: Directorate of Economics and Statistics, Assam.
The above table reveals that the
industrial production in Assam evidenced a continuous upward trend since
1971, the annual rate of growth being about 4 percent. But the increase in
the industrial production varies in different years. The index of
industrial production (base 1970=100) in the registered factories
increased by over 20 percent during 1970-77. The increase in 1976 over
1975 was 6 percent while that in 1977 over 1976 has been estimated at 2
percent. The table further shows that the indices of I ndustrial
production (Base 1970=100) of the industrial groups like-grain Mills
producct, Manufacture and refining of Sugar, Manufacture of other edible
oils and fats and Manufacture of products of petroleum not elsewhere
classified have been gradually declining and reached the level of 64, 54,
76 and 36 respectively in the year 1981. Again in 1991, the same indices
changed to 114, 40, 159 and 71 and in 1994, these indices again reached
the level of 98, 15, 57 and 17 respectively.
But the indices of industrial
production of the industrial groups like Manufacture of Jute textiles.
Manufacture of venner plywood and their product, Manufacture of
Fertilizers and pesticides and Aluminimum manufacturing have been
increasing satisfactorily and reached the level of 275, 315, 382 and 198
respectively in the year 1981. In the 1991, these same indices increased
to 353, 278, 716 and 122 and in 1994, these indices again increased to
302, 454, 47 and 188 respectively. The indices of other industrial groups
like Tea processing, Sawing and planking, Petroleum refinaries,
Manufacture of Cotton textiles have been increasing at a slow rate and
reached the level of 145, 152, 136 and 119 respectively in the year 1981.
Whereas the indices of production of Match industry remained more or less
stationary. In 1994, these same indices again increased to 188, 115, 265
and 107 respectively.
It is also observed that the
indices of production (Base=1970) of All industries combined in the State
gradually increases to 133 in 1979 and then to 145 in 1981. Again in 1991,
the indices of production of all industries increased to 190 and in 1994,
the same indices further rose to 204. The index also reveal that the index
was lower by 7.5 percent in 1980 over 1979 and 8.9 percent in 1979 over
1978. But the production performance in the manufacturing sector of the
State which suffered a slowing down in the year 1979 and 1980 has regained
the lost ground in the year 1981. Again, the indices of industrial
production (all industries combined) has recorded an 3.8 percent increase
in 1991 over 1990 and recorded a marginal increase of 1.5 percent in 1994
over 1993. It is also evident from the available data that during 1981
production of fertiliser, refinery products, jute textiles, Plywood and
Cement have increased in varying proportions as compared with the
preceding year. Production of sugar fertiliser, paper and match displayed
some fall during the year.
Role of Organised and Unorganised
Industries in Assam
Assam got its berth in the
industrial map of India since the preindependences period. During the
British period, the process of industrialisation was initiated in Assam
with the growth of tea and oil industry. With the development of these two
industries, the industrialisation process gained its momentum in the last
half of the British period and subsequently after independence.
The industries in Assam can be
broadly classified into- (a) Organised industries and (b) Unorganised
industries. The organised industries of Assam includes Tea, Petroleum,
Paper, Cement, Plywood, Coal, Jute, Sugar etc. The unorganised industries
of the state include the small and cottage industries, Khadi and village
industries etc. Both the organised and unorganised industries are playing
a very important role in the economy of the state. Tea and Petroleum
industries are the two important organised industries of the State which
has been playing an important role of sustain the economic development
process of the State. Moreover, the other organised industries alongwith
unganised industries like various small and cottage industries and the
Khadi and village industries are also playing a very important role in the
state, especcially, in the rural economy of the state. The following are
some of the important roles played by these organised and unorganised
industries of the state :
1. Utilisation of huge volume of
natural resources has become possible with the development of these
various types of organised and unorganised industries in the State. Assam
is still possessing a huge volume of various types of mineral, forest and
agro-based resources which are mostly remain unutilised. Development of
these industries can tap these resources to the fullest extent.
2. Development of these
industries would increase the job opportunities for huge number of
population of the State. Agro-based industries and the unorgansed
industries, being labour intensive, are providing a huge number of
employment opportunities in the state. Tea industry aloe provides direct
employment to more than 5 lakhs of persons daily. If more such idustries
materilise fully, the problem of unemployment could be solved easily in
the state.
3. Organised and unorganised
industries are contributing a good portion state income. The manufacuting
industries has contributed 15.5 percent of the total state income in
1993-94.
4. Organised industry like tea
industry of Assam are supplementing a good volume of export requirement of
the country. Assam’s share of tea export was more than 55.0 percent of
the country’s total sales abroad. Similarly, the petroleum and Petro-chemical
industry of Assam has also a considerable import-substitute component.
5. Development of organised
industries has led to the growth of a good number of ancillary industries
in the state.
6. Development of these different
industries has to the development of markets for various raw materials and
finished product in the state.
7. Finally, development of
various organised and unorganised industries will help good in the
creation of industrial climate in the State. The expansion of tea industry
in Assam has led to the growth of many smal industries viz, industries
producing tea machineries and implements, tea chests plywood industry etc.
Contribution of Manufacturing
Sector to State Income
The manufacturing sector of Assam
is very poor in its size. Thus its contribution to state income is also
very poor. Being industrially poor, the State’s economy cannot expect
sufficient income out of this sector. Ths the percentage of income derived
from manufacturing (including tea processing, factory establishments and
small enterprises) out of total state income remaind at a poor level as
the economy of the state is mainly an agrarian one.
In 1950-51, contribution of the
manufacturing sector to the state income was around 15.6 percent and then
its contribution increases to 17.2 percent in 1955-56 and further to 17.7
percent in 1960-61. In 1965-66 the contribution of the manufacturing
sector the state income (at 1948-49 prices) stood at Rs. 64.6 crores which
came around 17.4 percent of the total state income. In 1969-70, the
contribution of this sector althuogh increased marginally to Rs. 77.4
crores but its contribution declined to 15.1% of the total state income.
