Guwahati: The Northeastern region’s call for a new industrial policy has gone unanswered in the 2023-24 Union Budget.
The North East Industrial Development Scheme, which expired on March 31, 2022, has yet to be renewed, causing concerns among the industrial sector in the region. The delays could deter potential investors from entering the region.
“Our expectations for the Northeast were not met by the Budget. The highly anticipated industrial policy is not included in the budget, which has made outside investments in the region cautious due to the lack of a practical industrial policy,” said Sarat Kumar Jain, a prominent industrialist from Assam and chairman of the Indian Chamber of Commerce, in an interview with EastMojo.
During the third North East Dialogue, an interaction with North East Members of Parliament on December 15, 2022, in New Delhi, Union Minister of Law and Justice and Chairman of NE MPs Forum, Kiren Rijiju, had acknowledged the pressing need for a new and improved policy and its impact on the region’s growth and development.
“Despite being pleased with the comprehensive approach to development in the Budget, we in the Northeast are disappointed that there is no mention of the long-awaited Industrial Policy for the region. The share of private investment in the North East has declined significantly since the completion of the North East Industrial & Investment Promotion Policy (NEIIPP) in 2007. We hope that the announcement of a new policy will come soon,” stated the Federation of Industry & Commerce of North Eastern Region (FINER).
The Standing Committee on Commerce, in its 175th report presented to the Parliament, stated: “The Department has not provided any information regarding the continuation of the scheme beyond the specified date. The Committee believes that extending the scheme for a longer period is essential for the accelerated industrial development of the Northeastern Region, especially due to the disruptions caused by the COVID-19 pandemic. Therefore, the Committee recommends that the department consults with industry stakeholders and relevant state governments to extend the scheme beyond April 1, 2022, to allow for new industrial unit registrations.”
The Committee’s report mentioned that the state governments of the North East and the Federation of Industry & Commerce of North Eastern Region (FINER) have expressed strong dissatisfaction with the North East Industrial Development Scheme (NEID), 2017.
FINER welcomed the allocation of Rs. 2491 crores for the North East Special Infrastructure Development Scheme. The scheme provides 100% central funding to the state governments of the Northeastern Region for projects related to water supply, power, connectivity, tourism, education, and health. This is seen as a major relief for the industry and trade sector in the region.
The budget for 2023-24 proposes the revival of 50 additional airports, heliports, water aerodromes, and advanced landing grounds “to improve regional air connectivity”. In recent years, the central government has been improving regional air connectivity through its flagship scheme, UDAN, which focuses on connecting Tier-2 and Tier-3 cities.
“Northeast region, which includes challenging terrain, will benefit greatly from the restoration of these airports. However, the Indian Chamber of Commerce feels that there could have been a special package for Northeast infrastructure development and hopes the government will take this into consideration,” the Indian Chamber of Commerce stated in a statement.
The budget has proposed a record allocation of Rs 22,138 crore for the Micro, Small and Medium Enterprises (MSMEs) Ministry in the 2023-24 budget, aimed at boosting employment in the country. In addition, the government has announced a revised credit guarantee scheme for MSMEs, which will take effect on April 1, 2023, with an injection of Rs 9,000 crore into the fund. This will result in an additional collateral-free credit of Rs 2 lakh crore and reduce the cost of credit by approximately 1 per cent. This will aid in the recovery of MSMEs still struggling from the effects of the COVID-19 pandemic.
The Indian Chamber of Commerce has expressed appreciation for the government’s initiatives to support the growth of the MSME sector. Sarat Kumar Jain, Chairman of the Indian Chamber of Commerce, Assam Chapter, stated that this boost for MSMEs will greatly aid in the acceleration of the Northeast’s growth story, particularly since most industries in the region are in the small sector.
However, the tea sector, which is crucial for Assam, has been entirely overlooked with no mention of it in the budget. The tea industry is facing difficulties with declining prices and exports and had hoped for some relief.
