Financial Daily from THE HINDU group of publications
Friday, Mar 19, 2004
Financial Daily from THE HINDU group of publications Friday, Mar 19, 2004 |
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Industry & Economy
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Regulatory Bodies & Rulings Corporate - Trends Bengal panel flays `undue financial assistance to cos' Our Bureau
Kolkata , March 18 EIGHT big private sector industrial houses received financial assistance worth Rs 39.17 crore from the cash-strapped State Government under the State's industry promotion scheme. The companies include big names such as Kusum Products Ltd., Rasoi Ltd., (two of the biggest beneficiaries), Brooke Bond Lipton India Ltd, Webel Nicco Electronics Ltd., Philips India Ltd., East India Pharmaceuticals Ltd., Deys Medical Stores Manufacturing Ltd, and Dolphin Laboratories. The assistance doled out to these companies, some of which were profit-making and dividend paying companies has raised the ire of the Public Accounts Committee (PAC) of the West Bengal Legislative Assembly which in its report (for 2003-04) has remarked that "undue financial assistance" were given to these non-government companies in the shape of industrial promotion. The assistance was given between 1994-95 and 1995-96 under the West Bengal Industrial Promotion (assistance to industrial units) scheme. The Comptroller and Auditor General of India had also made similar notings about these companies in its report for the year ended March 31, 1997. According to the PAC report, while Kusum Products had received Rs 15.5 crore, Rasoi got Rs 13.1 crore . Philips India Rs 3.1 crore followed by Webel-Nicco Rs 3.1 crore. Brooke Bond got Rs 2.6 crore. Even as the State Government in its replies to the PAC, maintained that sickness was not a criteria for its choice of units for granting incentives, the PAC, after examining the entire gamut of issues involved opined that the finance department had "acted carelessly and irresponsibly in dealing with the instant matter". It said that it was not expected on the part of the finance department that it would extend financial assistance "without valid ground". The report also noted that the department could not produce the total number of applications received during the years under scrutiny nor could it explain as to on what basis the ineligible units were selected for giving assistance. The PAC was also irked that no follow-up action has been initiated on their part after giving the financial assistance under the industry promotion scheme. "The department did not monitor how and for what purpose the granted assistance money had been utilised," the report said.
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