is required for physical verification and finalisation of

claims at DIC level. This time is however not fixed and varies according to the availability of the staff as

well.

There is no feedback on the status of applications to the DICs, once it is sent onward to the SLC. This

results in the Entrepreneur going to the Directorate of Industry to understand the status of the application.






• Training should be given to the DI and DIC staff dealing with the NEIIPP policy.

• There should be a single window clearance system for NEIIPP 2007.


local languages.


improving the infrastructural facilities like road, electricity and law and order problem by the State Govt

should be adopted.

• There is no feedback of the status of applications to the DICs, once it is sent onward to the SLC. This

should be incorporated into the system.

• Information about the status of claims should be made available online.

• Physical verification should be done by a technically qualified person more so in the case of service

industry.

• In physical verification process one representative from NEDFI branch office should also participate.

• There should be a budget allocation for awareness programmes for the DICs.

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Manipur is encircled by nine hills ranges on all sides. The state has a 352 km

long international border with Myanmar to the south-east and is bound by

Nagaland on the north, Cachar district of Assam on the west and Chin Hills

(Myanmar) and Mizoram on the south-west and Surma Tract and Upper

Chindwin of Mayanmar on the east. As per Census 2001, the state has 33

towns (28 statutory towns and 5 census towns) and 2391 villages (2315

inhabited and 76 uninhabited).

Manipur doesn’t have a recent Industrial Policy. The Industrial Policy

applicable as of now in the state was formulated in 1996. New Industrial Policy

has been drafted by it is still not approved by the Cabinet. In this section we

have listed down the various subsidies and incentives available in both the

1996 and the proposed 2010 Industrial Policy.

10.2.1.1 Allotment of land

The Cost of Land is subsidised by the State Government as following:

In existing 1996 policy Proposed in 2010 policy

25% for SSI units

30% for EOU and units owned and managed by

weaker section

15% for Large and Medium units

No change proposed

10.2.1.2 Allotment of sheds to SSI units

Subsidy on monthly rentals, for a period of 5 years from the date of occupation of shed, for sheds allotted

as per the following:


50% for entrepreneurs of all categories

55% in case of EOU and units owned and set up by

the weaker section.

No change proposed

10.2.1.3 Manpower development

Subsidy for Industrial Units which get their workers trained from government recognised technical

training/reputed training institute and/or with established industrial concerns


50% of actual expenditure or Rs 3500 per trainee

whichever is less

50% of actual expenditure subject to a maximum of Rs

4000.

10. Manipur

Map of Manipur

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127


60% of actual expenditure subject to a ceiling of Rs

4000 in case of units managed by weaker sections and

EOUs.

10.2.1.4 State Capital Investment Subsidy

Subsidy is provided by the State Government for investment in Plant & Machinery as per the following:


15% subject to a ceiling of Rs 15 lakhs

For EOUs subsidy is 20% subject to maximum of Rs

20 lakhs.

Uniform Capital investment subsidy available to all eligible

new and existing unit ,including service sector @30%

10.2.1.5 State Transport Subsidy


Transport subsidy admissible for transportation of

raw material by surface from Kolkata/Patna/Siliguri

or any location of the North Eastern Region to the

industrial unit in the state.

Transport subsidy is also available for transport of

finished products by surface from industrial unit

located in Manipur to Siliguri. Transport subsidy for

finished products also available on case to case

basis from the unit to Kolkata/ Patna.

For EOUs, subsidy for the finished products is

available from the unit to the last shipping point.

Transport subsidy on raw material or finished

products is available, if value addition on the raw

material is above 25%.

Transport subsidy for raw material is admissible for

only such quantity which is over and above the

locally available quantity and which is essential for

full capacity utilisation.

Maximum admissible amount for transport subsidy in

case of raw material and finished products together

will be the actual cost as per government approved

rate or Rs 30 lakhs per annum, whichever is less.

Subsidy @100% for surface transport and upto 75%

for air transport (maximum Rs 1 lakhs by air cargo) is

admissible to Manipur Industrial Development

Corporation Ltd, Manipur Electronic Development

Corporation Ltd, and Manipur Handloom Weavers

Co –operative Society Ltd.