From 1970-71, the state income
has been calculated at 1970-71 (constant) prices. Taking the
manufacturing, construction, Electricity, Gas and Water supply within a
particular group its share in the state income of 1970-71 was to the tune
of Rs. 108.0 crores, contributing 13.9 percent of the total state income
of Assam. In 1973-74 although its share remained at the same level of Rs.
108.7 crores but its contribution declined to 12.5 percent of the state
income. In 1977-78 the share of this manufacturing and allied sector
gradually increased to Rs. 130 .0 crores but its contribution remained at
the same level of 12.7 percent of the state income.
The contribution of the
manufacturing sector alone to the state income of Assam (at 1970-71
prices) was Rs. 92.4 crores in 1977-78 then it increased to Rs. 98.7
crores in 1978-79 and then gradually declined to Rs. 97.8 crores in
1979-80 and Rs. 92.0 crores in 1980-81. Further, the share increased to
the level of Rs. 104.9 crores in 1981-82 (provisional). The shares of this
manufacturing sector alone to the total state income of Assam were 9.8
percent in 1978-79, 10.0 percent in 1979-80, 8.4 percent in 1980-81 and
9.4 percent in 1981-82
The share of manufacturing sector
to the net state domestic product at current prices has increased from 6.9
percent in 1980-81 to 10.2 percent in 1990-91 and to 10.56 percent in
1991-92. The same share at constant prices(1980-81) has also increased
from6.9 percent in 1980-81 to 13.37 percent in 1990-91 and then to 15.50
percent in 1993-94.
Again the contribution of the
entire secondary sector which includes manufacturing industry,
construction, electricity, gas and water supply to the net state domestic
product of Assam at 1980-81 prices has increased from 11.8 percent in
1980-81 to 19.45 percent in 1990-91 and then to 23.00 percent in 1993-94.
Thus from the above fact it
reveals that the contribution of this manufacturing sector to the State
income of Asam has been gradually increasing at a slow rate. The reason
behind this trend is that the manufacturing sector could not expand at a
desired rate and thus the agricultural sector is still dominating the show
accounting 33.5 percent of the total state income of Assam. Thus the
economy of the State is yet to be diversified. This required that the
industrial sector should expand at a rapid scale and new industries both
large and small scale, should be developed on the basis of available
natural endowments.
Planwise Achieements of
Industrial Sector
During British period the
industrial development in Assam was very poor. Even the basic
infrastructural facilities which were essential for industrial development
were more or less absent. After independence, although planning started in
Assam along-with the other states of the country but the aims of the State
plan were tilled towards the development of agricultural sector neglecting
the industrial sector.
During the first decade of
planning the industrial sector practically remained stagnant. It was
during the Third Plan that the industrial development programmes were
accelerated to provide much needed boost to the growth-including factors.
The State Government also directed its vigorous efforts with its limited
resources towards creation and development of adequate infrastructure like
expansion of the facilities of power, transport, providing technical
training, and also undertaking surveys and investigation of raw meterials,
developing industrial sites, and participation in the share capital of
private enterprise. Thus a favourable climate for investment in industries
had been created with all these development. But the response of the
private investment was not so much encouraging. Public investment of the
central sector in the State was also meagre. But prospect has brightened
with the decision taken later by the Government of India to set up number
of resource based industries in the State.
Towards the latter part of the
Second Plan and the erly part of the Third Plan a number of new
industries, namely a bicycle factory, a spun silk mill, two cotton
spinning mills, a house service meter factory, some re-rolling and
fabrication units, a mixed fertiliser plant, a Jax board factory, a hard
board factory, a sugar mill (a Co-operative enterprise) and a
fruit-processing plant were set up in the small or medium scale sector.
The capacity of the existing industries notably in plywood and saw mills,
flour and oil mills, motor repairing and general engineering was also
expanded.
Besides two major projects viz :
Noonmati Refinery (Third Plan) and Namrup Fertiliser Plant ( spilled over
to Annual Ad-hoc plans) both in the central Government sector and the
third, the Gas Distribution Project- Assam Gas Company inthe State
Government sector were established. All these above mentioned projects are
resource-based which supported a number of ancillary and subsidiary units.
The most prominent among these is India carbon products Limited (based on
Noonmati Refinery). Late in the Third Plan, the State Government took over
from the private sector, implementation of the Cherra Cement Projects
which started production in 1966.
During the Fourth Plan, the pace
of industrialisation in the State was accelerated with the establishment
of number of resource-based industries mostly in the public sector located
in some of the relatively backward areas of the state. During the Fourth
Plan, some new industries were set up which included Assam Co-operative
Jute Mill at Silghat, Assam Alkali Allied and Chemicals Ltd., at Jogighopa,
Ashok Paper Mill at Jogighopa. Further, some of the existing industries in
the State were also expanded during this plan period. Among those included
were the Cherrapunjee Cement Factory whose production capacity was
expanded from 250 tonnes to 850 tonnes per day. The Assam Gas Company has
laid down another pipeline connecting Moran Gas grid with Namrup to meet
the requirement of natural gas of the Namrup Fertiliser Plant for its
expansion. The production capacity of the Namrup Fertiliser Plant has also
been increased by three times in terms of ammonia production.
The setting up of Assam
Co-operative Jute Mill at Silghat in Nowgong district at a cost of Rs.1.65
crores with 150 looms, sufficient to produce 7,000 tonnes of Jute Products
was an important step towards industrialisation of Assam. Then the Ashok
Paper Mill was set up at Jogighopa with production capacity of 120 tonnes
of pulp and 90 tonnes of paper per day at the cost of Rs.15 crores. But
due to mismanagement this mill incurred a huge amount of loss and now the
mill is closed. A huge mechanised company is gradually being wasted due to
lack of maintenance. Along with this the Assam Alkali Allied and Chemicals
Limited was also set up at Jogighopa as a captive unit for the Ashok Paper
Mills Limited at a cost of Rs. 2.5 crores. But the fate of the company is
also similar to that of Ashok Paper Mill.
