NEW DELHI, January 3: In what can be described as a major setback towards attracting investments, the Union Finance Ministry has withdrawn the Central excise duty exemption granted to cigarette industry in the Northeast. The notification that was issued by the Union Finance Ministry on December 31, and announced here today, is likely to deliver a severe blow to all attempts to bring investors to the region, as withdrawal of the exemption is seen as hurting the sanctity of the notification itself, a top official with Central government commenting on the move, said. If the government can succumb to pressures and withdraw one item from the list of exemptions, then other items can be also withdrawn, this is the message that will go to potential investors now, he observed. The cigarette companies were the single biggest investors to queue up for investing in the region, with investment proposal worth over Rs 600 crore pending with the Union Industry Ministry. The reason being that cigarette attracts the highest excise duty of 200 per cent. With the notification announcing the withdrawal, the cigarette giants are also likely to pull out shortly, sources said. The official notification said that it was issued so as to remove all goods falling under Chapter 24 like cigarettes, bidis, etc, and also pan masala from the purview of notification 32/99 and 33/99. As a result, the excise exemption granted to cigarette, bidi and tobacco-related industry in Northeast stands withdrawn, it added. Though no reason was given for withdrawing the concession to cigarettes, sources here disclosed that, it was done by the Finance Ministry in consultation with the Ministry of Home Affairs, as it was feared that the surplus a funds from the cigarette and tobacco industry would go to finance the underground outfits. The establishment of cigarette industry would also harm the social fabric in the region and lead to further deterioration in the law and order situation it was felt, sources added. The real reason, however lie elsewhere, and it is believed that the active lobbying by the tobacco manufacturers under the banner of Tobacco Institute of India may have prevailed over the Finance Ministry. The association, in fact, swung into action as soon as the notification, touted by the Central government as major initiative to remove backwardness and isolation of the region, was issued in July. The association in its first act submitted memorandum to the Central government, particularly the Finance Ministry, opposing the move. The Tobacco Institute of India argued that it would lead to a massive revenue loss to the tune of over Rs 600 crore to the Union government, besides promoting anti-social activities in the region. And to buttress its claim it pointed out the case of Sikkim to the Centre, where similar exemption led to massive manipulation of funds by many companies. Ironically, it was precisely the lobbying by the association that prompted the Northeast MPs Forum to jointly petition the Prime Minister and Union Finance Minister, pleading to ignore their demand. The MPs argued that the acceding to their demand would send a wrong signal to the investors in the region and harm the initiative taken by the states to attract investments. Incidentally, Assam and Tripura would stand to lose the most as both the states had investment proposals worth Rs 412.35 crore pending. In all, Assam will lose investments worth Rs 313 crore. Our Staff Repoter adds: The Assam government has expressed strong resentment over the recent action of the Central government of withdrawing excise duty exemption on cigarette and pan masala. The State Industries Minister, Gunin Hazarika, said the Chief Minister, Prafulla Kumar Mahanta, will take up the matter with the Prime Minister tomorrow. The Chief Minister has already taken up the matter with the Chief Ministers of other north-eastern states. Hazarika said that the Prime Minister, during his visit to the state to inaugurate the Numaligarh Refinery on July 9 last, had announced the Central government's decision to give excise duty exemption on certain items to give a boost to industrialisation of Assam and other parts of the Northeastern region. But on December 31, the Centre issued a notification withdrawing excise duty exemption on cigarette and pan masala. He said that the Centre's decision would create serious problem as some cigarette companies have already come forward to set up their units in Assam and negotiations are on with the government in this regard. Hazarika expressed strong resentment at the Central government's decision and alleged that the decision was taken under pressure from multinational cigarette companies. He also expressed fear that the Centre might withdraw excise duty exemption on other items in phased manner. The Industries Minister said that the Centre has gone back on its announcement just six months after such exemptions were announced by none other than the Prime Minister himself and such actions proved that the Centre is not at all serious in the industrial development of Assam and other states of the region. (Kalyan Barooah; The Assam Tribune, Guwahati; January 4, 2000)

