Transport sop hits dead end

NEW DELHI: The government may discontinue the transport subsidy scheme (TSS) for the north-eastern states and Union territories, retrospectively. A commerce & industry ministry notification, released earlier this month, has said the scheme is extended from April 1, 2007 to March 31, 2008 only.

The government order specifies time-frame for the scheme under the North East Industrial and Investment Promotion Policy (NEIIPP). Investors in the north-eastern region are up in arms against the government decision as they have already invested on the basis of the NEIIPP.

���Withdrawing the transport subsidy means, a hit of around 50% in the profit. Out of the various incentives, TSS and excise exemption were most beneficial, Federation of Industry & Commerce North Eastern Region (FINER) director Rajendra Chamaria said.

The transport subsidy scheme (TSS) has been given to eight North-East states, hilly states such as Uttarakhand, Jammu & Kashmir, Himachal Pradesh and for UTs such as Andaman and Nicobar Island and Lakshwadeep.

According to Mr Chamaria, the transport subsidy scheme which originally was extended till March 2017 has now been discontinued with effect from March 31, this year.

The decision has been taken while still there is a backlog of Rs 400 crore to be cleared under the transport subsidy scheme (TSS) in N-E region alone, he said. The government has also decided to curtail benefits of 100% excise exemptions with effect from March 2008.

The NEIIPP had attracted various companies to the region and in 2007-08, the total cost of projects sanctioned had seen an increase of 36% as compared to last year.

The disbursement amounts given by the nodal agency for disbursal of subsidies, North East industrial Development Finance Corporation (NEDFI) had also seen a jump of around 22%. However, with government rolling back the subsidies, various north-eastern organisation are projecting that already in the last two months the investment in the region has reported a 40% decline.

The government in April 2007 had approved a package of fiscal incentives and other concessions for the North East region under North East Industrial and Investment Promotion Policy (NEIIPP). The policy had offered more sops to companies operation in the region and appointed North East industrial Development Finance Corporation (NEDFI) as the nodal agency for disbursal of subsidies.