Govt to offer scheme to firms for repaying loan

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SummaryThe Industrial Reconstruction Department of West Bengal government will offer a scheme to some private companies with an aim to recover loan which the government had given to them over the last decade.

The Industrial Reconstruction Department of West Bengal government will offer a scheme to some private companies with an aim to recover loan which the government had given to them over the last decade.

A senior official of the department said the state government had provided financial assistance of Rs 173 crore to 48 sick industrial houses so that they could revive. The assistance was provided in two phases. In the first phase, 19 industrial units were given Rs 30 crore cash loan. This was followed by sales tax exemption to 29 industrial houses which amounted to Rs 143 crore.

Out of Rs 173 crore, only 48 crore have been recovered from the industrial units. Some of the companies did not repay the principal loan and the interest accrued, the official said. It was also found that the industrial houses that were given cash loan used the monetary assistance to repay bank loan they had taken earlier. “The assistance was given to revive the industries. But it was used to repay bank liabilities,” the official said.

The sales tax exemption facility was given to them on condition that they will repay the amount within a definite period. While some of the companies were asked to repay the loan with interest by 2009, the deadline for repayment for some other companies were 2010 and 2011.

“After the deadline expired, it was found that several companies did not return the money. Despite persuasion, they did not respond to the state’s appeal to repay the loan. If we serve legal notice, they might move the court. So we are preparing an interest waiver scheme which would be offered to them,” the official said.

According to sources, the interest waiver will be between 35-75 per cent depending on the status of their repayment. The defaulters have been categorised on the basis of the status of the repayment. “The companies which have paid a majority portion of the principal and interest amount of loan will be offered 75 per cent waiver while those that have paid only some amount will be given 35 per cent waiver on interest,” the official said.

The department is even considering to bring a legislation — Industrial Reconstruction Loan Recovery Bill, 2013 — in this regard. The Bill will have provisions of confiscating the property of the company, imposing penalty among others. However, before enacting the law, the government wants

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