NEW DELHI, January 3: Reaffirming that the backward north-eastern region continues to be high on its list of priority, the Union government has announced that over Rs 12,396 crore of Central assistance will flow into the region during the current financial year, making it the highest amount spent so far in the region. The Union government's assertion comes at a time, when region's MPs have questioned the sincerity of the Union government in implementing the Prime Minister's special economic package and Shukla Commission's recommendations. Alternately, the Union government has also come under heavy fire from the Opposition parties for neglecting the monitoring of the utilisation of the Central funds, amidst reports of massive diversion of Central assistances by the states. And, in what appears to be an attempt to counter the claims, the Union government has disclosed that out of the total funds that is being made available Rs 4,884 crore will be in the form of Central assistance, Rs 4,680 crore will be the State's share in taxes and grants, Rs 425 crore will come from Northeastern Council (NEC), Rs 2,407 crore will be in the form of Central sector schemes. The Additional Secretary in Ministry of Home Affairs (MHA) and in-charge for Northeast, PD Shenoy pointed out that the region's share in Central assistance is 19.30 per cent where as its population constitutes only 3.78 per cent of the country's population. Shenoy also asserted that while the total Plan expenditure during the Eight Five Year Plan was Rs 12,958.94 crore, the Ninth Plan outlay for the north-eastern states including Sikkim stands at Rs 25,283.46 crore. In the current year itself the total Plan outlay for the region is Rs 4,755 crore, he added. The Union government's figures made available here reveals that Assam has the largest share of Rs 1,616 crore in the Central assistance, its share in Central taxes comes to around Rs 1,480 crore, while grants from Finance Commission is around Rs 511 crore. In all out of Rs 12,958.94 crore, Assam corners Rs 3,607 crore. The share of other states in the region is as follows Arunachal Pradesh (Rs 917 crore), Manipur (Rs 943 crore), Meghalaya (Rs 796 crore), Mizoram (Rs 713 crore), Nagaland (Rs 936 crore), Tripura (Rs 1211 crore) and Sikkim (Rs 441 crore). Further, according to the figures, Assam's share in the Central assistance is 6.58 per cent, while its share of population is 2.69 per cent. While hoping that the figures would take care of the charge that the Centre has placed the Northeast in the low priority area, the Union government now proposes to tackle the allegation of diversion of Central plan funds by the states. And according to sources, the issue is high on the agenda of the two-day high level meeting of Chief Ministers and Governors to be chaired by the Prime Minister at Shillong on January 21 and 22. Sources at the Planning Commission confirmed that at the two-day meeting the Union government would try and work out a mechanism to monitor the implementation of the centrally sponsored schemes and projects. And hint to the effect, in fact, was given by the Minister of State for Programme, Implementation, Arun Shourie, when replying to a debate on the subject in the Parliament he had assured that he would try and visit the region and meet the Chief Ministers there to find a way out. Opposition member mainly belonging to the Congress Party had charged that the Central funds were being misused and diverted even as the region continue to remain backward, holding the Centre responsible for the plight. A few members even went to the extent of suggesting that Union government should think of transferring funds directly to the autonomous councils and local bodies as the state government normally diverts the funds earmarked for them. Shourie incidentally is also scheduled to attend the meeting at Shillong and the Centre is expected to take it up with the state governments. (Staff Correspondent; The Assam Tribune, Guwahati; January 4, 2000)

SHILLONG, January 4: Meghalaya has become the fifth State in the Northeast region to accept the uniform floor rates of sales tax introduced in the country from January 1 this year amidst fears that the backward State may register a big fall in tax revenues in the current year. The declaration was made at a press conference at the secretariat conference room here today by Meghalaya Taxation Minister, Sanbor Swell Lyngdoh. He said that the introduction of the uniform floor rates will help stop the self-defeating tax wars between the states specially in the Northeast. A senior state government official, however, expressed apprehension that the non-acceptance of the floor rates by Arunachal Pradesh and Mizoram may spell problems for the other states in the region as it has the potential to take away trade and business from the other states. The 'rogue' states, he said referring to the non-complying states, need to be disciplined by the Centre. Going back to the genesis of the new tax regime, it may be recalled the government of India in 1991 set up a Tax Reform Committee to improve the system of both direct and indirect taxes. This was followed up by a Committee of the State Finance Ministers' set up in May, 1994, which recommended comprehensive tax reforms. The Committee, in its report in August 1995 stressed the urgent need to expand the tax base, rationalise and simplify the tax structures by reducing the number of applicable tax rates and enhancing transparency. The Committee also recommended four general floor rate category along with two special floor rate categories with a view to prevent self-defeating tax wars. The states were, however, free to tax the listed goods at higher rates and to tax exempted items. In 1998, the Conference of Chief Ministers and Finance Ministers constituted a committee of six Chief Ministers' to formulate the implementation schedule for uniform floor rates of sales tax. On November 16 last year, the Committee's recommendations were endorsed in the conference of Chief Ministers and Finance Ministers in New Delhi and the deadline of January 1, 2000 was fixed for implementation of the uniform floor rates by all states and Union Territories, as a first major step towards domestic tax reforms and reducing the complexity of the tax system. If the total tax revenue of any State fell below the pre 1-1-2000 level due to the introduction of the uniform floor rates, such loss would be fully compensated from the Central pool, the Union Finance Minister had assured the Conference in New Delhi, the Meghalaya Minister disclosed. Asked about the impact of the uniform floor rates on Meghalaya, the State Finance Commissioner, PJ Bazeley, sounded an optimistic note saying the revenue collection will increase by Rs 3.5 crore if the business turnover remained the same in the new year. Against the overall tax collection of Rs 49 crore in 1998-99, the target for the current year has been fixed at Rs 60 crore, he said. A senior finance official later admitted that Assam stands to gain from the uniform floor rates. Pre-uniform floor rates saw the diversion of crores worth of business to neighbouring states, of Meghalaya, Nagaland and Arunachal Pradesh as the latter used to wage a virtual 'tax war' in order to garner more revenue. For instance, with sales tax on motor vehicles going up to 12 per cent from 3 per cent in Meghalaya, not many car buyers will be coming to the State in future to purchase vehicles in Meghalaya. But with a view to maintain the advantage in liquor prices over Assam, Meghalaya has decided to absorb the 20 per cent sales tax by pulling down the excise rates so that liquor prices remain at the same level. It is worth mentioning that a major chunk of the State's revenues are still collected from liquor sales in Khanapara-Jorabat area. (Bedabrata Lahkar; The Assam Tribune, Guwahati; January 5, 2000)