Further, the Assam Petro-Chemicals
Limited was set up at Namrup with Japanese Collaboration at cost of Rs. 5
crores. This project is based on natural gas for manufacture of methanal
formaldehyde, urea formaldehyde, resins etc. A sugar mill was also set up
at Cachar at cost of Rs. 2.60 crores.
Thus during 19 years of planning
till the Fourth Plan the number of registered factories in Assam increased
from 911 in 1951 to 1588 in 1969 and employment in these factories
increased from 65.1 thousand to 79.4 thousand over the same period. The
backwardness of the State in industrial sector can be gauged from the fact
that her share in the total national net output from manufacturing
industries which was barely 2.35 percent in 1960-61 gradually came down to
1.68 percent in 1965-66 and then to 1.62 percent in 1968-69.
Some of the important industries
which were commissioned during 1976-77 and 1977-78 i.e., during Fifth Plan
are the Bokajan Cement Factory belonging to the Cement Corporation of
India, the Assam Petro-chemical complex, Namrup and the Cachar Sugar Mills
Limited . Among the factories registered during 1978 are the Bongaigaon
Refinery and Petro-chemicals Limited (BRPL) which has the highest number
of employees (1000) . It was proposed to establish a cement plant at
Garampani, a spinning mill of 25,000spindles-based on BRPL polyester fibre
at Bongaigaon. It was also envisaged to set up a vanaspati plant, a
finished leather project, a drug formulation project of IDPL . In the mean
time the vanaspati plant has started its commercial production in 1985.
The State Government of Assam is
not only patronising establishement of industries in the private sector
but also increasingly involved itself in undertaking many industrial
venture of its own . Due to these efforts, a few important resource and
demand-based industries have come up in the state in the recent past and a
few more are in the offing.
Recently, the state government
has identified five sectors for state investment and major thrust areas in
the coming years. The five sectors are down stream units of the
gas-cracker project, plastic-based industries, textile industries,
lime-stone based industries and the electronic sector. The state
government has also formed an Industrial Advisory Committee to guide the
state government in formulating its policy for the development of
industrial infrastructure, identifying priority sector for generation of
maximum employment and other field f industrial development in the state.
Registered Factories in Assam
Total number of industrial
factories registered in Assam is also an important Indicator for the
progress of industrialisation in the state. The following table shows the
total number of registered factories in Assam since 1971.
Table No. 8.3
Number Registered Factories in
Assam
Chief
of Factories, Assam.
The table given above reveals
that over the past few years there have been a steady increase in the
number of registered factories in the state. Total number of such
factories in the State which was 1604 in 1971 increased to 1897 in 1980
and then to 2462 in 1985. Since then again the number of registered
factories started to increase during the Seventh Plan and accordingly the
total number increased from 2503 in 1986 to 2523 in 1986 to 2523 in 1988
and then to 2567 in 1989. Another set of 110 new factories were registered
in the year 1990 bringing the total number of registered factories in the
state to 2677 at end end of the year 1990. In 1994, total number of
registered factories declined to 2438. Total number of workers employed in
these factories has increased to 90.1 thousand in 1988 as against the
number of 90.7 thousand in 1981 and about 87.7 thousand in 1980. There are
very few large scale employment-oriented industries in the state.
There are, at present only four
factories which employ 1000or more workers. Tea factories account for
about one-fourth of the total registered factories in the state. Total
number of tea factories in Assam was 570 in 1990 and average number of
labourers employed daily in tea industry was 5.42 lakhs.
Further, for accelerating the
process of industrial development in the state a host of organisations
have been set up by the state Government viz.; the Assam Industrial
Development Corporation, the Assam Small Industries Corporation, the Assam
Small Industries Development Corporation etc. During the first year
(i.e.1980) of the Sixth Plan a new organisation under the name of the
Assam Industrial Promotion and Infrastructure Corporation has been set up
for developing infrastructural facilities in the state. Besides, another
organisation, viz ; the Assam State Textile Corporation Ltd. has recently
been incorporated as a Government Company for promoting textile industries
based incorporated polyester staple fibre made available from the
Bongaigaon Refinery and Petro-Chemicals Ltd.
Assam Industrial Development
Corporation (AIDC)
The Assam Industrial Development
Corporation (AIDC) was established on 21st April, 1965,i.e., during the
Third Plan. The main objective of this corporation is to accelerate the
pace of industrial development in Assam. The AIDC, which is a State
Government undertaking, is reported to be taking various steps for the
promotion and development of large and medium scale industries in the
state, Till February 1990, the AIDC is reported to have provided financial
assistance to 61 number of projects under the IDBI refinance scheme, of
which 32 projects reported completion and 28 projects under
implementation. The volume of term loan and seed capital sanctioned by
AIDC under the aforesiad scheme amounted to Rs. 44.36 crores and Rs. 1.12
crores respectively upto the end of February, 1990. According to the
information available from the Directorate of Industries, Assam, a total
of 15 large and medium scale industrial units and 285 number of SSI units
were assisted by sanctioning capital investment subsidy to the tune of Rs.
91.62 lakhs and Rs. 4.95 crores respectively during 1988-89.
The Assam Industrial Development
Corporation has taken the following industrial Projects in the State : (a)
Spinning mill, (b) Phthalic Anhydride Project, (c) Methanol Expansion
Project (d) Expansion of Assam Gas Company etc. Constructionwork of some
of these projects has already been started during the Seventh Plan. Works
on the rest of these projects are now being taken during the Seventh and
Eight Plan.
In the mean time, the area and
the size of operation of AIDC has been enlarged to a large extent. The
construction and installation works of some industrial Projects completed
by this Corporation include-Assam Petro-chemicals Limited, Fertichem
Limited, Cachar Sugar Mill, Assam Syntex Limited etc.
Functions
: In recent times, the AIDC is performing the following functions :
1. Indentification,
implementation and promotion of large and medium scale industrial projects
in the state both of state public sector and joint sector.
