It is heartening to inform you that Mr. S.K. Jain, Past President for two terms-- 1997 to 2001 has been re-elected the President of the organization for 2005 to 2007 by the elected Board of Directors in the 12th Annual General Meeting held on 28th of October 2005. Mr. Jain will be supported by two Vice Presidents, one Treasurer and 13 Directors. The complete list of Governing Board members of FINER including the Immediate Past President and co-operated Directors is presented below :

Board Directors of FINER

1. Mr. S.K. Jain, President

2. Mr. R.S. Joshi, Vice President

3. Dr. N.N. Dutta, Vice President

4. Mr. Sandeep Khaitan,

Treasurer

1. Mr. S.C. Agarwala, Immediate Past President

2. Mr. Chinmoy Sharma,Director

3. Mr. R. G. Harlalka, Director

4. Mr. Bajrang Lohia, Director

5. Mr. B.L. Agarwala, Director

6. Mr. Sudip De, Director

7. Mr. George Chacko, Director

8. Mr. Sajjan Bhajanka, Director

9. Mr. Saurav Agarwal, Director

10. Mr. Ramesh Pasari, Director

11. Mr. Santosh Kr. Jaiswal,

Director

1. Mr. Amit Jain, Director

2. Mr. Pradyut Bhuyan, Director (Co-Opted.)

3. Mr. Anil Saraf, Director (Co-opted.)

You are aware that FINER has been playing a crucial role as an Apex Body of Industries and Commerce of North East for the economic development of the Region. It has got lot of achievements to its credit. It has not only been harping upon macro economic issues, but also on micro issues for the development of economy of the Region.

The new Board will undoubtedly take up the on-going issues like revitalizing of NE Industrial Policy and issues with the State Governments. But in its new vision, Finer will focus on new contours of economy like Health Care, Infrastructure (Real Estate. Roads and bridges, Riverine transportation, etc.) Information Technology, Road Transport, Tourism, Entertainment, etc.

Since the contribution of the manufacturing sector to the State Domestic Product (SDP) of NE States is very poor, FINER will take up the critical issues halting the growth of this sector. Besides, NE State Governments have failed miserably on good governance. So, it will also be the approach of FINER to take up this vital issue.

Frequent Bandhs and economic blockade in the region have really given a negative image to this Region. FINER has been creating awareness about the serious ill-effects resulting from Bandhs. Now it will take up the issue more aggressively for mobilization of public opinion.

Another focus area will be government and private sector partnership which has not taken a real shape in the region. The need of the hour is close understanding between the government and private sector. Private investments needs to be brought in at a faster pace. This calls for united efforts by all concerned. In this respect, the efforts taken by states governments in Eastern Region like West Bengal, Orissa, Jharkhand are noteworthy. FINER will try to address this issue in right earnest.

No more Bandhs–

Under scoring the need to do away with the culture of frequent bandhs and economic blockades in the State and other north-eastern State, the Federation of Industries and Commerce of North Eastern Region (FINER) said that the spurt in bandhs had projected a bad image of the North-east outside the region, throttling the already slow process of development.

In a Press Meet organised on 30th Oct 2005 the newly elected President of FINER Shri S.K. Jain said that the impact of bandhs and blockades on the economy of the North-east, which has already suffered a lot due to its geographical isolation, is extremely harsh. It not just give a bad name to the region but also effectively chokes possible investments from outside.

FINER has been raising its voice against bandhs that have, of late, assumed alarming proportions in the State, said it was taking the issue more seriously and would soon launch an aggressive campaign against bandhs.

"We have been highlighting the evil effects of bandhs for quite some time. Now we are embarking on a drive to mobilize public opinion against this unhealthy phenomenon," Jain said.

FINER was also of the opinion that the successive North East Industrial Policies have totally failed to address certain basic aspects of commerce and industry like power and infrastructure over the years. "The potential of the North east has never been realized due to these perennial bottlenecks," Jain said, adding that the neighbouring West Bengal had achieved high rate of growth following its reforms in the power sector a few years back.

Good governance was another area where the successive State governments have faltered, FINER said.

Jain revealed that the new board of FINER would take up the urgent issues like revamping the North East Industrial Policy with both the State and the Central governments. "We have had a secretarial level talk in New Delhi two weeks back where we stressed the need for incorporating some incentive and relaxations for the North-east in view of its geographical location and other peculiarities," President said.