NEW DELHI, January 5: In yet another turn to the impasse surrounding the mega gas cracker project, the Petroleum Ministry has served a deadline of January 14, to the Reliance Industry Limited (RIL) and the Oil India Limited (OIL) to sort out problem holding up the project. The sudden hurry on part of the petro-chemical ministry to resolve the tangle is learnt to be due to pressures from the Prime Minister's Office (PMO), which wants the issue to be solved before the Prime Minister's scheduled visit to the region later this month. The PM, apparently, is keen to make an announcement when he inaugurates the meeting of the Chief Ministers and Governors of the region at Shillong. Significantly, it is the Assam government which has taken a tough stand on the projects, with state government yesterday, telling the Centre that if the entire dispute is not settled within January 21, then the centre should cancel the deal with the Reliance Industries Limited and start looking for new partners in the private sector or commission the project in venture with the public sector oil companies. The entire gamut of issues connected with the project was discussed at a high-level meeting convened by the petro-chemical secretary, Arvind Pande and attended by representatives of Reliance Assam Petro-chemical Limited (RAPL), MC Bora and MM Saini both directors, fertilizer secretary, AV Gokak the state industry commissioner and secretary. JP Meena and managing director of AIDC, Jishnu Baruah and CMD OIL, BB Sarma. The main hurdle, the government was informed related to signing of the gas supply agreement with both OIL and the RIL taking an adamant stand, with the result that fate of the project now hangs in balance. The OIL is unwilling to give a guarantee for supply for gas for 15 years period as demanded by the RIL. The indifference also persists over payment of compensation by the OIL if it fails to supply the guaranteed amount, or make available the gas at the agreed rate by purchasing it from outside, both the conditions unacceptable to the oil company. Significantly, the Assam government has thrown the ball into the central government's court asking it to take a final decision on the agreement with the RIL at the earliest. "Since we are not in a position to take a decision nor can we look for new partners we have left it in the hands of the central government which is also in the best position to hunt for new partners" the state industry minister, Gunin Hazarika told The Assam Tribune, commenting on the latest development. The Minister, however, in the same breath also added that he was hopeful of the Reliance Industries Limited (RIL) executing the project. But there seems to be problems galore in execution of the gas cracker project, the latest being the objection raised by the Air Force over allotment of land at Tenghakhat for the project which they claimed was too close to the Chabua air base. In the wake of the objection by the Defence Ministry, the Assam government has since cancelled the allotment and has identified three new sites in Dibrugarh district for the project. Hazarika said that survey process to acquire 2,000 bigha of land has already started though the state government expects to face some hurdles in this regard. The problem is that the state does not have 2000 bigha of government land and hence it has to go in acquisition from private land owners. But the state government now is mainly awaiting the outcome of the fresh dead-line set by the Centre. (Staff Correspondent; The Assam Tribune, Guwahati; January 6, 2000)

GUWAHATI, January 5: In the wake of Union Finance Ministry's abrupt decision to withdraw Central excise duty granted to cigarette industry in the Northeast, fate of at least four new tobacco units including three in Assam and one in Tripura hangs in balance. All these units were set up after the Central government announced the excise duty exemption on July 8,1999. One of these units Northeast Tobacco Company Limited which was set up at Export Promotion Industrial Park at Amingaon with franchise arrangements with Golden Tobacco Company Limited, Mumbai, stopped its operation on Monday last. Sources in the company informed that though it had started operation in December last, the abrupt decision of the Union Finance Ministry forced its closure as without the exemption in excise duty it would not be able to sustain competition with products of the tobacco majors in the market. Twenty-three local persons were provided direct employment in the Northeast Tobacco Company Limited. All of them are now staring at a bleak future thanks to the arbitrary decision of the Union Finance Ministry. It is learnt that the management of the company already spent an amount of Rs 2.5 crore in setting up the plant. The fate of another such plant that is being set up at Tezpur industrial area now has become uncertain after the decision of the Union Ministry. Already two sets of machinery have been set up in the plant which was on the verge of production. The third casualty of the Union government's decision in the State is another upcoming tobacco plant at Badarpur in Karimganj district. Similar is the fate of the chewing tobacco unit being set up at Arundhati Nagar Industrial area in Tripura. It may be mentioned that the Finance Ministry has taken this arbitrary decision serving death blow to prospects of cigarette industry in the Northeast even though the Union Minister of Commerce and Industry, Murasoli Maran had given a written assurance to a very prominent MP from the region ruling out any possibility of withdrawal of any incentives provided in the Northeast Industrial Policy. In reply to the MP's letter dated November 4, the Union Minister in a written assurance last month stated that "I would like to allay your fears about changes in the incentives in the policy package. We have no proposal under consideration to modify any of the provisions of the policy/financial package." Meanwhile, the Union Finance Ministry's step has created ripples among the industry circle in the State which fear that more such arbitrary actions are on cards vis-à-vis the package of incentives came along with the Northeast Industrial Policy. Former president of the Federation of Industries Northeastern Region (FINER), S Kumbhat criticised the role played by the Tobacco Institute of India in leading the campaign against exemption of excise duty for cigarette industry in Northeast. He alleged that the Tobacco Institute of India acted at the behest of multi-national tobacco majors while lobbying against the exemption granted for NE. When asked why the tobacco giants were opposed to the excise duty exemption in Northeast, Kumbhat said these companies probably got clear signals that the Central government would not okay their applications for license to set up tobacco units in the NE to reap the benefit of excise duty exemption. Therefore, they mounted lobbying against the concession so that local entrepreneurs from the region cannot set up tobacco units taking advantage of the incentives. (Bijay Sankar Bora; The Assam Tribune, Guwahati; January 6, 2000)

