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subsidy scamThe Central government has lost crores of rupees by doling out subsidy to non-existing industrial units in Meghalaya, at a time when industrial growth still remains a far cry in the state.At least nine industrial units, all in the Export Promotion Industrial Park (EPIP), ceased to exist, but not before enjoying a subsidy of nearly Rs 6 crore in the past 15 years.

The information was revealed by the Commerce and Industries department in reply to a RTI query by Tennydard M Marak, a person known for his prolonged legal battle against the ST status of chief minister Mukul Sangma.

The Commerce and Industries department detected the anomalies during a recent inspection and yet to find out since when these industries shut their operation or whether they did not start any operation at all.

“The matter is under investigation and the Public Accounts Committee (PAC) of the state assembly,” said W Langstang, director of Commerce and Industries.

Action will be taken against some of these industries if found responsible for wastage of public money, he added while refusing to divulge any more information on the under-investigation matter.

Among the nine non-existing companies, Maithan Smelters established in 2004 was the highest beneficiary of subsidy (Rs 114 lakh), followed by Meghalaya Carbides & Chemicals (Rs 92 lakh), Trishul Hi-Tech Industries, (Rs 70 lakh), Gita Ferro Alloys (Rs 65 lakh), Shree Ganapati Rolling Mills (Rs 63 lakh), Nezone Alloys (Rs 58 lakh), Bomber Cement Plant (Rs 47 lakh), JG Spices (Rs 37 lakh) and Colortek (Meghalaya) Rs 35 lakh.

Among these non-existing industries, Bomber Cement Plang and Shree Ganapati Rolling Mills were the oldest ones, established in 1999 while Trishul Hi-Tech was the newest, set up in 2006.

Subsidies enjoyed by these industries include capital investment (30%), insurance (100%), transport (90%), power ((3%) and interest on working capital (3%).

The entire subsidy is provided by the Centre to industrial units through the North Eastern Development Finance Corporation Ltd (NEDFi).

Most lucrative among these subsidies, for unscrupulous traders, is the transport subsidy which can be manipulated with minimum chance of getting detected.

Although the Central government provides the subsidy to boost industrial growth in the North-east, many companies exploit the government scheme solely for personal benefit without fulfilling any part of the basic objective.

 

Tribal ‘proprietor’

In a letter written to the department, the RTI applicant Tennydard M Marak raised questions about only one tribal among the three- to seven “proprietors” in each of the nine industries.

For example, Nezone Alloys had only one tribal, Delicent P Marak, among its seven proprietors.

Indicating that this might be the case even with other existing industries, Tennydard said, “The objective of the Industrial Policy 1997 is to give preference to local entrepreneurs in setting up large, medium and small-scale units, but the proportion of local entrepreneurs reveals a different picture.”

However, director of Commerce and Industries W Langstang defending the allotment of license to the companies, saying the existing norms require at least one indigenous tribal proprietor among the proprietors.

“The idea is to let the tribal proprietor gather necessary skills and business acumen to be able to set up his own industry in future,” he said.

(Published as lead article in The Meghalaya Guardian on June 25)

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