Transport subsidy will be available for transport of raw

material and finished goods from any place of the state

exceeding a distance of 70 km by shortest

roadways/waterways.

Transport subsidy will available for transport of raw material

and finished goods by surface from Kolkata, Guwahati,

Dimapur and Silchar or any location of the NER to the units

located in the state.

For EOUs, subsidy for the finished products will be available

from the unit up to last shipping point.

Maximum amount of the transport subsidy in case of raw

materials and finished products together will be the actual

transport cost as per the Government approved rate or Rs 35

Lakhs per annum, whichever is less.

Subsidy @90% for surface transport and upto 75% for air

transport (maximum Rs 1 lakhs by air cargo) will be available

for the transport of the products/ items for participation in

exhibition, trade expo, trade fairs etc.

10.2.1.6 Interest Subsidy


5% and 7% per annum interest subsidy on working

capital and term loan respectively for Small Scale Units

To be available for all units, irrespective of the scale of operations.

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and units managed by weaker section /EOUs for 5 years

from the date of commercial production.

10.2.1.7 Power Subsidy


Power subsidy is available to SSI units for the first five

year from the date of commercial production of the unit

at the rates fixed by the government from time to time.

50% of the cost incurred on linking of power from the

main line to the factory shed will be subsidised subjected

to a ceiling of Rs 50000/-per unit for such units which are

not provided land in developed industrial areas. In case

of weaker section and EOUs the subsidy will be 50%

subject to a maximum of RS.55000/- per unit.

25% subsidy will be admissible for purchase of diesel

generating sets of 10 H.P. or more subject to a ceiling of

Rs.30000. In case of weaker section and EOUs the

subsidy shall be 30% subject to a maximum of

Rs.36,000.

Subsidy will be available for a period of 5 years

Connected load up to 1 MW will be entitled for rate

subsidy @ 30% with a ceiling of Rs 10 lakhs per annum

Connected load above 1 MW will be entitled for rate

subsidy @ 25% with a ceiling of Rs 25 lakhs per annum

50% of the cost incurred on linking of power from the main

line to the factory shed will be subsidised subjected to a

ceiling of Rs 55,000/-per unit for such units which are not

provided land in developed industrial areas. In case of

weaker section and EOUs the subsidy will be 55% subject

to a maximum of Rs.60,000 per unit.

30% subsidy will be admissible for purchase of diesel

generating sets of 10 H.P. or more subject to a ceiling of

Rs.1.5 lakhs for manufacturing sector. In case of weaker

section and EOUs the subsidy shall be 30% subject to a

maximum of Rs.1.75 lakhs.

10.2.1.8 Subsidy for feasibility study and project report preparation


A subsidy of 50% is available to meet the cost of

feasibility study and project report preparation

subject to a maximum ceiling of Rs.25000/ in each

case. The study/report should be prepared by an

approved consultant registered either with the

government of Manipur or the government of India.

This subsidy is available for the units managed by

weaker section and EOUs @60% subject to a ceiling

of Rs.30, 000/.

No change proposed from the previous policy.

10.2.1.9 Subsidy for technical know-how


A subsidy of 50% and 60% (units managed by weaker

section and EOUs units) is available to meet the cost of

technical know-how obtained by SSI units from

organisations approved in advance by government of

Manipur. The subsidy will be released only on

commencement of commercial production.

A subsidy of Rs 100000 will be available for technical know

how for micro ,small and medium enterprises

A subsidy of 60% for units managed by weaker section and

EOUs is available

10.2.1.10 Price preferences

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Government Departments to accord first priority to

products manufactured by industrial units registered

with the DICs or Directorate of industry. Such units

will be given a price preference of up to 20% over

the lowest technical and commercial rate offered by

others.

Same as mentioned in 1996 policy

10.2.1.11 Reimbursement and exemption of local sales tax


All units manufacturing goods in the state will be entitled to exemption

of 99% of tax payable under the Manipur Value Added Tax Act

subject to the limits mentioned below

Category Micro Small Medium and

Large

New 7 years subject

to max 200% of

fixed capital

investment

7 years subject

to max 150% of

fixed capital

investment

7 years subject

to max 100% of

fixed capital

investment

Substantial

Expansion

7 years subject

to max 150 % of

fixed capital

investment

7 years subject

to max 100% of

fixed capital

investment

7 years subject

to max 90% of

fixed capital

investment

Manipur Industrial Development Corporation

(MANIDCO) will be eligible for reimbursement

of sales tax on sale of raw material.