GUWAHATI, January 5: Though the ARTFED earned valuable foreign exchange by exporting handloom products to different countries of the world in the past one year, the domestic market of handloom products has not been very encouraging in the last couple of years. The managing director of the ARTFED, NN Rana Patgiri said that the purchasing power of the consumers has nothing to do with the decline of the domestic market. He said that in the last couple of years, the design, colour etc. of the textiles changed very frequently and in most cases. The weavers of the State failed to cope up with the change in the taste of the buyers. He, however, expressed the hope that the domestic market would pick up soon. The ARTFED MD pointed out that due to the open market economy, the handloom products of the State would have to compete with textiles produced in powerlooms in the years to come and the weavers would have to change their designs according to the taste of the consumers. In the last couple of years, the ARTFED, despite the present economic scenario, has been doing quite well. According to Patgiri, last year, the turnover of the ARTFED was Rs 47.69 crore and the net profit was Rs 21.92 lakh. This year, it is expected that the turnover will be Rs 59.92 crore, with a net profit of Rs 39 lakh. He pointed out that the ARTFED has 286 regular employees and about 300 daily wage earners and their salaries and wages have been paid regularly. Patgiri revealed that at this moment, the ARTFED has six showrooms in different other states, of which the showroom at Calcutta has been doing very good business. The ARTFED is also organising about 40 exhibitions in different parts of the State as well as in other parts of the country annually to promote handloom products. The ARTFED is planning to participate in international textile fairs in Germany, United states and Japan in the coming months to give international exposure to the traditional handloom products of Assam. It may be mentioned here that the ARTFED managed to export handloom products of Assam only after its participation in textile fairs in Germany and Japan in the last couple of years. Patgiri further said that the weavers of Assam cannot maintain international standard of stitching as the technology for the same is not available in Assam. He said that the ARTFED is planning to set up a modern stitching plant with modern cutting machine, button machines etc in Guwahati with a cost of Rs 10.56 lakh and the proposal for the same has been sent to the Union government for sanction. (Staff Reporter; The Assam Tribune, Guwahati; January 6, 2000)

SHILLONG, January 6: India and Myanmar are holding a high-level meeting here beginning tomorrow to sort out the stand-off in border trade at Moreh in Manipur since the last ten days, highly placed official sources disclosed. The talks will also cover trade and commerce between the two neighbours. The 20-member Indian delegation is led by Union Power Minister, PR Kumaramangalam and Union Commerce and Industry Minister, Murasoli Moran. The Myanmarese delegation comprise 16 members from the ruling military junta. The three day-long discussions till January 9 are likely to encompass cross-border terrorism and insurgency. (Special Correspondent; The Assam Tribune, Guwahati; January 7, 2000)

