Though the Maharashtra government is working to improve ease of doing business in the State, thousands of industries are yet to get the financial assistance promised as part of schemes supporting mega and large projects.
Subsidies and incentives of ₹1,300 crore are pending release under the Package Scheme of Incentives (PSI) and Industrial Promotion Subsidy (IPS) schemes announced in 2013. The five-year period of the two schemes ended in March 2018. A delegation of big and small industries met Chief Minister Devendra Fadnavis this week, threatening a protest if the funds were not released at the earliest, said sources in the government.
A senior secretary from the government said, “The industries are taking an aggressive stand. We have ordered a review to find and remove glitches in the disbursal system.”
CM’s review
Mr. Fadnavis had reviewed the schemes in March and assessed why the amount had been kept on hold by the Finance and Industries departments. When told that a cash crunch in the treasury had delayed disbursal, the CM ordered the Industries Department to submit the claims to the Finance Department so that the backlog could be cleared. “But no action has been taken since,” said the official.
Industries say the bottlenecks in the schemes are hurting their expansion plans, as they generally factor in the assistance in their cash flow for the year in advance. “When the aid does not arrive on time, it is rendered waste and in turn hurts the expansion plans. The government must remove these bottlenecks in disbursal at the earliest,” said Ashish Garde, former president of the Marathwada Chamber of Commerce.
The schemes
The PSI and IPS schemes aim to encourage expansion of industries in remote regions. The schemes have been amended from time to time, but were declared open in 2013, and were to remain operational from April 2013 to March 2018. Units in the private, public, joint and cooperative sectors and mega projects of the central government were eligible for the incentives.
The government disbursed ₹1,933 crore as part of the schemes in 2016-17. It claims that ₹2,500 crore were disbursed in 2014-15, and another ₹2,835 crore in 2015-16. An official from the Finance Department said, “The ₹1,300 crore amount is not an annual backlog, but has been accumulating since the scheme was started in 2013. A delay in receiving claims from the Industries Department has resulted in the backlog.”
In addition to the two schemes, industries get assistance via financial institutions, including the Industrial Finance Corporation of India Ltd, Small Industries Development Bank of India, Industrial Investment Bank of India Ltd, Export Import Bank of India, Life Insurance Corporation of India, General Insurance Corporation of India, and Maharashtra State Financial Corporation. Industries in the State have collectively received ₹63,753 crore of the sanctioned ₹66,218 crore in aid for 2017.