In the days to come, Jain said, FINER would focus on areas like health care, infrastructure, information technology, tourism, entertainment, road transport, etc. "The need of the hour is to project and market the North-east as a favourable destination. For this, we must facilitate a closer understanding and partnership between the Government and the private sector," he added.

Suggestions for making the NEIP More Attractive/Effective

In an Interactive session with Shri N.N. Prasad, Jt. Secy. Department of Industrial Policy & Promotion (DIPP) and Shri Puran Chand, Deputy Director DIPP, on 11th November 2005 at Guwahati. FINER President Shri S.K. Jain made the following suggestions for making the NEIP more attractive/effective. Suggestions were evolved from the interaction of FINER members on 8th November 2005.

1) Period of NEIP, as revised, to be extended by 10 years up to 2017.

Current : Policy is available till 2007
Submission : For extension till 2017

2) Removal of Locational Restriction

Current : Restricted to only specified areas & specified products.
Submission : all restrictions to be removed except negative list of items.

3) Excise Duty refund - Eligible industries of the North East should be allowed total exemption of Excise duty

Current : Exemption restricted to excise paid out of account current only
Submission : To cover excise duty paid on cenvat account and cess paid such as NCCD, Education Cess, & CVD on imported raw materials.

Caution : should be given in such a manner that the Incentive can really contribute in a bigger manner for industrialization of the region.

4) Eligible industries of North East should be exempt from payment of Minimum Alternate Tax (MAT), Dividend Tax and Fringe Benefit Tax.

Current : Restricted to Income Tax exemption only
Submission : Exemption from MAT under sec 115 JB, Dividend tax 115 (O), Fringe Benefit Tax 115 (w) in order to have full tax exemption.

5) Transport Subsidy :

a. Subsidy be available for 10 years for new as well as existing units undergoing expansion/modernization/diversification

Current : Available for 5 years and not allowed for expansion, if already availed prior to expansion.
Submission : Allow for 10 years in line with all other schemes and also for units undergoing expansion/modernization/diversification

b. Subsidy should be allowed for exports from the location of the unit to the Indian port of Export/Border Trade Point.

Current : Transport subsidy not available for exports
Submission : Allow for exports from the region.

c. Subsidy should be available for imported raw materials from the Indian Port/Border Trade Point to location of the unit in the Region.

d. Subsidy should be available on steel raw materials lifted from stockyards of Main Producers (SAIL/TISCO) at Guwahati.

Current : Allowed subsidy only on direct procurement from steel plants.
Submission : Allow for lifting from stockyards of SAIL and TISCO in the region.

e. Subsidy should be available for transportation within the Northeast Region even within the same State.

Current : Available for interstate transportation only.
Submission : Allow within same state with a minimum distance of 100 KM.

f. Subsidy should be allowed for Petroleum (other than fuel) Goods based industries in the Private sector.

Current : Subsidy-Not available to Petroleum goods industry.
Submission : Extend to Petroleum (other than fuel) Goods based industry in the private sector.

6) Capital Investment Subsidy :

Current : CCIS -Restricted to-15% of Plant and Machinery with a Ceiling of Rs. 30.00 lacs
Submission : CCIS to be extended to 30% on all fixed assets including land, building. Ceiling of Rs 500.00 lakhs.

7) Interest Subsidy
Current : Interest subsidy 3% on WC interest only.
Submission : Interest subsidy 50% on interest paid to banks for WC loans (fund based and non-fund based) and also on Term Loan to banks/FIs.

8) Special thrust on new Industrial sector of economy like Health Care, Tourism, Information Technology & IT enabled services, Real Estate, Construction & Infrastructure, Photographic Units, Mineral based Industries, Agro based Industries.

Current : Restricted as per specified notification.
Submission : Include as stated above.

9) Extension of policy benefits to currently closed/sick units for revival

Current : Policy benefits for notified area/notified product only.
Submission : To be extended to sick/closed units irrespective of restriction based on product or location.

10) Power Subsidy :

Current : Power Subsidy not available in NER
Submission : Subsidy for power cost above Rs. 1.90 per unit

11) Insurance subsidy Scheme to be broad based

Current : Available only for fixed assets and low risk areas.
Submission : To extend coverage for current assets and high risk areas such as floods, earthquake etc.