2. To Participate in the equity
capital of private sector industrial units so as to provide them financial
assistance.
3. Implementation of package
scheme of incentives like disbursement of capital subsidy and transport
subsidy for the benefit of entrepreneurs.
4. Providing term loan assistance
to medium scale entrepreneurs under IDBI’s Refinance Scheme.
5. Providing Seed Capital
Assistance to new entrepreneurs.
6. Management and rehabilitation
of sick industrial units.
7. Development of Industrial area
and Growth Centres.
8. Imparting in-plant training to
educated unemployed youths.
9. Operation of Udyog Sahayak.
AIDC is now working with the
following industries which are at various stages of implementation and
planning :
1. A 2000 TPA Polyester Film
Plant.
2. A 15000 TPA Polyester Filament
Yarn Plant.
3. A 35000 TPA Galvanised Plain
and Corrugated Sheet Plant.
4. Weaving Complex.
5. Sack Kraft (Extensible Paper)
Project.
6. Textile Processing Unit.
7. Sponge Iron Project.
8. One million tonne Cement
Plant.
9. Finished Leather Project.
10. A Jute Mill
11. A Gas Separation-cum-Cracker
Project (including Petro-chemical Project).
12 A Drug Formulation Unit.
Thus AIDC has been contributing a
lot in respect of industrialisation in Assam.
Task Fource
The Government of India set up a
Task Fource in October 1980 and it identified a number of Projects based
on down strame products of BRPL. The Task Fource suggested establishments
of 20 spinning mills in the State exclusively for producing blended yarn
and also for full use of 30 thousand tonnes per annum of polyester staple
fibre produced, at BRPL. If these projects materialise during the Seventh
and Eight Plan, the process of industrialisation in Assam is expected to
get a boost besides generating employment avenues for about 1. lakh
persons. Already work for setting up 6 spinning mills both in the public
and Co-operative sectors in the State are progressing satisfactory. Among
hese mills, three mills, will have the capacity toproduce 25,000 metres of
cloth daily. Thus we can hope that if everything runs suitably, industrial
development in Assam will have a boost in near future.
But in the mean time, the
spinning mill established at Noapara under the Bongaigaon district and
which was sponsored by AIDC has already transferred to the private sector
after incurring a huge loss due to its organisational problems.
The Task Force set up by the
Government of Assam (as per clause no.7 of Assam Accord) submitted its
report on 5th April, 1988. The suggestions forwarded by this Task Force
for the industrialisation of the State Include- to set up a highly
sophisticated electronic industry in Assam, to establish ancillary
industries which are directly and indirectly related to tea and petroleum
industry, to establish domestic and government demand based industrial
projects and to set up agro-based industries. Moreover, this Task Force
suggested to establish a new industrial development centre-
"Industrial Town" having 2000 hectares of land and other
infrastructural facilities in the central part of the state.
Prospect of Industrial
Development during the Seventh and Eight and Ninth Five Year Plan in Assam
In respect of Industrial
development, Assam is lagging far behind the other industrially developed
states of India. Although Assam is endowed with different types of natural
resources but its utilisation are miserably poor. Until and Unless these
natural resources are being used within the territory of the State, the
State cannot expect a boost in the level of development in its economy.
Industries developed till the end
of the Sixth Plan in Assam are not at all satisfactory considering the
degree of economic problems faced by the State. Traditional Tea industries
and oil industries are still dominating the economy of Assam. If we want
to develop the economy of the State, the industrial diversification on the
basis of natural endowments of Assam.
The Government of Assam had taken
a decision in February, 1985, to set up one industrial area ineach
district headquarter of Assam during the Seventh Five Year Plan. Thus the
schemes have been prepared and the following places ‘Lolabari’ and ‘Bihupuria’
of North Lakshimpur district, ‘Malinibil’ of Cachar district, ‘Rani’
of Kamrup district and ‘Lahowal’ of Dibrugarh district have been
selected for the purpose.
Further, the Government of Assam
has also selected some Petro-chemicals Project for its successful
installation during the Seventh Plan period. These projects includes :
(a) Polyester filament yarn
project
(b) Polyester film project
(c) Phthalic anhydride project
(d) Methanol Project
In their memorandum, submitted
earlier to the Central Government, the State Government demanded
establishment of another oil refinery and a Gas processing unit. Besides,
the Plan to establish one ‘Gas grid’ and a ‘sponge’ iron project’
based on natural gas was also examined.
The Government of Assam and the
Central Government has also examined another plan to develop ‘Assam
Electronics Development Corporation’, for producing various types of
electronic goods. This Corporation will produce various electrical inputs
for tea industry, drug industry and for agricultural sector of Assam. In
the mean time, this corporation has started its production.
Further, the State Government of
Assam has also taken a decision to establish one mini-steel industry in
which they have planned to establish one ‘Sheet Plant’ in Assam during
the Seventh Plan period.
Bwsides, the work of
establishment of six spinning mills, which started during the Sixth Plan
Period, are now progressing well. Some of these mills have started their
commercial production during the Seventh Plan period and some others are
expected to do so during the Eight Plan. With the Commissioning of the
petro-chemical Section of B.R.P.L. many new small textile units will come
up on the basis of polyester fibre produced by B.R.P.L.
Prospect of the development of
many downstream industries on the basis of the petro-chemicals from
B.R.P.L. is quite bright. This includes the products like plastic,
pesticides, photo film, resin, detergent, P.V.C. compound etc. The
prospect of developing other industries in Assam includes forest based
industry, mineral-based industry, agro-based industry and textile
industry. It is expected that some of these projects will be developed
during the Eight and Ninth Plan period.
In the mean time, the Numaligarh
Refinery Limited under the join sector has started its construction works.
On 22nd April, 1993, this company was formed officially. As per the
primary estimate, total investment of this company would be around Rs.
2000 crores and the total refining capacity would be around 2 million
tonnes. Moreover, it has been decided that the State Government will hold
10 percent of the equity capital, Indo-Burma Petroleum Company will hold
51 percent of the equity and the remaining 39 percent equity capital will
be collected from the primary market.