NEW DELHI, January 6: Amidst sharp reactions to the Centre's move to dilute the list of Central excise duty exemptions to the north-eastern states including Assam, several cigarette giants and pan masala manufacturers have announced pull-out of their investments from the region. The cigarette giants like International Tobacco Company (ITC), Godfrey Phillips and Vazir Sultan Limited have in a swift response to the Centre's latest notification has hinted to the possibility of withdrawing their proposals to invest in Assam and Tripura, even as State Chief Minister, Prafulla Kumar Mahanta, yesterday wrote to the Prime Minister Atal Behari Vajpayee protesting the move. While both the Ministries of Finance and Home are maintaining silence over the issue, joining the cigarette companies were several pan masala companies, few of which actually started production in Assam, have notified the government their inability to carry on business. Exemption of Central excise duty on pan masala which comes to around 40 per cent, made it an attractive ventures for small and medium manufacturers to set up factories in the Northeast. A delegation of such Delhi-based pan masala manufacturers called on the State Industry Minister, Gunin Hazarika, here to ascertain the State's next move, even as they informed that under the present circumstances they have no option but to pull back their investment. One of the manufacturer, BL Malu later told The Assam Tribune, that their confidence has been shattered by the notification. Malu's unit at North Guwahati had started production, while he had two other proposals in the pipeline. "In all, we had envisaged Rs 10-15-crore investments in Assam, but now we have no option but to drop our plans," he added. Meanwhile, reports here were that though the cigarette majors like ITC, GPI and VSL are likely to shelve their plans, they may not withdraw their applications for licences pending with the Industries Ministry here. Together the three companies, proposed investments over Rs 600 crore in Assam and Tripura out of which the ITC proposal was around Rs 525 crore for manufacturing 60 billion-stick annually. The GPI's investment proposal was around Rs 214.15 crore, out of which they proposed invest Rs 114.45 crore in Assam and rest in Tripura. Their proposed plant in Assam was for manufacturing 7.5 billion sticks. The latest proposal was from the VST which planned to invest Rs 90 crore in Assam to set up a plant to manufacture 25.60 billion sticks. Meanwhile, State Chief Minister reacting to the Centre's move has written to the Prime Minister saying that the action of the Ministry of Finance is a retrogade step and needs immediate rectification. "It was your personal initiative which has resulted in the exemption given in July, last year, and it would be appropriate that you intervene in the matter once again to ensure that these exemptions continue and the process of industrial growth in Assam and in the Northeast is not blocked due to their absence", he pleaded in his letter, a copy of which was made available to The Assam Tribune. Mahanta further mentioned that under the new industrial policy, the states also put in considerable efforts to invite the investors from outside the State for setting up new industries and also received a favourable response. The withdrawal of these exemption are going to affect the process of investments. (Kalyan Barooah; The Assam Tribune, Guwahati; January 7, 2000)

GUWAHATI, January 6: Uncertainty over leasing out of the Bongaigaon Thermal Power Station (BTPS) to the American company Ogden Energy Inc continues as the state government is yet to take the final decision in this regard and now the company is ready to pull out of the deal if it is not finalised within this month. Talking to newsmen here today, executive consultant of the company, SK Tagore, said that the ball is now in the court of the government as the ASEB and the Ogden Energy Inc have agreed on most of the points and the minutes of the meeting have been sent to the government for taking the final decision. He said, "The government should not keep us hanging. If the government cannot lease out the BTPS, we are ready to pull out of the deal," he added. Tagore revealed that the Ogden Energy Inc has already spent an amount of $ 1.2 million on the project. It may be mentioned here that the company had earlier threatened to take the state government to the court, but now the company has changed its decision as Tagore said, "We would not gain anything by going to the court." He pointed out that even if the courts give a judgement in favour of the company, it would not be able to function properly with an unfriendly government. The executive consultant of the Ogden Energy Inc said that the company is ready to amend the lease, renovate, operate and transfer (LROT) agreement signed with the ASEB. But the company is not ready to term the LROT agreement as the draft agreement, as desired by the state government. Tagore said that the BTPS was a dream project for the Ogden Energy as it was one of the first projects taken up by the company after coming to India. He asserted that the BTPS can be made an economically viable project and hoped that the Ogden Energy Inc would be able to fully renovate the project within three years with a cost of Rs 360 crore. He said that a couple of years back, the Ogden estimated the tariff of the power produced in the BTPS as Rs 1.11 per unit as fined tariff plus the cost of fuel. The total tariff was calculated at about Rs 2.20 per unit. He pointed out that at the initial stage the cost of fuel would be much more but gradually the cost would come down as the company made a plan to use 30 per cent Assam or Meghalaya coal. He also revealed that at this moment the BTPS is producing less than 10 MW of power and asserted that the Ogden would be able to produce at least 100 MW from the day of the takeover. Regarding the controversy on future of the BTPS employees if the plant is taken over by the Ogden, Tagore said that the company has already agreed to maintain the service conditions of the ASEB. In fact the Ogden is even ready to enhance the remuneration to match the best is business. (Staff Reporter; The Assam Tribune, Guwahati; January 7, 2000)

GUWAHATI, January 6: The Union Power Minister, PR Kumaramangalam, today announced that the 21,000 MW Dehang and Subansiri hydel power project in Arunachal Pradesh has been identified for fresh start and the 600 MW Stage-III of Subansiri project will start pushing power in the year 2008. Kumaramangalam, who had an interaction with the Power Ministers of all the NE states including Sikkim here, informed the press that survey works for the 'world's largest hydel power project' has commenced for preparation of DPR. Dehang and Subansiri project will cost about Rs 100,000 crore and is proposed to be completed by the end of year 2012. Both Dehang and Subansiri project will have three stages each. Kumaramangalam said, "The Union government is committed to complete this project as it realises that availability of power holds the key to development of the north-eastern region." Other projects in the Central sector identified for fresh start are: Tuivai (210 MW) in Mizoram, Kameng (600 MW) in Arunachal Pradesh, Tipaimukh (1500 MW) in Manipur for which MoU is to be signed between Manipur government and NEEPCO by March 2000. Regarding projects in Assam, the Union Power Minister informed that the state government's request for release of Rs 54 crore for sub-transmission system from non-lapsable pool of resources will be recommended by the Ministry for release during the current year. He said that the Karbi Langpi project to be undertaken by the ASEB would be financed by the Power Finance Corporation (PFC). He also assured to request the Planning Commission for providing fund for Lakwa Waste Heat Project. The Ministry of Petroleum and Natural Gas will be requested for additional allocation of gas for Amguri project. There will be a sustained programme for inter-regional power transfer capacity enhancement from 100 MW to 900 MW during the current year. BTPS issue : In reaction to US power giant Ogden's threat to pull out of the race for Bongaigaon Thermal Power Station, the Union Power Minister said, "Nobody can threaten us. The Ogden should sort out the matter through negotiation with the state government and the ASEB. The Power Ministry will stand by the state government in this matter." (Staff Reporter; The Assam Tribune, Guwahati; January 7, 2000)