For individual units purchasing raw material

directly, a concessional rate of 4% of value of

raw materials is available.

Sales tax on goods manufactured by the

industrial units will be exempted in full for a

period of 10 years from the date of

commercial production. However, the period

of eligibility will be extended for 2 year in

case of weaker section will the approval of

state government.

The Manipur Handloom and Handicraft

Development Corporation and Manipur State

Handloom Weavers Co-operative Society is

eligible for reimbursement of sales tax on

handicraft products

In case of micro enterprises if cost of land purchased is upto 40% of

total investment in plant and machinery ,it can be included as part of

fixed capital investment

10.2.1.12 Reimbursement of stamp duty & registration fee


Full Stamp Duty and Registration Fee

reimbursement for Small scale, village and cottage

industrial units subject to the condition that the

assets mortgaged would not be transferred for a

period of 5 years.

Same as mentioned in 1996 policy

10.2.1.13 Quality control


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130


25% subsidy for purchase of testing equipments

for SSI units.

30% subsidy for purchase of testing equipments

for EOUs and for units set up by the weaker

section

Registration fee and annual fee with BIS etc. will

be reimbursed in full for the first 5 years

75% subsidy for purchase of testing equipments for SSI units.

80% subsidy for purchase of testing equipments for EOUs and

for units set up by the weaker section

Registration fee and annual fee with BIS etc. will be reimbursed

in full for the first 5 years

10.2.1.14 Subsidy of modernisation/expansion/diversification


State capital investment subsidy of 15% or Rs 1.00

lakhs whichever less on the purchase of plant and

machinery.

A subsidy of 5% Per annum is available on interest

in respect of loan raised from financial institution

up to a maximum limit of Rs.0.80 lakhs per year for

a period of 5 years.

State capital investment subsidy of 30% or Rs 5.00 lakhs

whichever is less, for the purchase of plant and machinery.

A subsidy of 5% Per annum is available on interest in respect of

loan raised from financial institution up to a maximum limit of

Rs.0.80 lakhs per year for a period of 5 years.

Utilisation of 60% of the installed capacity is necessary to qualify

for diversification subsidy.

10.2.1.15 Special scheme for the development of handicraft


Not available

State government will provide developed land with buildings in

cluster with common facilities

50% subsidy to handicraft units located in rural areas for

construction of work shed/store room to the extent of Rs 10000

each

Units employing between 20 to 50 artisans will be entitled to 50%

concession on floor space rentals or Rs 12,000 per year whichever

is less for a duration of two years

Units employing between 50 to 100 artisans will be entitled to 50%



Units employing more than 100 artisans will be entitled to 50%



10.2.1.16 Exemption of earnest money and security deposit


Not available Micro and small enterprises located in the state will be exempted

from payment of earnest money and security deposits for items for

which they have filled part –II of the entrepreneurs memorandum

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10.2.1.17 Reimbursement of fee /registration fee/ renewal fee for registration with the office of the

Controller General of Patents, Designs & Trade Marks (CGPDTM)


Not available Micro and small enterprise/ individual/ organisation/association etc

will be reimbursed in full for the amount paid towards

fee/registration fee, for getting patent, trade marks, designs and

geographical indications to CGPDTM ,Government of India

10.2.1.18 Reimbursement of registration fee /renewal fee for obtaining BIS, ISI, ISO series and FPO


Not available Micro and small enterprise will be reimbursed in full the amount paid

for registration fee / renewal fee in getting BIS/ISI/, ISO, AGMARK

and FPO for a period of five years.

10.2.1.19 Special incentives for mega projects


Not available All incentives including land allotment ,subsidy and tax concessions

under policy will be relaxable on case to case basis for Mega

projects

Due to lack of industrial growth in the state, the Industrial Infrastructure is limited to just one Industrial

Estate. The details of existing and proposed industrial infrastructure is mentioned below

10.3.1.1 Existing

Tikyel Industrial Park

The only Industrial Park in the state is located at Imphal spread on an area of 50 acres. It has 40 sheds

which are totally occupied i.e. they have been allotted. However, only 12 units are operational as of now.