Moreover, the efforts to set up a
Gas Craker Project in Assam has been progressing satisfactorily. Again,
the expansion programme of Bongaigaon Refinery and Petrochemicals Limited
has been almost completed in May, 1995. With the completion of this
expansion programme the refining capacity will just double from the
present level of 1.35 million tonnes per annum to 2.7 million tonnes per
annum. The Government of India approved this expansion programme for the
BRPL on 31st December, 1991 and alloted Rs. 223 crores for the project,
which has already been completed in May, 1995, Moreover, the Central
Government has taken steps for the modernisation of Digboi refinery and
Namrup fertilizer unit.
Moreover, the State Government
has identified five sectors for state investment and major thrust areas in
the coming years. The five sectors are down stream units of the gas-
Cracker project, Plastic based Industries, textile industries, lime-stone
base industries and the electronics sector. The state government has also
formed an Industrial Advisory Committee to guide state government in
formulating its policy for the development of industrial infrastructure,
identifying priority sector for generation of maximum employment and other
fields of industrial development in the state.
Moreover, under the peresent
scenario of economic reforms introduced throughout the country, the state
government has been exploring the possibilities of disinvestment and
privatisation of some of the existing state public sector undertakings. In
the mean time, a few state public sector udertakings have already
privatised by the State Government.
Besides, the State Government and
Central Government are also trying to develop some resource-based
industries during the ensuring Ninth Plan with the participation of some
Indian private sector companies and some foreign companies. Thus if a
conducive atmosphere can be created for the industrialisation of the
State, then the benefit of economic reforms, which has not yet been
reached the state, can be expected to prevail upon during the Ninth Plan.
This needs an all-out efforts from difficult angles.
Industrial Policy of Assam
Industrial Policy of Assam,1986
In December, 1986 the new
Industrial Policy of Assam was announced by the A.G.P. Government for
serving the local interests. The new policy aims at encouraging growth and
promotion of all industries based on local resources, local demands, local
scarcity conditions and local environment. In this new Policy, the State
Goverment attaches priority to speedy industrial development of the state
as well as generation of adequate employment opportunities through
self-employment opportunities through self-employment in the industrial
sector.
In the new industrial policy,
special provisions have been made to protect the interests of the local
people by making the state incentive schemes availablein the case of the
small sector. Iin order to become eligible for the benefits under the
state incentive scheme thre should be hundred percent employment of local
people in the small industry sector. In the medium and large industry
sector, local employment would have to be ensured in 80 percent in the
managerial cadre and 90 percent in the non-managerialcadre. Over a period
of five years from the date of commencement of production, these medium
and large units would have to take effective steps to ensure 100 percent
employment of local people in the non-mamagerial cadre and least 90
percent in the managerial cadre.
In the new industrial Policy, the
State Government has announced a package of incentives for the benefit of
the entrepreneurs to start industries in Assam. The package of incentives
include subsidy, allotment of factory sheds to small sector industrial
units, manpower development of local entrepreneurs, equity participation
in assisted sector, exemption of stamp duty, sales tax exemption,
reduction of Assam Finance Tax, Power subsidy, subsidy on drawal of power
lines, rehabilitation of viable sick industrial units, contribution to
feasibility study cost, subsidy on generating set, risk capital formation,
special incentives for industries being set up in no industries district
and for electronic industries.
The new industral policy makes
provision for single windows facilities through "Udyog Sahayaks",
This "Udyog Sahayaks" has been created at each District
Industries Centre and in Directorate of Industries sector and at the Assam
Industrial Development Corporation for medium and large scale industrial
sectors. The Udyog Sahayaks provide single window facilities to
entrepreneurs and also ensure expeditious identification of enrepreneurs
and projects, registration, processing and forwarding of financial
proposals to the agencies concerned, issue eligibility certificates
coordination, sanction, delivery of incentives and follow up steps for
rapid implementation of projects.
It is now expected that the
prospect of speedy industrialization in Assam will be brightened with the
various industrial projects coming up during the Seventh Plan Period in
the public sector, Joint Sector, Co-operative sector, assisted and private
sector. This prospect will be further brightened with the development of
industrial infrastructure in the State in a phased manner and also with
the Central Government setting up major industrial and other projects in a
big way.
Industrial Policy of Assam, 1991
After the announcement of new
industrial policy in July, 1991 by the Narasimha Rao Government at the
Centre, the Government of Assam has also announced its new industrial
policy keeping conformity with the Central policy. Although the initial
notification of the policy was made on 6th April, 1991 but the final
notification of the Policy was made on 1st July, 1992. While framing this
new policy, although the state Government has followed the central policy
directions but it has also duly considered the local issues and problems
faced by the State.
Policy Guidelines and Objectives
The new industrial policy (1991)
has set certain definite policy guidelines and objectives to meet its
requirement of industrial development along with generation of employment
opportunities. In view of the priorities attached by the Government to the
speedy industrial development of the state as well as generation of
adequate employment opportunities through self emploment in the industrial
sector, it had been considered necessary to review and revise the existing
industrial policy and incentive scheme which became operative from 1st
January, 1987.
The New policy has been
formulated with the experience of the 1986 policy and keeping in view the
shortcomings of the 1986 policy which have come to notice. While framing
the new policy, recommendations made in a seminar held in February, 1990
to review the 1986 policy have also been kept in view so that the genuine
aspirations of the people can be met within a time frame through economic
and industrial development of the State. The new policy aims at
encouraging growth and promotion of all industries based on local scarcity
condition, local environment and to the extent possible by utilising
locally available raw materials.
In the new industrial policy,
1991, the Government of Assam has accepted the following policy guidelines
and objectives :
1. To ensure balanced regional
development throughrapid promotion of a host of Khadi and Village
industry, cottage industry, tiny, small and ancillary industries
throughout the state on the basis of techno-economic potential surveys.