GUWAHATI, January 6: The Federation of Industries & Commerce of Northeastern Region (FINER), in a memorandum to the Prime Minister which was released to the press here, has expressed shock over the notice of the Ministry of Finance withdrawing the excise duty concessions granted by notification Nos 32/99 and 33/99 dated July 8, 1999 by a notification No 45/99-Central Excise dated December 31, 1999 on tobacco products and pan masala. Expressing concern over the withdrawal of excise duty concessions by the Central government within six months of announcing them, the FINER said this will discourage the prospective investors from investing money in the region. The federation also pointed out that as this move of the Centre has proved right the apprehension that the concessions were a temporary measure to appease the people of the region, it will send a negative signal to the investors who are willing to invest in the region. Moreover, these industries would have provided substantial direct or indirect employment opportunities in the region. The FINER further substantiated its point by raising the cause of the betel growers in villages who would have got a source of sustenance had the Centre's move not come about. Countering the reason of public interest given in withdrawing the exemption, the Federation said that a smoker will invariably smoke regardless of whether the cigarettes are produced in the region or outside it. The FINER strongly rejected the claim that the fears of Finance and Home Ministers that surplus funds from the cigarette and tobacco industry will end up filling the coffers of underground outfits, as the reason behind such a move. Moreover, the Centre's move will vitiate the congenial atmosphere for investment in the region created by grant of concession to industry by the Central and State governments, it added. (Staff Reporter; The Assam Tribune, Guwahati; January 7, 2000)

GUWAHATI, January 7: The Central Bureau of Investigation (CBI) yesterday arrested businessman Prabhu Dayal Deorah, for his alleged involvement in Rs 4.27 crore palmolein oil scandal after conducting search operations at his residential premises in Guwahati, Khetri, Tura and William Nagar. According to official sources, the investigating agency is under impression that Deorah is the kingpin of the racket involved in lifting of palmolein oil from the State Trading Corporation Limited, Guwahati, on fake allotment order purportedly issued by government of Assam during the year 1994-95, 1995-96 and 1996-97. Palmolein oil were allotted by the STC, a government of India undertaking, to the state government for distribution through public distribution system. Sources informed that the investigating agency is trying to find out involvement of politicians in the scandal, as without help from politicos in power it would not have been possible to lift the palmolein through fake allotment orders. The CBI had taken up the case suo moto in 1998 suspecting foul play in palmolein oil distribution in the State. It registered a case No. RC 12(A)/98-SHG u/s 120B, 420, 468, 471 IPC and Sec 13(2) R/W 13(1) (d) of PC Act, 1988. During the course of investigation so far the CBI had found that in the period mentioned above against 184 delivery orders an total quantity of 1487.8111 MTs of palmolein oil worth Rs 4.27 crore were lifted in the name of samabai samittee/cooperative societies throughout the State on fake allotment order of the district administration, Food and Civil Supplies, and authorisation letters issued by so-called samabai samittee/cooperative societies. All these allotment orders and authorisation letters produced for lifting the item from State Trading Corporation were found to be fake. The investigating agency found large number of incriminating documents during search operations in the premises of Prabhu Dayal Deorah, who was produced before the court of Special Judge here this afternoon. The Special Judge, rejecting the bail application of the Dayal sent him to CBI custody till Monday. Sources also informed that the state government had earlier maintained that it did not asked for palmolein oil since 1994. But in contrast to the claim, the CBI has found that the state government had requested for additional allotment of the item in view of Christmas in 1995 form the Union Ministry of Food, Civil Supplies and Edible oils. (Bijay Sankar Bora; The Assam Tribune, Guwahati; January 8, 2000)

