Skip to main content

Gujarat govt's largesse to mega investors: Just 2% of Rs 54,000 cr industrial subsidies went to small sector

By Our Representative
A research paper, “Political Economy of Subsidies and Incentives to Industries in Gujarat: Some Issues”, by scholars Indira Hirway, Neha Shah and Rajeev Sharma, has calculated that the total subsidies given to industries and infrastructure projects during 1990–2011 was a whopping Rs 56,538 crore, of which the maximum share is of sales tax subsidies (Rs 54,303 crore), followed by Rs 1,677 crore of capital subsidies and Rs 370 crore of interest subsidy.” Of this, the paper points out, “Rs 1,150 crore or a mere 2.03 per cent subsidies have gone to the small scale industries/ micro, small and medium enterprises (SSI/MSME)."
"The total amount of subsidies disbursed during the past decade (2001-02 to 2010–11) is Rs 38,226 crore, of which the major share is of sales tax subsidy/ incentives (Rs 37,467 crore). The other major subsidies are Rs 371 crore of interest subsidies and Rs 224 crore of capital subsidies”, the paper, which forms part of a book containing dozen-odd well-researched articles on Gujarat growth story, points out.
Providing a comparison, the paper says, “The amounts of the subsidies is more than ten times of the total subsidies given by the state to agriculture and allied activities and to food and civil supply put together. In other words, the state spent ten times more to attract investments in industry and infrastructure than to help the poor in agriculture and allied activities and food subsidies — at a time when malnutrition, particularly of women and children, is a serious concern in the state.”
All this has been made possible, says the paper, because of gradual undermining of the social agenda while providing subsidies. The paper says, “In the earlier periods, new industrial units were entitled to incentives/ subsidies when they were small or/and located in backward areas. Gradually the larger units have also been included. Before 1990, ‘pioneering’ units with capital investment of Rs 5 crore and more in backward talukas were entitled to special subsidies and incentives. The size of units jumped up multifold thereafter.”
The paper adds, “Instead of only the SSI sector, the focus is now on prestigious, premier, and mega units with Rs 100 crore to Rs 1,000-2000 crore or more capital investments and project investments.” In fact, after 2009, “no limit has been laid out as the subsidies and incentives for mega units are to be determined on a case-to-case basis”, the paper says.
Giving the example of subsidies to the Tata Nano project, which was the first mega project under the new scheme. “The details of the subsidies/incentives given to this project are estimated to be Rs 38,000 crore. The other beneficiaries of mega projects, according to official announcements, are Ford Motors, Maruti Suzuki, and a textile company. The terms and conditions of the incentives will be the same for the incoming companies Ford and Peugeot”, the paper says.
The paper further points to how the conditionality of employment has been watered down substantially. “In the early years of the 1990s, it was mandatory for the beneficiary units to employ 100 permanent workers each, and to employ local workers who would constitute 80 per cent or more of the total workers employed in the unit, and who would constitute 50 per cent or more of the managerial and supervisory staff”, it says.
“The condition of employing 100 permanent workers turned into 100 regular workers and then just 100 workers”, the paper says, adding, “The condition of 1,000 workers for large projects was irrespective of the level of investment. And finally, the condition of local workers has been removed and in the case of mega projects no such condition is applicable.” Similarly, the location policy for new units has been gradually relaxed over the years.
Saying that all this is nothing but “the growth of crony capitalization”, the paper underlines, it “denied a level playing field to the large number of small enterprises, and also changed the political power substantially in favour of the corporate sector. The changes in the state policies towards subsidies and incentives to private investments in industry and infrastructure units, particularly in the past decade, have important implications for the rate and pattern of economic growth in Gujarat.”
It adds, “Instead of promoting small units, the focus is now on promoting increasingly larger units, mega units being the latest; instead of promoting subsidies/incentives to labour-intensive units, the state now invites state-of-the-art highly capital-intensive technology; and instead of worrying about balanced growth, the emphasis is now an becoming ‘the number one destination’ of corporate investments in the world.”

Comments

TRENDING

Untold story of Jammu: Business 'down', students fear lynching, teachers can't speak

By Rajiv Shah
A just-released report, seeking to debunk the view that people in Jammu, the second biggest city of Jammu and Kashmir (J&K) after Srinagar, people had gone “out celebrating” abrogation of Article 370 which took away the state’s special status, has reported what it calls “abominably high levels of fear” across all sections in the town.

Ceramic worker dies: 20,000 workers in Thangadh, Gujarat, 'risk' deadly silicosis

By Our Representative
Even as the country was busy preparing for the Janmashtami festival on Saturday, Hareshbhai, a 46-year-old ceramic worker from suffering from the fatal lung disease silicosis, passed away. He worked in a ceramic unit in Thangadh in Surendranagar district of Gujarat from 2000 to 2016.
Hareshbhai was diagnosed with the disease by the GCS Medical College, Naroda Road, Ahmedabad in 2014. He was found to be suffering from progressive massive fibrosis. He is left behind by his wife Rekha sister and two sons Deepak (18) and Umesh (12),
The death of Hareshbhai, says Jagdish Patel of the health rights group Peoples Training and Research Centre (PTRC), suggests that silicosis, an occupational disease, can be prevented but not cured, and the Factory Act has sufficient provisions to prevent this.
According to Patel, the pottery industry in the industrial town of Thangadh has evolved for a long time and locals as well as migrant workers are employed here. There are abou…