2. To set up/promote setting upof
Medium and Large Industries in the State/Joint/Co-operative/Assisted and
Private Sectors, using the advantage of local availability of Petroleum,
Natural gas, Coal, lime-stone and other minerals, agricultural products
and other resouces of the State. High priority will be given to the
utilisation of natural gas for setting up gas-based industries which have
a high downstream potential.
3. To create a suitable
environment by taking effective steps for the development of basic
infrastructure facilities for industrial development.
4. To ensure that there is proper
development of local skills and entrepreneurship through intensive
publicity, motivation and training programmes at district, sub-division
and block level.
5. To promote and protect the
interests of the people of Assam by making the various incentives
available on the condition of the unit satisfying certain laid down
conditions of a minimum percentage of employment of the people of Assam.
6. To ensure that local
entrepreneurship is given preference in setting up medium and large
industrial units under the Refinance Scheme of I.D.B.I. as well as under
the "Assisted Sector" Scheme which is being operated by the
A.I.D.C. Ltd.
7. To encourage the traditional
artisan and handdicraft sector covering items, such as, cane and bamboo
products, brass and bell metal, etc. by providing common facilities
service centres, raw-materials, marketing, technical and other supports,
as may be required from time to time.
8. To ensure viable growth and to
give positive guidance to local entrepreneurs, by building up a data bank
at the Directorate of Industries and at A.I.D.C. with a shelf of specific
project profiles and other vital information.
9. To give a special attention to
the less developed districts and the Hill Districts in developing the
industrial infrastructures and esablishment of medium and major projects.
10. To extend all possible
assistance for shifting of the Head Offices of the Tea Companies to Assam
for ensuring continued growth of the tea industry and additional
employment avenues for unemployed youth. The Inland Container Depot,
Guwahati Tea Auction Centre and Guwahati Stock Exchange would be
encouraged and supported in their efforts for industrialisation and
creation of employment opportunities for local people.
11. To provide for a single
windows clearance agency at each District Industries Centre for the small
sector and at A.I.D.C. for the medium and large sector.
12. To provide for the revival of
viable sick units through proper identification and provision of
comprehensive package of assistance and to take steps for periodical and
regular monitoring and guidance to new units to avoid sickness.
Definitions and Criteria for
Eligibility in the Incentive Scheme as Incorporated in the New Industrial
Policy
The new industrial policy has
finalised its incentive scheme and its eligibility limit for the
successful implementation of the policy. The new package of incentives
herein after referred to as ‘1991 Incentive Scheme’ shall remain in
operation for a period of 5(five) years commencing from 1.4.1991 or till
such time as the Government may consider fit and proper.
Effective Date
: The effective for 1991 Incentive Scheme is 1.4.1991 and from this date
the 1986 Incentive Scheme and 1982 Incentive Scheme under the 1986. 1982
and other relevant Industrial Policy resolutions will cease to be
operative unless otherwise provided for.
Units enlisted under 1986
Incentive Scheme but completing final effective steps after the effective
date of 1991 Incentive Scheme will be governed by the 1991 scheme.
All industries which are to be
notified as non eligible by the Government will be entitled to assistance
under the 1991 scheme. Incentive under the 1991 scheme will be available
to eligible units in the Private Sector. Assisted Sector, Joint Sector,
State Public Sector and the Co-operative Sector Central Public sector
undertakings will not be considered as eligible for incentive under the
scheme either for their own ventures or for their joint ventures. Such
units will however be eligible for manpower development subsidy.
Eligible Unit
:
Only new units set up on or after
1.4.1991 and existing units, undertaking expansion, modernisation or
diversification at the same location or at any other place in the State of
Assam will be eligible for incentives under 1991 Scheme provided that the
following conditions are fulfilled :
(I) A unit shall have employment
of 80 percent people of Assam in the managerial cadre and 90 percent
people of Assam in the non-managerial cadre and that over a period of 5
years from the commencement of production such units would take all
effective steps to ensure 100 percent employment of people of Assam in
non-managerial and at least 90 percent in managerial posts. They would
further give an undertaking that if these conditions are violated, the
State Government Subsidies/Incetives so availed by them would be fully
refuned.
(ii) In exceptional cases where
the industrial units can prove to the satisfaction of the State Level
Committee that persons with required skill and expertise are not locally
available, relaxation of the above clause will be allowed by the State
Level Committee as deemed fit.
(iii) The location of the
registered office shalll be within the State of Assam.
New Unit
:
An industrial unit which has
taken all the initial effective steps on or after 1.4.91 would be
considered as a new unit.
Existing Unit
:
A unit which is or was in
commercial production at any time prior to 1.4.91 will be considered as an
existing unit for the purpose of the 1991 Scheme.
Expansion/Modernisation/Diversification
:
Expansion/ Modernisation/Diversification
of an existing industrial unit will also be eliglble for all incentives if
the total capital investment on plant and machinery in the expansion/modernisation
or diversification, as the case may be, is more than 25 percent of the
total fixed capital investment of the existing unit. For the purpose of
calculation, Gross value of all the capital investments made on land,
builiding, plant and machinery of an existing unit will be taken into
consideration. Expansion modernisation diversification will imply an
increase of at least 25% in the existing installed capacity as well as
increase of additional employment at least by 10%.
The fact that existing unit has
availed itself of incentives will not disqualify the expansion/modernisation/diversification
project to get incentives for the extra investment made.
Sick Unit
:
A unit declared as asick unit by
the State Govt. under Assam Industries Relief undertaking (Special
Provision) Act, 1984 (Assam Act No. VII of 1984) from time to time.
Effective Steps :
Effective steps will comprise of
initial effective steps and Final effective steps.
A unit will be deemed to complete
the initial effective steps if all the following conditions have been
achieved :
(a) effective possession of land.
(b) registration of the firm or
the company or the soiety or the trust with the approprite authority.
(c) provisional SI registration/SLA
registration or any other statutory registration with the appropriate
authority.
(d) project Report has been
prepared.
(e) power has been sanctioned.