Most of the sheds are allotted to government organisations. The operational units are mainly engaged in

plastic processing and that too at very low levels of recycling, crushing etc.

10.3.1.2 Proposed

Food Park

A Food Park is being implemented at Nilakuthi (Imphal) by Manipur Food Industries Corporation Ltd. It is

under construction on an area of about 31 acres of land with a project cost of Rs 1361.45 lakhs. The state

government is planning to upgrade the proposed food park into Mega Food Park. There will be 50 plots of

600 sq m in the park. The park will also have common facilities like cold storage, warehousing, quality

control lab, weight bridge, post office, bank, water and power supply.

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10.3.2.1 Power

Power supply in Manipur depends entirely on the share of power allocated from the central sector plants

namely Loktak Hydro Electric Plant, Kopili-Khangdong Hydro Electric Plant, Assam Gas Based Power

Plant at Kathalguri and Agartala Gas Turbine Power Plant at Ramchandranagar, Eastern Regional

Electricity Board, Meghalaya State Electricity Board, Ranganadi Hydro Electricity Plant and Doyang Hydro

Electric Plant and North Eastern Region. The electricity condition in the state is poor. There is a huge

demand supply gap in the state which is covered up by load shedding. As per the department of electricity

the average load shedding is around 2 hrs.

Figure 10.1: Electricity Demand and Supply in Manipur

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Electricity consumption in Industrial sector in the state

Electricity consumption by industries in the state is represented in the figure below :

Figure 10.2: Electricity Consumption in Manufacturing Sector

Roads are the lifeline of the state as the only means of transport for the state is surface communication.

National Highway No 39 runs through Mao in the extreme north of Manipur to the international border of

Moreh. It connects the state with Imphal and Dimapur in the neighbouring state of Nagaland. There are

In M W

129 142 156 172 189

116 140 155 145

97 8793

109106

108115 110 110

-83-55 -63 -63 -35

-45-25-8-32

-150

-100

-50

0

50

100

150

200

250

300

350

1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Demand Supply Gap


in kwh

95.39

80.01 80.43 81.53

85.4788.59

70

75

80

85

90

95

100

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08


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frequent landslides on the route due to which the cost of transportation is very high. NH 53 connects Imphal

with Jirighat in Manipur Assam boarder. The details of road network are given in the following table

Table 10.1: Present Status of Road Network in Manipur


1. National Highway 959

2. State Highway 982.39

3. Major District Road 1197.23

4. Other District Road 1012.91

5. Inter Village Roads 7274.48

Total length 11426.01

Source: PWD






subsidies.

According to data on IEM Part I & II provided by NEDFi only one unit has indicated intention to set up unit

in the state. Amolak Automotive Private Limited has indicated an intention to set up an Automotive

Components unit with a production capacity of 2101 MT. Data for units set up after 1997 was not available

for the state. Details of the districts visited during the study have been incorporated in Appendix F.

The Consultants analysed the data on the number of claims made under NEIIPP 2007 in Manipur and the


available under the Policy and present an overall picture of the status of claims as on 31st March 2010.



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0.00 2001-2002 0 0 0 0 0 0.00 2002-2003 0 0 0 0 0 0.00 2003-2004 0 0 0 0 0 0.00 2004-2005 0 0 0 0 0 0 2005-2006 0 0 0 0 0 0.00 2006-2007 0 0 0 0 0 0.00 2007-2008 0 0 1 83 1 83 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

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Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

TOTAL 0 0 1 83 1 83

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0 2001-2002 0 0 0 0 0 0 2002-2003 0 0 0 0 0 0 2003-2004 0 0 0 0 0 0 2004-2005 0 0 0 0 0 0.00 2005-2006 0 0 1 0 1 0.34 2006-2007 0 0 0 0 0 0.00 2007-2008 0 0 0 0 0 0.00 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

TOTAL 0 0 0 0 0 0

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0.00 2001-2002 0 0 0 0 0 0.00 2002-2003 0 0 0 0 0 0.00 2003-2004 0 0 0 0 0 0.00 2004-2005 0 0 0 0 0 0.00 2005-2006 0 0 0 0 0 0.00 2006-2007 0 0 0 0 0 0.00 2007-2008 0 0 0 0 0 0.00 2008-2009 0 0 0 0 0 0.00 2009-2010 0 0 0 0 0 0.00

