Policy for SOPS to industry in SC/ST-dominated districts

New Delhi, May 1 (UNI) Caught in between industry resistance to the reservation of jobs in the private sector and the political exigency, the government is expeditiously working on an ''inclusive'' Industrial Policy that will handsomely reward companies setting up units in 60 districts, which have an over 50 per cent population of Scheduled Castes and Scheduled Tribes.

''We have identified the districts which have over 50 per cent of their population from the SCs and STs. A host of liberal fiscal and other incentives will be given to the companies setting up units in these areas employing local people'', a top level source in the government told UNI.

According to this source, the extent of tax rewards will be commensurate directly with the level of employment generated by the industrial units in these SC/ST-dominated districts.

''The tax breaks will be given on the wage bill of those employees who are covered under the Employees State Insurance (ESI).

The idea is to ensure that the wage bill, eligible for tax benefits, should mainly comprise lower level workers and not those in the senior and top management'', he said.

The policy, being given the final touches in the Department of Industrial Policy and Promotion, has the full support of the Prime Minister's Office and is being monitored by Commerce and Industry Minister Kamal Nath, the source said.

Mr Kamal Nath, without elaborating, had stated in Hannover last week that he would take up the new policy to the Cabinet in the next six weeks.

In all, there are 60 districts in the country where the SCs and STs form a bulk of the population and remain backward in terms of both agricultural productivity and industrial development. ''As a starter, if the people of these areas are employed and taken on board, we would have moved towards inclusive growth'', the source said.

The Government had to virtually drop the proposal, which was under the consideration of the Group of Ministers, for a legislation on reservation of jobs in the private sector.

The proposal met with tough resistance not only from the industry but also from many of the Cabinet Ministers who argued, within the GoM meetings, that India's image as a top quality manufacturing hub for the Fortune 500 companies, would suffer a blow if the government insisted on the job quota in the private firms.

The industry, on the other hand, led by the Chambers, offered affirmative options to go in for the labour-intensive units. The Confederation of Indian Industry has set up a Task Force under its past President and former Tata Steel CMD J J Irani to come out with a report in this regard.

The Government expects that industries linked with food processing, agriculture, handicrafts and tribal products should be quite enthusiastic about the proposed Industrial Policy, which would lay more emphasis on the employment generation rather than only value addition.

Unlike the Special Economic Zones where the Finance Ministry is vehemently opposed to the fiscal largese being doled out to the units in the SEZs, the Industry Ministry does not expect much problem from the North Block on the policy for the SC/ST- dominated districts.

''Unlike the SEZs, there would be no revenue implications for the backward districts. This is because, the policy would not involve shifting of units but generate incremental investment'', the high level government source said.

UNI PC RA BD1758