(f) the means of finance for the
project is completed including sanction of term loan.
A unit will be deemed to have
completed the final effective steps if the following targets have been
achieved :
(a) Disbursement of term Loan to
the full extent.
(b) Mechanical completion of the
plant.
(c) Receipt of all relevant
approvals and clearances from the appropriate authorities e.g. pollution
clearance C.G. clearance, Explosive clearance, Municipal clearance etc.
(d) Connection of power.
(e) Allotment of raw materials
wherever applicable.
(f) Sanction of working capital.
(g) Commissioning of the plant.
(h) Receipt of local employment
certificate.
No right or claim for any
incentive under the scheme shall be deemed to have been conferred by the
scheme merely by virtue of the fact that the unit has fulfilled on its
part the conditions of the scheme. The incentives under the Scheme cannot
be claimed unless the Eligibility Certificate has been issued under the
Scheme by the implementing Agency concerned and the unit has complied with
the stipulations/conditions of Eligibility.
Eligibility Certificate
:
Eligibility Certificate is the
certificate which will be issued by the Udyog Sahayak of the Directorate
of Industries/District Industries Centre for the SSI sector and Assam
Industrial Development Corporation Ltd. (AIDC LTD.) for the medium and
large sector. This will be issued after ensuring that all the norms for
eligibility have been fulfiled.
Certificate of local employment
will be issued by the Officer incharge of the concerned implementing
agency.
Completion of initial effective
steps will qualify the unit for issue of a provisional eligibility
certificate based on which disbursement of contribution of feasibility
study cost as well as development subsidy can be made.
Completion of the final effective
steps will be required for issue of a final eligibility certificate and
disbursement of the remaining incentives of the subsidy.
Implementing Agencies
:
The implementing agency for the
1991 Incentive Scheme in respect of the SSI Sector will be the Directorate
of Industries and for the medium and large sector the implementing agency
will be the Assam Industrial Development Corporation Ltd. (AIDC).
Incentive Scheme under the
Industrial Policy, 1991
The new Industrial Policy of
Assam, 1991 has incorporated various incentive schemes for the
establishment of different types of new industries in the State. The
following are some of these incentive schemes included in this policy :
Subsidy on Infrastructural
Facilities :
(A) Developed land will be
alloted on long term basis for intial 30 years, subject to payment of rent
as fixed by the Govt. from time to time renewable for subsequent period as
deemed fit by the Govt. The lease land will be permitted to be utilised by
the unit for mortgage/hypothetication for obtaining loans from the banks
and financial institutions.
(B) In appropriate cases,
developed land will be alloted on hire purchase basis also. The cost of
land including cost of development and cost of creating the infrastructural
facilities like, Power Water and approach road will be recovered in equal
annual installments over 15 years from the date of handling over of the
land, with a moratorium of five years. Such land will be permitted to be
utilised by the unit for mortgage/hypothetication for obtaining loans from
banks & financial institutions.
In case developed land as stated
in (A) above is not available for allotment the entrepreneurs will be
alloted undeveloped land. In such case, actual land development cost
will be provided as an interest free loan to the eligible units.
The above loan and cost of land
will be recovered in equal annual instalments from the date of disbursal
of loan over a period of 15 years with a moratorium five years.
Allotment of Factory Sheds to
SSI Units :
For new small scale industrial
units, built up factory sheds would be allotted to the entrepreneurs on
annual rental basis and the State Govt. will subsidise 50% of the
economic rent for a period of five years from the date of allotment of the
shed. While alloting industrial areas/industrial shed, preference would be
given to entrepreneurs of Assam.
Manpower Development of Local
Entrepreneurs :
Subsidy on manpower development
will be provided in respect of local persons trained and employed in the
industrial units at the following rates, to compensate for the amount
spend on training :-
For Management Personnel Rs. 7500
per person
For Supervisory Categories Rs.
5000 per person
For Skilled Category Rs. 3000 per
person
For Unskilled Categories Rs. 1500
per person
This is subject to the following
ceilings :-
Unit with investment
Total
ceiling
Upto Rs. 2 crores
Rs. 75,000
Rs. 2 crores to 5 crores
Rs,
1,00,000
Rs. 5 crores to 10 crores
Rs.
2,00,000
Above Rs. 10 crores
Rs. 5,00,000
Eligibility Certificate for the
above subsidy will be issued on the basis of initial effective steps taken
by the unit but disbursal will be after final effective steps.
Equity Participation in the
Assisted Sector :
Assam Industrial Development
Corporation Ltd. (AIDC)/ Assam Small Industries Development Corporation
Ltd. (ASIDC) would participate in the equity contribution upto 15 percent
of the issued capital of the company subject to a ceilling of Rs. 15 lakhs
in any viable project where the project cost does not exceed Rs. 5 crores.
Preference would be given to the company floated by entrepreneurs of
Assam. AIDC would participate in the equity share in respect of medium and
large scale and ASIDC in respect of SSI sector.
Interest Subsidy :
Entrepreneurs will be provided
interest subsidy on working capital above 8 percent and subject to maximum
of 5% for SSI and Sick Industrial Unit for such loans taken from banks and
financial institutions. This benefit will be available for the first three
years from the date of commercial production/revival of the unit
respectively.
Sales Tax Exemption :
Sales Tax will be exempted on
purchase of raw materials and sales of finished products for a period of
seven years.
Reduction of Assam Finance Tax
:
To encourage the local
manufactures, Assam Finance Tax will be lowered from 12% to 4% bringing it
at per with 4% CST so that such manufacturers can compete with products
coming from outside the State. Such reductions will be limited to certain
selected items which are being manufactured locally within th State and
the same will be identified by a committee to be constituted for the
purpose.
The committee will review the
list of items to be brought under the provision of these incentives from
time to time, atleast once in a year. Further, the above incentives will
be made available to those units which are either non-eligible for
incentives under Sales Tax Exemption above or have already availed the incentives under
Sales Tax Exemption above.