TOTAL 0 0 0 0 0 0.00

Source: NEDFi



Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2000-2001 0 0 0 0 0 0 2001-2002 0 0 0 0 0 0 2002-2003 0 0 0 0 0 0

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Total

Claim



Lakhs)

Number of Claims


Lakhs)

Number of Claims


Lakhs)

2003-2004 0 0 0 0 0 0 2004-2005 2 114 0 0 2 114 2005-2006 1 136 0 0 1 136 2006-2007 2 117 0 0 2 117 2007-2008 4 206 0 0 4 206 2008-2009 0 0 2 206 2 206 2009-2010 0 0 0 0 0 0

TOTAL 9 573 2 206 11 779

Source: NEDFi



implemented.






Table 10.6: Socio-Economic Indicators of Manipur



2006-07 5.5

GSDP Growth Rate(1999-2000 prices) (Annual) % 2006-07 11.10 GSDP Growth Rate(1999-2000 prices) (4 Years) % 2003-07 15.3 Per Capita Income (1999-2000 prices) Rs. ’000 2006-07 19.6 Growth in Per Capita Income(1999-2000 prices) (Annual) % 2006-07 9.33 Per Capita Income (1999-2000 prices) (4 Years) % 2003-07 13.6 Secondary sector contribution to GSDP % 2006-07 41.80 Contribution of Manufacturing Sector to GSDP % 2006-07 5.96 No. of small scale industrial units No. in ’000 2005-06 10.3 Growth in small scale industrial units (4 Years) % 2006-07 0.9 Total Employment in SSI units No. in ’000 2005-06 53.7 Plant & Machinery investments of SSI units Rs. ’000 Lakhs 2005-06 4.3 Total employment in manufacturing sector (2005) No. in ’000 2006-07 1.8 Total public sector employment No. in ’000 2005-06 60.6 Urbanisation % 2006-07 25.11


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discussions and data with the DIC officials, the DI officials and local entrepreneurs.



summarised below.


In Manipur, the cultural practice has been the use of cash for transactions. Non acceptance of this has

negatively impacted on the policy application. The awareness among the DI staff about the NEIIPP 2007 is

negligible. No document about the NEIIPP 2007 scheme is available.


There is acute power shortage. In addition there is no marketing material like booklets, leaflets about

NEIIPP 2007 in display in DICs in English or in local language. The officers of DIC are not fully

knowledgeable about the NEIIP 2007 schemes. There should be an awareness program with in the

industry department by the Directorate of Industry. As per the DIC officials information related to the claims

should be available at DIC office and there should be fund available for awareness program of NEIIPP

2007. Officials from NEDFi should also participate in the awareness program. In the awareness program

following issues can be taken up

• Benefits of NEIIPP 2007

• Steps involved in processing of claims

• Guidelines for filling up the forms-Scheme wise

• Documents required to be submitted along with the claim form


The entrepreneurs want exemption from payment through DD/cheque formality for purchase of fixed assets

at least for a short term grace period specially entrepreneurs who are in the service industry that is those

who have already set up or are in the process of setting up hotels or hospitals. For them there building is

considered as part of the assets for the Capital Investment Subsidy and during the construction phase

wages are paid to the labourers in cash and not through cheques.

They also felt that the DIC staff should have complete knowledge about the policy with marketing material

available in local languages to encourage wider publicity.

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State Bank of India is the lead bank in Manipur. The bank did not have a copy of NEIIPP 2007 document.

They were aware of the policy but according to them there has been not much impact of the policy in the

state due to the less industrialisation.




notifications

There is a lot of overlap of the NEIIPP Policy and its subsidies with the incentives announced by the Govt

of Manipur like Incentives on fixed capital investment (there is a provision of 5% in state policy). An

Industrial Unit should be able to avail of subsidies under one policy only, either the central policy or state

level policy. The State policy is due for revision and the revision should take note of the overlapping areas

and try for removal of the same. It was interesting to note that the Interest Subsidy and Comprehensive

Insurance and Transport Subsidy registers were not available for perusal. It is only CCIS that has the

recorded claimants.


