New Delhi, January 29
Lucrative concessions and tax exemptions to manufacturing units in hill states have divided the northern region. Both Punjab and Haryana have lodged fresh protests over continuation of these tax concessions beyond March 31 in Himachal Pradesh and Jammu and Kashmir.
Separately, Uttar Pradesh has also joined in the protest as it feels that Uttrakhand was growing at its expense. The hill states want concessions to go on till March 2013, which was the original cut-off date in the notification made during the NDA rule.
Punjab Chief Minister Parkash Singh Badal today met Prime Minister Manmohan Singh and sought his “personal intervention” to either stop the tax concessions or allow similar concessions to industry in Punjab.
Though the SAD led by Badal was part of the NDA rule when this concession was originally allowed, today he churned out excise collection figures to show how Punjab industry was losing out. The industry was preferring neighbouring Himachal Pradesh, Jammu and Kashmir and Uttrakhand where the tax concessions were applicable.
Badal’s plea comes less 10 days after he joined hands with his Haryana counterpart Bhupinder Singh Hooda to issue a joint statement. The two CMs had asked for withdrawal of the tax concessions to hill states or having similar concessions for their states also. Badal said the concessions had already “robbed Punjab”. Industrialists in the state were not able to compete with their counterparts from hill states. He said there has been no new investment in Punjab because of the discriminatory policy.
Nearly 274 industrial units of Punjab had already either shifted or set-up their expansion units with investment of about Rs 3,674 crore in the neighbouring states to avail concessions. A statement from his office, issued after meeting the PM, said there had been considerable decline in the central excise. It had gone down from Rs 1,896 crore in 2004-05 to Rs 867 crore in 2006-07.
Already, Uttar Pradesh has asked the Centre to withdraw the exemptions in Uttarakhand or restrict it those areas that are at least 1,000 metre above the sea level. UP wants its districts within 100 km from the Uttarakhand border be also given the same benefits.
The states in the plains are quoting the approach paper to the 11th Plan that has said “….extension of excise duty exemption to Himachal and Uttaranchal has had an adverse impact on industrial investment in ….. adjacent states”.
On the other hand, the two union ministers are aggressively pursuing Himachal’s case from Himachal Pradesh, Virbadhra Singh and Anand Sharma. In the hill state it has become a political issue with Chief Minister Prem Kumar Dhumal openly saying that the two union ministers should put their weight behind the issue and ensure that the concessions are extended till 2013.