GUWAHATI, January 7: The Gauhati High Court today by an order stayed the recent notification of the Union Finance Ministry withdrawing exemption of central excise duty for cigarette industry in the Northeastern states. Acting on a writ petition filed by a private company, Newzone India Private Limited, Justice NC Jain stayed the notification of the Finance Ministry dated December 31 last and directed posting of the case for further orders on February 7, 2000. By virtue of the Court's interim order, the eligible industries would continue to be exempted from levy of Central Excise duty until further orders from the Court. The Court also issued notices to the Central and the State governments on the petition challenging the Union Finance Ministry's notification. Arguing for the petitioner, Advocate Ranjan Gogoi submitted before the Court that on the strength of the government's promise of Central Excise duty exemption, the petitioner Newzone India Private Ltd has set up a cigarette manufacturing unit at Dolabari industrial area in Tezpur by investing a huge sum of money and other material resources. Now in view of the attempt of the Central government to take away the duty exemption, the firm is hit by the doctrine of "promissory estoppel". The advocate pointed out that but for the Central government's promise, the company would not have set up the industry in the State and the impugned notification of the Central government is liable to be set aside by the Court. The petition also referred to certain newspaper reports which indicated that the government of Assam is against the withdrawal of the benefit of exemption as it would be contrary to public interest and pointed out before the Court that the Central government's action would send wrong signals to industrialists who are willing to set up industries in the Northeastern region. Justice NC Jain after hearing the case directed issuance of notice to the Central and State government. The notice is returnable by February 7, 2000. The Court has in the meantime stayed the operation of the withdrawal notification by the Central government. It may be mentioned here that abrupt withdrawal of exemption of Central Excise duty for cigarette industry in Northeastern region has shocked the business community here besides evoking sharp reaction from the State government which dashed off the Industry Minister to New Delhi to take up the matter with the Central government. The Federation of Industries of Northeastern Region (FINER) has sent a memorandum to the Prime Minister requesting his intervention to prevent the Finance Ministry from taking such a drastic step to withdraw Central Excise duty exemption which will serve a death blow to the prospects of cigarette industry in this region. (Law Reporter; The Assam Tribune, Guwahati; January 8, 2000)

SHILLONG, January 7: High-level exchange between India and Myanmar which began in the Meghalaya State capital here today amidst tight security and secrecy touched upon military and economic issues concerning the two neighbours. The conference is so much shrouded in secrecy that Gen Maung Aye, vice chairman of the State Peace and Development Council better known as the ruling Military Junta and Commander-in-Chief of the Myanmar Army, slipped into the city this morning un-noticed at the head of a 16-member delegation. Earlier today, the Chief of the Army Staff and Chairman of the Joint Chiefs of Staff Committee, General VP Malik, returned from an unannounced visit to Myanmar at the invitation of Gen Maung. Gen Malik who visited Mandalay headed a delegation of senior military officers including representatives from Army, Navy and Air Force in his two-day tour. Official sources today described the visit as in keeping with the tradition of high level exchanges between the armed forces of the two countries. The two sides, during the exchange of visits, discussed measures for enhanced cooperation between the armed forces in areas including training and border management between their forces deployed along the common border. Besides the military exchanges, the Myanmarese delegation also held discussions on issues concerning border security, measures for economic cooperation in border areas, border trade and cooperation in the fields of agriculture, industry and science and technology. The 20-member Indian delegation in these talks were led by Union Minister for Commerce and Industry , Murasoli Maran and Union Power Minister, P R Kumaramangalam. The delegation included senior representatives of the ministries of Commerce, Defence, External Affairs, Home Affairs and Power besides representatives of the Northeastern states bordering Myanmar. The discussions are expected to conclude tomorrow. (Special Correspondent; The Assam Tribune, Guwahati; January 8, 2000)

SHILLONG, January 8: A multi-disciplinary delegation, drawn from the public and private sectors in the country will visit Myanmar later this month to promote bilateral cooperation and explore possibilities for Indian investments there. This was decided at a high-level official exchanges between India and Myanmar which concluded here last night, Union Minister for Commerce and Industry, Murasoli Maran announced at a press conference here today. The industrial delegation will explore the possibilities of investing in the fields of computer, electronics, etc. Myanmar is also keen that India set up a diesel generator machine plant. The second delegation will comprise a high-level technical team which will visit the neighbouring country to study the potential for setting up a hydel power station. The exploratory talks here has identified Tamanthi hydro-project, 70 kms from Imphal, for development by India. The team comprising a geologist, a surveyor, and officials of Power Ministry and Central Water Commission will carry out preliminary survey and also locate the ideal spot for the 1000 MW project. The power 'buy back' facility will enable stabilisation of the grid in the Northeastern region, Union Power Minister, PR Kumaramangalam, who was present at the press conference, informed. A third delegation will deal with the matter of setting up a data processing centre in Myanmar which will handle unclassified data on minerals, weather, etc. The Commerce Minister said that the talks in Shillong centred round enhancing bilateral trade between the two countries, including border trade which is crucial for the border states in the Northeastern region. Both the sides have agreed on the need for setting up another trading centre at Champhai (Mizoram) - Rih (Myanmar) point. The two countries also agreed to adopt concrete measures to enhance cooperation in the fields of infrastructure development and science and technology, Maran said. Replying to a query, he said that several issues like border security, insurgency, drugs trafficking, etc., also came up for discussion. With the Myanmarese delegation packed with eight of the top nine functionaries of the ruling Military Junta, Maran was in discomfiture while replying to questions on pro-democracy movement in Myanmar. "In keeping with our policy we have given refugee status to the dissidents there but we will take stern action against them if they did not abide by the laws of the host country", he said. The Myanmarese delegation was led by Gen Maung Aye. It comprised several senior members of the ruling Military Junta. (Special Correspondent; The Assam Tribune, Guwahati; January 8, 2000)