For the effective evaluation of NEIIPP 2007 policy, feedback from the different stakeholders is summarised

below.


• Industry department should have detailed knowledge about the policy.

• There should be single window system for clearance of NEIIPP 2007 claims

• One officer should be assigned for claim handling under NEIIPP 2007 scheme.

• There should be awareness program for entrepreneurs.








designed and used.

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Table 10.7: NEIIPP Process


DIC Office


by DIC



DIPP team




meeting








NEDFi

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• Training should be given to the DI and DIC staff dealing with the NEIIPP policy.

• There should be a single window clearance system for NEIIPP 2007.


local languages.


improving the infrastructural facilities like road, electricity and law and order problem by the State Govt

should be adopted.

• There is no feedback on the status of applications to the DIC’s, once they are being sent onward to the

SLC. This should be incorporated into the system.

• Information about the status of claims should be made available online.

• Physical verification should be done by a technically qualified person more so in the case of service

industry.

• In physical verification process one representative from NEDFI branch office should also participate.

• There should be a budget allocation for awareness programmes for the DICs.






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The state is located in the south western corner of the North Eastern Region. It

has an area of around 10491.69 Sq Km. It is surrounded by Bangladesh on its

North, South and West and Assam and Manipur on its East. At present the state

has 4 districts, 17 sub-divisions, 40 blocks and one Tribal Autonomous District

Council (TTAADC).TTAADC covers around two-third of the total area of the state.

The present Industrial Policy of the state is known as Tripura Investment

Promotion Incentive Scheme 2007. The 2007 scheme is applicable to all micro,

small medium and large enterprises which commence commercial production in

the state between 1st April 2009 and 31st March 2012, in private sector, co-

operative sector, self help group, joint sector and also companies owned or

managed by the state government.

The following incentives are available for the units located in the state

11.2.1.1 Incentive on Fixed Capital Investment for Land and Civil Work

30% of the fixed capital investment for land and civil work, subject to an aggregate ceiling of Rs. 50

lakhs.

Sole proprietorship units belonging to ST, SC and women will be eligible for additional 2.5% on

investment in land and civil work, subject to an aggregate ceiling of Rs. 50 lakhs.

11.2.1.2 Procurement Preference

Preference will be given on all purchases by state government agency –including departments,

corporations/public sector enterprises /autonomous bodies /aided institutions of the state government to

products manufactured in Tripura by eligible enterprises if they are registered /acknowledged through EM

Part-II.

11.2.1.3 Re-imbursement of Commodity Taxes

Industrial units commencing commercial production in Tripura shall be eligible for reimbursement of

commodity taxes including Tripura Value Added tax, Central Sales Tax, and Purchase Tax paid by the

enterprises either for inputs or for finished products for a period of five years from the date of

commencement of commercial production of that enterprise, even if the five year period extends beyond

31st March 2012.

11.2.1.4 Re-imbursement of Power Charges

All eligible enterprises will be allowed partial reimbursement of industrial power charges paid to TSECL or

an approved agency for five years. The incentives will be available on yearly basis as below:

11. Tripura

Tripura Map


141
















lakhs.







Part-II.






31st March 2012.




11. Tripura

Tripura Map


141
















lakhs.







Part-II.






31st March 2012.




11. Tripura

Tripura Map

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Year Incentive Maximum Amount Ceiling

1st 25% of power charges 7.5% of annual turnover

2nd 20% of power 6.5% of annual turnover

3rd 15% of power charges 4.5% of annual turnover

4th 10% of power charges 3.0% of annual turnover

5th 5% of power 1.5% of annual turnover

Partial reimbursement pf power charges for any year shall not exceed Rs 12 lakhs

11.2.1.5 Re-imbursement of Interest Paid

All eligible enterprises will be reimbursed 3% of the interest paid to bank/financial institutes for term loans

available for 5 years from the date of commercial production, provided that the enterprises have no interest

liabilities overdue to the bank/financial institute and further to a ceiling of 10% of the annual turnover for the

relevant year or Rs. 1Lakh per year whichever is less.

11.2.1.6 Re-imbursement of Standard Certificate Fees/Charges

One time full reimbursement of fees/charges/other expenses, on account of obtaining a standard

certification, up to the date of issue of the certificate.