12) Disbursement of subsidies within fixed time frame

Current : No time frame specified.
Submission : Suggest a three -month time frame from approval of claims by SLC. In case of delay, 2% interest should be paid.

13) Development of industrial infrastructure

Current : Progress very slow.
Submission : Should be speeded up and time limit set.

14) Substantial expansion definition to be amended

Current : Different for different schemes.
Submission : To be enlarged in line with other Northern Indian states.
25% capacity or 25% employment increase, or capital investment by at least 25% or expansion of capacity by backward integration.

15) Constitution of monitoring Committee for speedy implementation of policy

16) Applicability of incentives/subsidies to existing Industrial Units for the balance period of 10 years.

FINER seeks region specific banking policy for ne region :

At a meeting convened by the RBI at Guwahati during the visit of the RBI Governor Dr. Y.V. Reddy to the Northeast on 12th November 2005, a FINER delegation led by Shri S.K. Jain, President FINER made the following submission to the Governor, RBI-

1. CD Ratio : No much of improvement in CD Ratio in NER in spite of persistent follow up after Govt.'s clear directives. Still, the ratio is hanging around 34% in the NE against all India average of 57%.

2. Interest Rate : Interest rates have come down but some of the banks have increased the frequency of the compounding interest from quarterly to monthly that increases the financial burden and negates the benefits of reduced interest rates.

3. Loan appraisal system : The loan appraisal system should be processed fast and all formalities completed within a specific period of time.

4. Focus on SSI sector : Working Capital Finance should be extended to SSI sector as per the stipulated norms. There is not much improvement as a result first generation entrepreneurs are suffering badly.

5. Awareness programme : Lack of awareness about various schemes pertaining to loan has led to poor exposure to industry in NER. Aggressive approach is required in this respect.

6. Specialised Branches : The commercial banks that handle industrial advances of significant magnitude in the region should be encouraged to have commercial branches/industrial finance branches/Corporate Accounts Group so that the requirements of industry can have a focused solution.

7. Region specific policy : NER has certain unique features and the industry in the region cannot be given same treatment as the industry elsewhere in the country. There are various factors like higher cost of project, bigger working capital cycle due to higher inventory holding, etc. As such region, specific guidelines for lending norms becomes very inevitable. Unfortunately, Banks are not taking care of these factors into consideration.

The Federation is of the opinion that a Policy decision in this regard should be taken in right earnest failing, which the industrialisation of this place will be hit very badly.

8. CGFSI (Credit Guarantee Fund for Small Industry) : RBI vide its circular RBI/2005-06\140 dt. 25th August,2005 has directed all the banks to give special focus on this scheme by relaxing the stipulations. However, banks have failed in playing positive role so far this scheme is concerned. To make the scheme more effective and purposeful, the following steps should be considered :

a. The scheme should be given wide publicity.
b. Present ceiling of Rs. 25.00 lacs be increased up to 50.00 lacs.
c. First time fee be reduced from 2.5% to 1%.
d. Annual fee be reduced from 0.75% to 0.50% applicable on balance amount in the a/c, not on sanctioned amount as per the existing norm.

Dr. Y.V. Reddy, Governor RBI responded favourably to the FINER submission before him at the meeting held in a city hotel on 12th November 2005.
Giving patient hearing to the FINER submission, the Governor, RBI-assured FINER that the submission would be considered. The matter of Region specific Banking policy was also deliberated at the Meeting.

FINER was represented at the meeting by Shri S.K. Jain, President and Shri S.D. Lahkar, Senior Consultant. The meeting was also attended by senior representatives of all Leading Banks of the Region, RRBs, State Cooperative Banks besides Senior Officials of RBI and the State Government of Assam.

Assam Industries (Tax Exemption for Pipe Line Units) order 2005
FINER made a representation to the commissioner of Taxes for extending the benefits of tax exemption under Assam Industries order 2005 for pipeline units. In short the Federation submitted the following –

1. That the eligibility criteria for commencement of commercial production should be extended beyond the 31st March,2007.
2. To extend the benefit to all industries, which starts commercial production after commencement of VAT Act but on or before the date as, may be extended as referred in (1) above.