Power Subsidy
:
Power subsidy will be granted as
follows :-
The above subsidy will be
avialable for a period of 5 (five) years from the date of commercial
production.
Rehabilitation of Viable Sick
Industrial Units :
All incentives under 1991
Incentive Scheme declared for the new industrial units will also be
available for revival of the viable sick industrial units.
Contribution to Feasibility Study
Cost :
In the case of medium and large
scale industries, AIDC will provide 90% contribution towards the cost of
preparation of Feasibility Report prepared by Agencies approved by the
State Government/ respective Udyog Sahayak subject to a ceiling of Rs.
2,00,000/- in each case. The contribution shall be treated as an interest
free loan for a period of five years from the date of commercial
production or from the date of disbursal of the loan, whichever is later.
If the project is not implemented within the prescribed period.
Feasibility Report shall become the property of AIDC and the Entrepreneur
for whom it was prepared shall have no right to the Report or any part
thereon.
For small scale units the cost of
Feasibility Report prepared by an Agency approved by the Directorate/Udyog
Sahayak will be subsidised to the extent of 100% in case of projects whose
total project cost is within Rs. 10 lakhs and 90% in case of projects
above Rs. 10 lakhs. Ceiling of Subsidy will be Rs. 20,000/- in each case.
The project Report will become the property of the Government if the
project is not implemented within the prescribed time.
Subsidy on Generating Set
:
The Subsidy on the Generating Set
including non-conventional energy generating sets will be given @ 50% of
the cost of the Generator, subject to a ceiling of Rs. 10 lakhs (Rs.
10,00,000/-) per industrial unit.
Development Subsidy :
Development Subsidy up to an
extent of 10% of the fixed capital investment subject to a ceiling of Rs.
3 lakhs per unit, or the actual expenditures on the item listed below,
whichever is the least, will be paid to the eligible unit to cover the
following expenses :
(I) Stamp Duty paid for
purchasing or taking lease of land for the unit.
(ii) Stamp Duty paid for
registration of documents for availing of loans.
(iii) Cost payable to Assam State
Electricity Board for drawal of HT/LT line upto the premises of the unit
and installation of Transformer for power supply to the unit.
(iv) Charges payable to local
body, Municipal Board, Panchayats etc. or any statutory body for any
permission or registration .
(v) Fees payable for conversion
of land from annual patta to periodic patta.
(vi) 50% of the fees (excluding
recurring royalty) paid for procurement of Know-how from National Research
& Development Agency, recognised by the Udyog Sahayak.
(vii) Cost of pollution control
and Monitoring equipments and quality control measures etc.
The Development Subsidy shall be
released only after actual expenditure is made by the unit. The above is
applicable for all sectors of industries where fixed investment does not
exceed Rs. 5 crores.
Drawal of Power Line :
In case of projects located in
areas which require drawal of power line of 66 KV and above, such line,
including associated transformers, will be drawn at the cost of the
Government subject to the condition that the location of the unit as such
area is approved by the Government.
State Capital Investment
Subsidy :
A special State Capital
Investment Subsidy @ 30% of the cost of land and building and plant &
machinery subject to a ceiling of Rs. 10 lakhs will be made available till
the Central Capital Investment Subsidy Scheme is reintroduced or till such
time Govt. may decide to continue State Capital Investment Subsidy Scheme
which ever is earlier.
Pioneer Unit :
A new unit with fixed capital
Investment exceeding Rs. 3 crores set up in a District where there are no
Medium or Large Scale Industries will be given pioneer status. Such unit
will be eligible for additional State Capital Investment Subsidy of 5% of
fixed capital investment subject to a ceiling of Rs. 10 lakhs.
Implementing Agencies for the
Implementation of New Industrial Policy of Assam, 1991.
In order to implement the various
clauses as well as incentive schemes under the new industrial policy,
1991, the Government of Assam has introduced the following implementing
agencies.
1. Udyog Sahayak :
In order to provide single window
clearance facilities which will ensure proper delivery of all services, a
separate wing known as "UDYOG SAHAYAK" is already functioning
and this will continue.
The primary objective is to
provide single window facility to the entrepreneurs and to ensure
expenditious identification of entrepreneurs and projects, registration,
processing and fowarding of financial proposals to concerned agencies,
issue of eligibility certificates, co-ordination, sanction,delivery of
incentives and follow-up steps for rapid implementation of projects.
2. In order to ensure effective
and proper implementation of the 1986 Incentives Scheme, committees have
been constituted at the Divisional level as well as the State Level. Such
Committees will continue under the 1991 Scheme.
3. The implementing agency for
the small and tiny sector would be Directorate of Industries through the
District Industries Centres and for the medium and major sector it would
be the Assam Industrial Development Corporation Ltd. (AIDC).
4. A separate wing in the
Directorate of Industries has been opened known as "UDYOG SAHAYAK".
4.1. The "Udyog Sahayak"
in the Head Quarter will continue to be under an Additional/Joint Director
of Industries, with one Deputy Director and two other officers at the ADI
level with necessary supporting staff.
4.2. The "Udyog Sahayak"
shall continue to have a similar cell in each District Industries Centre
and a Functional Manager will be in charge of such a cell.
5. For large and medium sector
industries, AIDC is having a separate Division known as "Udyog
Sahayak" for implementation of the 1991 Incentive Schemes.
6. All administrative Departments
shall refer all issues related to the implementation of 1991 Incentives
scheme to the Udyog Sahayak and keep the Udyog Sahayak appraised of all
actions taken in this regard.
Accordingly, all administrative
departments shall issue Instructions to all Heads of
Departments/Officers/Corporations/Boards under their administrative
control to co-ordinate effectively with the Udyog Sahayak in the
implementation of the 1991 Incentive Scheme.
7. Functions of "Udyog
Sahayak" :
"Udyog Sahayak" will
perform the following functions :
(a) Proper and adequate publicity
of the Incentives Scheme 1991 as well as render all assistance to the
entrepreneurs to avail of the same.
(b) Identific
