Headlines       Vol. 1 Issue 38-39

Mar 7 - Mar 21 , 1999

Moderate sops for NE in budget: ten year tax holiday for region's industries The Union Budget for the year 1999-2000 promised a moderate benefit for the North-Eastern region which included ten-year tax holiday for infrastructure industries and general insurance for all new industries by the Centre. In the vital petroleum sector unlike last year when New Exploration Licensing Policy (NELP) was declared there hardly any major announcement this region could feel good for. In the Ministry of Home Affairs, there was allotment of about Rs. 450 crore including that of the North Eastern Council (NEC). There was also some allotment for North Eastern Electric Power Corporation (NEEPCO), maintenance of border roads and development in border areas. Though the Finance Minister in his budget speech rarely spoke about the North-Eastern region, the budget papers maintained that the Central Government had earlier decided to allocate at least ten per cent of budget of each ministry for the North-East region. The shortfall in non-utilisation of this amount would have to go to non-lapseable Central pool for the region. In the current year total savings of Rs. 121.95 crore have been identified and re-allocated to various ministries for all-round development of the North-East region. Out of this reallocation Rs. 93.10 crore have been actually transferred to the region while the rest have been earmarked for rural development, culture, etc. “The outlay for 1999-2000 is Rs. 450 crore which is for the Central assistance covering agriculture and allied sectors, water, power development, industries, mining, transport and communication and other services,” the budget paper said. In the vital hydrocarbon sector the Oil India Ltd. which has major operations in Assam, this year Rs. 468 crore have been allocated by the Ministry. The Bongaigaon Refinery and Petroleum Ltd. (BRPL) has been allocated Rs 55.31 crore. In case of the upcoming Numaligarh Refinery Ltd. Rs. 228 crore have been set aside since a major chunk of its expenses was given in the last year's budget. The budget paper said that a comprehensive insurance scheme for the North-Eastern states is being formulated in consultation with the General Insurance Corporation of India Ltd (GIC). The total premium under the insurance scheme for a period of ten years would be borne by the Centre on a reimbursement basis for ten years. The industries in the infrastructure have been given ten-year tax holiday seeing the urgent need for the industrial sector in the remote and backward region where industries are not coming forward in absence of adequate infrastructure.

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