 "Marico shuts plant, first major flight of industry from UKD")
In what is being seen as the first major flight of the industry from Uttarakhand, the FMCG firm Marico has announced plans to close its Dehradun-based manufacturing unit, the first big company to declare such closure after the expiry of tax incentives under the 2003 scheme for Uttarakhand and Himachal Pradesh.
Though the top state government officials were tightlipped on the closure of Marico factory, the company only said it has stopped manufacturing activities in its Selaquie unit in Dehradun with effect from Nov 21 and initiated steps for the closure of the plant. The unit was producing cosmetics. The company also claimed that the closure will have “no significant bearing” on its performance.
The Dehradun plant was set up in 2003-04, when the former NDA government at the centre had announced the heavy tax incentive package which included 100 percent excise duty exemption for 10 years. The incentives are being availed by over 5000 units in Uttarakhand alone for an exemption period of 10 year after the start of the production. All the tax incentives including excise duty, Income tax and capital subsidy have now ceased to exist after the expiry of the package. Top companies like Tata Motors, Hero Honda, Ashok Leyland, Nestle are among over 5000 industries had set up new units in the two states. In Uttarakhand alone, nearly 2500 units were set up during the period with an investment of over Rs 26,000-30,000 crore.
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Top officials of the department of industry as well as the State Industrial and Infrastructure Development Corporation of Uttarakhand Limited (SIDCUL) said they did not have any knowledge about the closure of the Marico plant. However, a top government official on the condition of anonymity admitted that it may be the first major flight of the industry from Uttarakhand after the expiry of the hill-based tax incentives. “Though we have to verify why Marico is closing its plant but it is matter of concern that such a big company is doing it in Uttarakhand,” said the government official.
After the expiry of the tax incentives, a large number of pharma firms in the two states are also facing the heat of thin margins and want to sell off their businesses in the two states.
“It is very sad that Marico is closing such a big plant at Selaquie. Besides expiry of tax incentives, bleak power scenario and labour unrest are also cause for concern in our state especially at Selaquie,” said Pankaj Gupta, President of Industries Association of Uttarakhand (IAU). Ends