Meanwhile, the FICCI Northeast Advisory Council has praised the Union Budget 2023-24 as a progressive budget that prioritizes inclusive growth.
According to Ranjit Barthakur, Chairman of the FICCI Northeast Advisory Council, the budget takes a well-rounded approach to development and the proposed investments in areas like infrastructure, agriculture, healthcare, education, manufacturing, and digitalization are a positive move.
The focus on improving infrastructure, including roads, railways, ports, airports, and urban transport in the budget, is expected to drive job creation and enhance connectivity in the Northeast region. The 33.4% increase in the capital investment outlay is particularly significant, Barthakur said.
“This will be a major boost to the economy across the nation, but especially in the Northeast where a significant emphasis is placed on infrastructure. We believe that these investments will result in a substantial improvement in the quality of life for the people in the region,” he added.
Barthakur welcomed the measures aimed at boosting business activities in the GIFT City and suggested that the government consider establishing a similar model in the Northeast. He believes this could attract business and investment from Southeast Asian countries, including the ASEAN region, which would give a significant boost to India’s Act East Policy.
FICCI praised the government’s move to extend agriculture credit worth Rs. 20 lakh crore, focus on sectors like animal husbandry, dairy, and fisheries, and launch initiatives like the Horticulture Clean Plant Program to increase the production of high-value crops. “These measures will significantly enhance the livelihoods of farmers in the region and ensure food security for the country,” Barthakur said.
Barthakur also praised the allocation for the Amrit Dharohar scheme. He said, “Preserving our biodiversity is of utmost importance, and wetlands play a crucial role in it, particularly in the Northeast. These efforts will contribute towards reaching the net zero target and create more green jobs in the future.”
Mr Abhijit Barooah, Immediate Past Chairman of the CII North East Council and Managing Director of Premier Cryogenics Limited, welcomed the Union Budget 2023 and praised the announcement of setting up 157 new nursing colleges in collaboration with 157 medical colleges. He said that this will enable India to capitalize on its demographic dividend. Barooah also highlighted that Indian nurses, particularly from the Northeast states, are in high demand globally and the identification of a few such colleges in the region will benefit the area.
He further stated that the upgrading of support for self-help groups in the procurement of raw materials and skill development will provide strong returns for the Northeast economy.
The energy sector has received significant attention in the budget and the Northeast, with its four oil refineries, is expected to benefit from the allocation of Rs 19,700 crore to the National Hydrogen Mission. The mission aims to increase hydrogen production capacity to 5 million metric tonnes by 2030, aligning with the country’s net zero and green commitments.
The government’s plan to promote tourism on a mission mode in 2023 will also help the Northeast region. The development of destinations in the region will introduce new tourist spots and enhance the Northeast’s presence on the tourism map.
The proposed increase in the number of teachers and support staff in Eklavaya Model Residential Schools will improve the quality of education in the remote areas of the North East. The support for artisans in terms of capacity building and market linkages, as announced in the budget, will also empower the transformational and mass-driven handloom and handicraft sector in the region.
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Pradeep Bagla, Chairman of CII North East Council and Managing Director of Amrit Cement Limited, said that the measures aimed at boosting agriculture in the region would benefit aspiring startups, entrepreneurs, and farmers.
He welcomed the availability of quality planting materials for millets, the Agri accelerator fund to support agricultural startups, and the increased focus on natural farming. He noted that the increased credit target of Rs 20 lakh crore for the agriculture sector, with a focus on animal husbandry, dairying, and fisheries, will drive growth and improve farmers’ incomes.
“The reduction of over 39,000 compliances and the decriminalization of more than 3,400 legal provisions will provide a major boost to the ease of doing business for startups in the Northeast. The National Data Governance Policy for startups, which aims to provide access to anonymous data, and the establishment of three AI centres of excellence in partnership with the private sector in India will also boost AI startups in the country and the region,” he said.
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