MP may get industrial body, finally

Though even two years after the announcement of creation of a special industrial area development authority (SIADA) in its Industrial Promotion Policy 2004 the state government failed to issue a notification in this regard and introduce a Bill in the assembly, it is now learnt that the government will try to do so in the next assembly session.

The state Cabinet is likely to clear the proposal in the next meeting.

The system, proposed by the previous Congress government after taking a cue from the Andhra Pradesh government, is aimed at removing the existing two-tier local tax system in industrial areas and industrial growth centres and ensuring a speedy development of the civic system.

To make this system effective, the state government will have to have a Bill to amend three civic body Acts "" the Madhya Pradesh Municipal Act, 1961, the Madhya Pradesh Municipal Act, 1956 and the Panchayat Act 1993 "" for transferring powers and responsibilities pertaining to property tax, duty on transfer of properties, cess, sewage and building control public services to special public committees in industrial areas from municipal corporations and local bodies.

However, the state government has yet to clarify how it will discuss the 74th amendment of the Constitution regarding elections of local bodies.

With the exception of Madhya Pradesh, almost all other states have adopted this system for development of industrial areas.

At present, local bodies and the state industrial development corporation's local arms collect development taxes, cess and property taxes and hence this two-tier tax system has always attracted protest from industries.

A meeting of officials of the department of industries organised yesterday evening decided to put a proposal in this regard at the next Cabinet meeting.

"The meeting decided to put the proposal of creation of SIADAs in the next Cabinet meeting. However, if possible a notification can also serve the purpose," a government insider said.

The SIADA, if created and the government-owned industrial institutions like Audyogik Kendra Vikas Nigams, which are subsidiaries of the Madhya Pradesh State Industrial Development Corporation, will be empowered to levy tax in industrial areas and the fund will be utilised for developmental activities of these areas.

SIADA will collect and spend 75 per cent of the total tax for development of industrial area and the rest will go to the local civic body or panchayat for development of local residential area. The Confederation of Indian Industry and local business chambers had raised the issue of the two-tier-tax systems.

"Public participation and autonomous committees would be responsible for maintenance and upkeep of industrial areas and industrial development centres," stated the Industrial Promotion Policy 2004.

According to a government source, "SIADAs will be formed as a pilot project in the industrial areas of Pithampur, Mandideep, Malanpur and in some industrial growth centres. The SIADAs will be an elected body with the district collector as its chief executing officer."