Vardhman group likely to get more sops in MP

After bring Coca Cola in the tax ambit, the MP government is likely to offer more concessions to the Vardhman group, which has increased the quantum of investment in Madhya Pradesh in its proposed textile units. The firm is likely to get more exemptions.

Recently, the state government recovered a tax amount of more than Rs 3 crore from the Coca Cola India unit in Madhya Pradesh. The previous government under Digvijay Singh had exempted the unit from commercial tax.

The SP Oswal-promoted company is setting up two integrated textile mills, one in Satlapur and the other in Budni, with an investment of Rs 1,400 crore. The Budni unit is likely to start production next year.

"The company is likely to be offered exemption from entry tax on raw material transfer from Satlapur (near Mandideep industrial area) to Budni," said a government source.

The company had demanded exemption on the grounds that the raw material transfer will not be part of sales since both the units are owned by single promoter.

The state government, according to the source, may also exempt the firm from diversion tax or a one-off arrangement payment facility against the use of 403 acres of private land acquired by the state government in Pili Karar village of Budni tehsil.

The company has cited examples of other states like Punjab, Haryana, Himachal Pradesh and Gujarat.

"The new Budni unit will generate 2,000-3,000 labour jobs," said a government official. The company has planned to invest Rs 600 crore in the proposed Satlapur unit. The state government has already offered flexibilities in the implementation of labour laws for both the units.

The Vardhman group has a 100 percent export-oriented unit, Mandideep Anant Spinning Mills, which has been set up with an investment of Rs 200 crore during the 1990s.

According to a senior industry department official, Vardhman's plan to join hands with a Hong Kong-based garment firm, Pacific Textiles, failed to take off.

The firm had planned earlier this year to come up with a proposal to invest at least Rs 500 crore in knitted fabrics in Satlapur or Budni with the firm.