11.2.1.7 Partial Re-imbursement of Floor Space Rentals for IT Industry

All enterprises in hardware, software, and IT enabled services sector, employing a minimum of 25 persons

would be entitled to partial reimbursement on floor space rentals for a period of 5 years with 50% of the

floor space rentals for 1st year, 40% of the floor space rentals for 2

nd year, 30% of the floor space rentals for

3rd

year, 20% of the floor space rentals for 4th year, 10% of the floor space rentals for 5

th year being

reimbursed subject to a ceiling of Rs. 24 lakhs per year.

11.2.1.8 State Transport Subsidy

Enterprises which are eligible for Central Transportation Scheme 1971 of Department of Industrial Policy

and Promotion Ministry of Industry, Government of India would be also eligible for a 10 % State Transport

Subsidy.

The Tripura Industrial Development Corporation Ltd (TIDC) and the Directorate of Industry and Commerce

are responsible for the development of industrial infrastructure in Tripura. TIDC was formed in 1974 under

The Companies Act 1956. The agency is responsible for the development, growth, facilitation of industry,

investment and industrial development in Tripura. TIDC is responsible for establishing Growth Centres and

Industrial Estates with basic industrial and social infrastructure facilities.

Industrial Infrastructure in Tripura is not well developed. At present there are 6 Industrial Estates, 2 Growth

Centres, 3 IIDCs, 1 Export Promotion Industrial Park and 1 Food Processing Technology Park, 1 Rubber

Park and an Extended Growth Centre in the state. All of these are however not well developed and

maintained and need a lot of up gradation in order to be able to attract Industrial Units. Details of the

Industrial Infrastructure in the state are as per the table below:

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Table 11.1: Industrial Infrastructure in Tripura

S.No Name of Industrial Area Location Area in Acres

Developing Authority

1. Arundhatinagar Industrial Estate Arundhatinagar, Tripura West

0.39 Directorate of Industry and Commerce

2. Badharghat Industrial Estate Badharghat Tripura West 20.32 Directorate of Industry and Commerce

3. Dukli Industrial Estate Dukli Tripura West 44.88 TIDC

4. Kumarghat Industrial Estate Kumarghat Tripura North 45.66 Directorate of Industry and Commerce

5. Dharmanagra Industrial Estate Gharmanagar, Tripura North

5.00 Directorate of Industry and Commerce

6. Dhajanagar Industrial Estate Dhajanagar, South Tripura 18.79 Directorate of Industry and Commerce

7. Bodhjungnagar Growth Centre Bodhjungnagar Tripura West

208.53 TIDC

8. Bodhjungnagar Export Promotion Park Bodhjungnagar Tripura West

126.12 TIDC

9. Food Processing Park Bodhjungnagar Tripura West

30.00 TIDC

10. Rubber Park Bodhjungnagar Tripura West

58.81 TIDC

11. Extended Growth Centre Bodhjungnagar Tripura West

108.81 TIDC

12. Integrated Infrastructure Development Centre

Dewanpasa, North Tripura 45.00 TIDC


Belonia South Tripura 54.97 TIDC


Lalchhari Ambassa Dhalai 57.00 TIDC

Source: TIDC

11.3.1.1 Arundhatinagar Industrial Estate

The Estate located at Arundhatinagar, West Tripura was developed by the Directorate of Industry and

Commerce on an area of 9.39 Acres. There are only 10 sheds in the estate. All the sheds are occupied by

small scale units. Most of the units located in the estate are engaged in steel fabrication. Infrastructure of

the estate is not well developed- approach road to the estate is narrow, even the roads and facilities in the

estate are in a bad shape.

11.3.1.2 Badharghat Industrial Estate

Badharghat Industrial Estate is spread on an area of 20.32 acres. It was developed and is being looked

after by the Directorate of Industry and Commerce. There is only a single unit functioning in the estate. The

estate does not have any connecting roads.

11.3.1.3 Dukli Industrial Estate

Dukli Industrial Estate is spread on an area of 44.88 acres. It was developed by TIDC. Most of the units

located in the estate are steel fabrication units. The famous Baba Zarda manufacturing unit is also located

in this estate.