Gujarat's incomplete canals: Narmada dam filled up, yet benefits 'won't reach' farmers

By Our Representative
Even as the Gujarat government is making all out efforts to fill up the Sardar Sarovar dam on Narmada river up to the full reservoir level (FRL), a senior farmer rights leader has said the huge reservoir, as of today, remains a “mirage for the farmers of Gujarat”.
In a statement, Sagar Rabari of the Khedut Ekta Manch (KEM), has said that though the dam’s reservoir is being filled up, the canal network remains complete. Quoting latest government figures, he says, meanwhile, the command area of the dam has been reduced from 18,45,000 hectares (ha) to 17,92,000 ha.
“According to the website of the Sardar Sarovar Narmada Nigam Ltd, which was last updated on Friday, while the main canal, of 458 km long, has been completed, 144 km of ranch canals out of the proposed length of 2731 km remain incomplete.
Then, as against the targeted 4,569 km distributaries, 4,347 km have been constructed, suggesting work for 222 km is still pending. And of the 15,670 km of minor canal…

Cess for Gujarat construction workers: Spending less than 10%; no 'direct help' to beneficiaries

By Our Representative
While the Gujarat government’s Building and Other Construction Workers Welfare Board, set up in 2004, as of March 31, 2019, has collected a total cess of Rs 2,097.62 crore from the the builders, it has spent less than 10% -- Rs 197.17 crore. And, as on May 31, 2019, the total cess collection has reached Rs 2,583.16 crore, said a statement issued by Bandhkam Majur Sagathan general secretary Vipul Pandya.
Pointing out that just about 6.5 lakh out of 20 lakh workers have been registered under the board, Pandya said, vis-à-vis other states, Gujarat ranks No 13th in the amount spent on the welfare of the construction workers, while 11th in the amount collected.
And while the builders are obliged to pay just about 1% of the total cost of their project, the calculation of the cess is flawed: It is Rs 3,000 per square yard; accordingly, Rs 30 per square yard is collected. “Had the cess been collected on the real construction cost, it would have been at least Rs 7,000 cr…

Why nobody objected to Gautam Gambhir, Sunny Deol in t-shirt, jean?: Activists

By Our Representative
Mimi Chakraborty and Nusrat Jahan’s excitement on their first day as MPs was overshadowed by a barrage of sexism over their ‘non- sanskari’ outfits, a group of civil society activists have said in a statement. According to Aarushi Nigam, Divya Kaushik, Riya Sharma, Ruman Ganguly, and Anulekha Agarwal, both Bengali actors and first-time MPs "were certainly excited to take them on when they posted pictures from their new workplace on social media."
Hit by misogynistic comments, the activists say, "Their choice of workwear – jeans and a white button-down shirt for Mimi, a wine-coloured peplum suit for Nusrat – was the first and last word on their political competence for many."
“You’re not on vacation”, “they have mistaken Parliament for Kolkata’s Nicco Park or City Centre”, “this is not a photo studio, this is a place where you should fight for people’s rights and legislate”, “keep some respect towards your Bengali society” were some of the &quo…

Kashmiris in a civil disobedience mode, are going against 'diktat' to open shops

Counterview Desk
A team of concerned citizens, including Ludhiana-based psychiatrist and writer Anirudh Kala, Mumbai-based activist and public health professional Brinelle Dsouza, Delhi-based journalist and writer Revati Laul, and social activist Shabnam Hashmi, travelled to Kashmir and Jammu to understand the impact of the abrogation of Article 370 and the subsequent security clampdown and communication blockade on the lives of the people of Jammu and Kashmir (J&K).

Gujarat CM aide 'doubts' authenticity of Gandhi article published in 'Harijan'

By Rajiv Shah
A top aide of Gujarat chief minister Vijay Rupani has doubted the authenticity of the article written by Mahatma on Gandhi January 27, 1948, three days before his death. Hitesh Pandya, who was assistant public relations officer (PRO) under Narendra Modi’s chief ministership in Gujarat, and is currently serving as PRO of Rupani, has said, there is “reason to doubt”, since the article appeared on February 1, 1948, two days after Gandhi’s assassination.

Denied permission in Ahmedabad to protest on Kashmir, NGO seeks online support

By Our Representative
Gujarat chapter of the Delhi-based Now for Harmony and Democracy (ANHAD), which calls itself is a socio-cultural organization established “as a response to 2002 Gujarat riots”, has sought support from state academics, activists and professionals for a petition against the “unilateral” decision of the Government of India to “revoke” Jammu and Kashmir (J&K) legislature’s “right to self-governance”.

Success of 'political' Hinduism: Kashmiris being depicted as antagonists of rest of India

By Anand K Sahay*
There are times in history when facts call attention to themselves; they assert their independence in all its amplitude and are in no need of the crutch of interpretation. Such a moment is visible in Kashmir now. Merely by being on the table, the facts there taunt the regime’s proclamations.

RSS chief's Hindutva motto seems to be: Down with lynching, long live vadh

By Shamsul Islam*
India has turned into the lynching capital of the world. Our country has been tagged with this infamous identity with Narendra Modi becoming Prime Minister of India in 2014. The Modi rule herald the beginning of nation-wide spree of lynching of Dalits and minorities. Unfortunately, there is no government data collection on hate-crimes but few media outlets have been collecting the lynch data.