CCEA to focus on N-E development

New Delhi, Jan 31 | Updated: Feb 1 2006, 05:30am hrs
The Cabinet Committee of Economic Affairs (CCEA) will on Wednesday consider a proposal for a comprehensive review of the North East Industrial Policy, on the basis of the recommendations of the ministry of commerce and industry. The policy accords a slew of tax and non-tax concessions to the industries in the region.

The revised policy, according to sources, would mark a shift in focus to employment-intensive and export-oriented industries, besides ensuring greater dispersal of the benefits across the entire northeast region.

Under the new policy, the existing subsidies on interest on working capital loans and capital investment would be substantially enhanced. The transport subsidy scheme, which accounts for 85% of the cost of the scheme at present, would also undergo restructuring. The new policy will focus on export-oriented units. SSI units would get a fillip under the revised policy.

The objective of the revision would be to correct the present skewed pattern of distributing the bounties. Currently, benefits under the scheme go predominantly (91%) to two states, Assam and Meghalaya.

Also, under the current structure of the scheme, excisable items have an advantage over tax-free items.

Under the existing scheme, the north-east industrial units get a 3% interest subsidy on working capital loans and 15% subsidy on capital investment, upto a maximum of Rs 30 lakh. The transport subsidy is available for transport of raw materials as well as finished goods.

Other proposals to be considered include modification of the accelerated rural water supply programme, an agreement on tourism development with the government of Philippines and a pact on science and technology cooperation between the governments of India and the US.

The CCEA will also take up a proposal by ONGC Videsh Ltd for acquiring participatory interest in two deep water exploration blocks in Nigeria.