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11.3.1.4 Industrial Complex

To promote industry in Tripura, TIDC has developed an Industrial Complex covering an area of 532 acres

at Bodhjungnagar in the West District of Tripura. The Industrial Complex is a comprehensive structure and

is located near NH 44, only 12 km from Agartala, the state head quarter. It is well connected through rail

and road and is close to the airport as well. It houses the following infrastructure:

S.No Industrial Infrastructure Area (in Acres)

1. Bodhjungnagar Growth Centre 208.53

2. Bodhjungnagar Export Promotion Park 126.12

3. Food Processing Park 30.00

4. Rubber Park 58.81

5. Extended Growth Centre 108.81

Total Area of the Industrial Complex 532.27

The complex has Internal Roads, Iron Free Water Supply Network connecting all Industrial Plots, Power

supply from 33 KV sub station, Natural gas supply network, Guest house/ welfare centre/ commercial

centre, 50 MT computerized weigh bridge, Administrative block, Telecom network with 480 lines capacity,

Fire and police station, 33 seated air conditioned conference hall and Industrial plots and 12 sheds

At present 40 units are in different stages of setting up their ventures at the complex. 15 units have already

started operations. They are manufacturing cement, packaging drinking water, rubber thread etc. The

details of these units are presented in the following table.

Table 11.2: List of Units located in Bodhjunagar Industrial Complex

S.No Unit Name Products Investment (Rs in Lakhs)

1. Gemini Distilleries Pvt Ltd IMFL 110.80

2. Maa Sarada Chemicals Products Pvt Ltd Alum Ferric 55.00

3. Narayan Kar Associates Pvt Ltd Cement 1420.00

4. Surya Vinayak Industries Ltd Extraction of all form of Sandal Wood 497.10

5. Abhishek Build Well Pvt Ltd Rubber Thread 8100.00

6. Sherawell Food & Beverage Pvt Ltd Packaged Drinking Water 133.66

7. Dharampal Premchand Ltd Steel Ingots & Roller Products 3700.00

8. Tripura Ispat M S Ingots,M S Rod, TMT Bar 914.58

9. Brite Rubber Processing Pvt Ltd Rubber Processing Unit 35.00

10. Penguin Agro Inter National Soft Drink Manufacturing 28.00

11. E D P Management Pvt Ltd Iron Removing Plant and Water Purification Plant

97.69

12. Ramkrisna Sarda Foam Industries Foam Manufacturing 37.54

13. Jayanti Domestic Products Pvt Ltd Agarbatti 30.00

14. Rose Valley Industries Ltd Spices 3.25

15. Agartala Food Processing Pvt Ltd Food Processing 1538.54

Source: TIDC

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11.3.2.1 Power

Electricity plays an important role in the economic and social development of the state. The state has two

sources of generation namely hydro and thermal. Out of the major sources of power generation, thermal

power accounts for 94% while remaining 6% is generated from hydel power.

Tripura State Electricity Corporation Ltd. (TSECL) has a total capacity of 110 MW from 3 generating

stations viz. Gomuti Hydro-electric Project, Baramura Gas Thermal Power Station and Rokhia Gas Thermal

Power Station. In addition to this, it has 5.85 MW from diesel based generating units. The unit-wise

capacity of all generating stations is as per the table below

Table 11.3: Present Power Generation System in the State

Name of Project Installed Capacity Effective Capacity

Gomuti H.E Project 5x3=15.00 MW 8.5 MW

Baramura Gas Thermal Project 21x1=21.00 MW 21.00 MW

Rokhia Gas Thermal Project 8x4+21x2=74.00 MW 50.00 MW

Total 110.00 MW 79.50 MW

Source: TSECL

The peak demand of the state is 160-165 MW out which state’s own generation is somewhere around 80-

82 MW and about 40-45 MW is bought from the Northern Grid. Still, there is a short fall of about 38-40 MW

which is covered by load shedding. The figure below is a representation of the demand-supply situation

and gap that exists in the state.

Figure 11.1: Electricity Demand-Supply Scenario in Tripura

in MW

127

165

0

20

40

60

80

100

120

140

160

180

Demand Supply

Source: TSECL

1. Project & Study Background

Documents

Transcript of 1. Project & Study Background