Border firms unhappy about sops hold-up

Industrialists of three border districts in the state (Ferozepur, Gurdaspur and Amritsar) are peeved about the non-release of subsidy supposed to be granted to these towns according to the industrial policy of 2003.

Umpteen representations and communications to the state government by various industrialists and their associations failed to yield any response.

HS Makhni, honorary general secretary, Textile Manufacturers' Association, said industry of the border zone (comprising three districts) had to face the brunt of terrorism and, of late, the unfavourable tax regime.

According to the Congress-led Punjab government's gazette notification dated March 26 2003, 30 per cent capital subsidy would be extended to small scale units, which would be established in the border zone.

He said the new policy had lifted the morale of businessmen to again invest in the manufacturing and processing of textile, wool and other materials, which once used to provide employment to thousands of persons. Even people from as far as Uttar Pradesh and Bihar used to come in droves in search of employment in these units.

However, Makhani said, the announcement remained only on paper. Some of the entrepreneurs had to incur losses as, encouraged by the announcement, they had raised their share of capital even by mortgaging their personal assets and invested keeping in view the 30 per cent capital subsidy. Under the policy, the state has to make budgetary allocation up to Rs 25 crore annually for disbursal of capital subsidy quarterly on pro-rate basis.

Makhani said no satisfactory reply was given by the leaders of the government. In some cases their repeated pleas elicited a response from the industries department which said since no budgetary allocation had been made by the government, their cases had lapsed.

Entrepreneurs categorised this as unfair and felt that a majority of the newly-started small scale units would face closure. These new units provided large scale employment and the workforce would also become idle, they added. They reasoned that the government had increased its revenue in recent years and since the industry was one of the contributors to this, the government must compensate it to make more commercially viable.

When contacted, Bakhshish Singh, joint director, department of industries and commerce, Punjab said the 2003 industrial policy for border zone included two kind of subsidies, including freight and capital. He said it was based on pro rata basis which meant that it would lapse if the budgetary allocation was not made.

He said before the announcement of the new policy the government had to pay subsidy worth about Rs 600 crore to small scale unit holders across the state. Learning about the new industrial policy some businessmen approached the high court to direct the government to first clear pending subsidies.

It resulted in the government stopping the release of budgetary allocation for industrialists of border zone under new plan. Out of the earlier subsidy (Rs 600 crore) roughly Rs 150 crore was due to the border districts. He said the government had released around Rs 50 crore about one and a half months ago.

Dharam Pal, general manager, industries department here, said the office had received about Rs 5 crore. He said all small scale industrial units having investment in plant and machinery not more than Rs 1 crore were eligible for receiving subsidy.