A New Industrial Scheme

Now that the North East Industrial and Investment Promotion Policy (NEIIPP) of 2007 is deemed to have outlived its utility, the Central government has announced the North East Industrial Development Scheme (NEIDS). This was announced on Wednesday, March 21, 2018. Welcoming the new scheme, Assam’s Industry Minister Chandra Mohan Patowary said on Thursday that the new scheme would help in checking the malpractices that were there during the NEIIPP days. Patowary admitted that there had been a lot of misuse of the incentives provided under the NEIIPP mostly in respect of transport subsidy. “Under the NEIIPP, transport subsidies were also given for road transport. But the new scheme has provisions for subsidies only in case of movement of finished goods through railways (20 per cent), IWAI (20 per cent) or air (33 per cent). As the transportation will be done through government agencies, there will be little scope for manipulation. Earlier, there was no accountability in case of private transporters,” Patowary said.

It is quite possible that the Industry Minister labours under a few delusions shared by a lot of people in the Assam government. The first is that merely having a new industrial scheme foisted on the Northeast by the Centre will bring about a major change in the very attitude to industrial activity in the State. This is unlikely to happen, not merely because there was some misuse of the subsidies provided earlier under the NEIIPP. True, there was some misuse of transport subsidies given as incentives. The obvious mistakes were to give such subsidies on raw materials and to rely too much on private transporters. It made it very easy for so-called industrialists to pocket the benefits of such subsidies and to sell the raw materials (imported at subsidized transport costs) to others instead of actually using the raw materials for manufacturing. This defeated the very purpose of granting such transport subsidies. Secondly, the minister labours under the myth that by restricting the transportation to government agencies alone, much of the corrupt practices that were possible due to transportation taking place through private agencies would come to an end. This is perhaps an illusory viewpoint about everything remaining clean and straight if transportation could be restricted solely to government agencies. The minister seems to have missed out the important facts that (a) most of our corrupt practices have their roots in government agencies; and (b) even if one could completely control corrupt practices by restricting transportation to government agencies like the railways and so on, one would also have to tackle the major issues of inertia and total disinclition for work among government officials that have long been the major factors sabotaging industrial development in the State. After all, transport subsidies alone cannot be expected to promote industrial activity.

We can have any number of new schemes for industrial development, but they cannot be expected to deliver the goods as long as our work culture remains what it is today: of finding ways to avoid positive and productive work and just to talk about work. Unless we can bring about reforms to change the very attitude to work and to impress on our youth the importance of developing a liking for honest work that endures over the years, much of our efforts at “developing a work culture” will be in vain. In fact, the very idea of making the Northeast a manufacturing hub for ASEAN and BBN countries is slightly amusing because if this happens, the Northeast will be the only non-performing area among several far eastern countries that are already humming with industrial activity. How can we have a region without any significant industrial activity as a manufacturing hub for countries that already have more industrial activities than we do? A far better option may be to go about the business of promoting industrial activity in the region quietly until we can honestly qualify to become the manufacturing hub for ASEAN and BBN countries.