GUWAHATI, January 10: The granting of central Excise duty concession in the Northeast and its subsequent withdrawal has sparked a controversy. Cigarette majors poured into the Northeast following the Union government's relaxation of Excise duty to attract investment. Their subsequent decision to pull out in view of the finance ministry's notification withdrawing the concession has raised many questions. Industry watchers are doubtful about whether the companies are really interested in setting up units in the Northeast or are simply resorting to a "gimmick." Three cigarette majors had proposed investments worth Rs 600 crore here. The Gauhati High Court, in an order on Friday stayed the finance ministry's notification withdrawing exemption of central Excise duty for the cigarette industry in the Northeastern states. The court acted on a writ petition filed by a private party. The interim court order entitles the cigarette companies to continue enjoying the Excise duty concession. However, according to industry watchers, it makes "no economic sense" for such big companies to open up new manufacturing units here when their corresponding units in other parts of the country are running below capacity. "The best option would have been to increase capacity utilisation," an expert opined. Companies would have to invest Rs 100 to Rs 500 crore to set up units proposing to manufacture 10 billion to 60 billion sticks. Added to this is the transportation cost of tobacco from Gujarat and Andhra Pradesh, which experts say would not be covered by the concessions given by the Centre. As tobacco is not grown in the Northeast, companies would have to bring it from states like Gujarat and Andhra Pradesh. All the three varieties of tobacco - bidi, virginia and the general one are produced only in these states. Speculation is rife that the companies might not produce the cigarettes themselves but sublet the production to small-time manufacturers. Even local firms in Assam who are proposing to set up cigarette units will have to tie up with industry majors. Besides, as most of the big units are fully mechanised, there is hardly any likelihood of largescale employment generation, which is the need of the hour in the region. The Centre had asked the cigarette majors to apply for setting up units for which Excise duty relaxations would be given and later withdrawn at a suitable time. The licences for the companies are still pending with the Union industry minister and the letter of intent is valid for a period of two years. The Federation of Industries and Commerce of the Northeastern Region (FINER) has urged the Prime Minister to give an assurance that there would be no dilution of the concessions granted during the period of exemption notified. (Roopak Goswami; The Telegraph, Calcutta; January 11, 2000)

GUWAHATI, January 13: The United Nations Development Program has specifically designed an ambitious bamboo and cane action plan to benefit at least 20,000 families surviving on this "once lucrative trade". Official sources said the project has been designed to explore the potential of bamboo and cane production in the Northeast and provide required infrastructure to the rural artisans and craftsmen. "The region was once well known for its bamboo and cane products. But it is now on the verge of extinction. The project has been specially formulated for its revival," said Utpal Sharma, additional director of the state industry department. Sharma has been assigned the task of co-ordinating the various activities of the project. He said the project aims at reviving the skilled craftsmanship which the region was once known for. "Though the region accounts for more than 60 per cent of the total bamboo production in the country, it is still lagging far behind in all spheres," he said. Sharma pointed out at that both China and Japan have effectively exploited the cane and bamboo resources and become leaders in the international market. "Once the project is implemented properly, it can be used to give better value to the artisans for their products," Sharma said, expressing the hope that the project would be able to better the living standards of the poor artisans, besides generating employment. "The artisans and craftsmen have been fighting a losing battle. Right from arranging raw materials to selling their finished products, they face stiff competition. This is the reason that despite having tremendous potential to be a world leader, we are not being able to show the results," he said. The action plan envisages the setting up of 20 common facility centres throughout the country with 17 in the Northeast alone. While Assam tops the list with five centres, followed by four each in Manipur, Tripura and Arunachal Pradesh, the remaining three will be set up in Kerala. Among the five centres to be set up in Assam, three will be displaying bamboo items. The project has already approved a grant of Rs 10 crore for the setting up of the centres. "Each of these centres will be fully equipped with the latest machinery and tools," Sharma said. He added this would help the artisans and craftsmen to give a more polished look to their products. Sharma said the Assam government has selected five sites for the centres and construction will begin soon. While the Indian Institute of Technology campus here has been selected, the remaining four locations are at Barpeta, Tezpur, Nagaon and Badarpur in the Barak Valley. "The IIT has been entrusted with looking after the functioning of the centre on its campus," he said. Sharma added non-governmental organisations will also be engaged at the three centres in the Brahmaputra Valley. The Assam Small Industries Development Corporation has been entrusted with looking after the Badarpur centre, the official said. Sharma said the process of selecting the NGOs will be completed soon, following which construction will be taken up. Highlighting the role of the IIT, the nodal officer said it could play an effective role, particularly in tool designing and training. "It has been decided that IIT Guwahati, will work in tandem with the IIT Mumbai, in designing and manufacturing of tools and training of artisans in the use of improved tools," he said. Sharma said the industry department would also assist in appointing a nodal officer nominated in the state forest department who would be responsible for co-ordinating and monitoring the activity regarding plantation of varied bamboo species. (Correspondent; The Telegraph, Calcutta; January 14, 2000)