Grasim's MP plan caught in red tape

The stubborn attitude of bureaucrats is coming in the way of MP's industrial expansion in a major way.

In a recent meeting, the commercial tax department raised a trivial issue to restrain the chemical division of Grasim from getting "mega project" status. The company is investing Rs 95 crore in the state to upgrade its Nagda caustic soda unit (in Ujjain).

The department's argument is like this: the company is bound to go for technology upgrade since it has been mandated by the Central Pollution Control Board. As a result, the company's investment cannot be considered fresh investment and the unit cannot be considered a new unit.

That is what the commercial tax department has mentioned in its note for the Apex Level Investment Promotion Empowerment Committee meeting organised recently.

Interestingly, according to a Comptroller and Auditor General report, the department has caused the state a loss of Rs 992 crore in tax during 2004-05 due to under-assessment, short levy, and loss of revenue in 131,736 cases.

Grasim wanted sops and concessions for its proposed Rs 95 crore investment.

However, the department of industry had urged the Apex Level Investment Promotion Empowerment Committee to consider mega project status for the proposed investment. Grasim also asked for investment promotion for 10 years, and exemption from entry tax also for 10 years on raw material, incidental goods and packaging material.

Aditya Birla group company Grasim Industries Ltd (Chemicals Division) has proposed to upgrade technology for caustic soda production by using more environment-friendly membrane cell technology.

At present, the Nagda unit of the company uses mercury cell technology, which poses hazards to the environment because mercury gets trapped in the circulating brine solution and all product and byproduct streams lead to the contamination of the water, wastewater, air and solid wastes generated from the production.

Also, the quantity of mercury involved in the production is very large, and its leakage and the evaporation of the spilled mercury are observed to be very common and require timely attention.

The company has plans to switch to the new technology this year or early next year. It will also be able to upgrade its production capacity from 60,000 metric tonnes now to 144,000 tonnes. The new unit will also create 319 jobs.