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Excise holiday boosts investments in N-E — Hind Lever, SmithKlineBeecham lead the way

Kohinoor Mandal

KOLKATA, Nov. 27

THE excise holiday announced by the Union Government in 1999 has worked as a major boom for the north-eastern sector as leading corporate houses like Hindustan Lever Ltd and SmithKlineBeecham have set up manufacturing bases in that region.

Talking to Business Line, Mr J.P. Saikia, Chairman and Managing Director of North Eastern Development Finance Corporation Ltd, (popularly known as Nedfi), said the units had come up mostly in Assam, Meghalaya and Tripura.

According to information available with him, 461 units in the medium and large-scale sector had come up involving a total investment of Rs 997 crore, creating jobs for more than 33,000 people.

In Assam, the investment was made mostly in sectors like jute, coal, food and beverages, plastics and cement. Steel and ferro alloys is the most favoured sector in Meghalaya because of the cheap power. In Tripura it is mostly food products and in Arunachal Pradesh it is tea.

"Corporate houses are trying to take the advantage of the Central excise benefits that the Union Government had specially given for this region. We have noticed that setting up of new units shot up dramatically in the post-1999 period. We just hope that the momentum remains high,'' Mr Saikia said.

In this context he said that Hindustan Lever and SmithKlineBeecham have set up production units in this region. As a result famous branded products like Lakme and Horlicks are being manufactured in that region. Apart from these, new bodycare brands like Nomarks and Kiwi are also produced in this region.

"Hindustan Lever has created a manufacturing base in Doomdoma at Tinsukia in Assam. Similarly, Horlicks is being produced from a factory at Mangaldaoi in Assam. A number of ancillaries, which are depended on these units have also come up,'' Mr Saikia explained.

Cheap power is the biggest attraction for setting up units in Meghalaya. Power is available at a price of only Rs 1.70-1.80 per unit. In fact, there is such a rush for setting up production bases in Meghalaya, Mr Saikia said, that the Government was forced to hold back the process of issuing licences to nearly 55 new proposals.

"The good infrastructure of Meghalaya and Assam is another attraction. This sort of infrastructure is not available with the other north-eastern States,'' he added.

After mentioning these positive developments, he explained, that insurgency is no longer a disincentive for setting up new units in the north-eastern States. "After all almost every State is facing sort of a law and order problem,'' he said.

Nedfi has a separate financial package for small and medium scale units.

Up to an investment of Rs 20-25 lakh they are willing to give 60 per cent of the total project cost as loans and another 25 per cent as equity.

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