Reports on States' Compliance With Mandate on Trade by Sept – The New Indian Express

By ENS Economic Bureau
Published: 19th May 2015 06:04 AM
 
CHENNAI: With states being given time until this month-end to comply with the Central government’s mandate to increase the ease of doing businesses, the Joint Secretary of the Department of Industrial Promotion and Policy Atul Chaturvedi has said studies on the issue would begin in June and reports on the same would be ready by September.

“A reputed agency will begin looking at the ease of doing business in each state after this month ends. The studies will take sometime and we can expect the publication of the reports before September,” Chaturvedi said, on the sidelines of a ‘Make in India’ seminar held here on Monday by the Indo-French Chamber of Commerce and Industry.

He further said the Centre had begun paying attention to the life-cycle costs of public projects, while awarding tenders.

On FDI in defence, which had recently been allowed to come upto 100 per cent for select cases, Chaturvedi said this might trigger FDIs  now. He was replying to an observation by a participant who said the increase of FDI in defence to 49 per cent had not resulted in a single foreign defence manufacturer coming to India. “It is not just limited to 49 per cent. On a case-by-cas basis, it can go upto 100 per cent. Already, nearly 60 per cent of defence licensing mechanisms have been removed. Therefore, a lot of investment that would have been classified under defence earlier is now being classified elsewhere,” he said.

‘Nokia Fiasco Due to Strategic Blunder’

Chennai: The closure of the Nokia Chennai plant was due to the strategic blunders committed by the company, State Additional Chief Secretary for the Industries Department C V Sankar said. The shutdown and current status of the plant was due to the series of actions by the Finland-based telecom company, he said.  “The issue was not due to any fault of the State government. Nor any lack of efforts on the part of the State government. It was an issue with the I-T Department and the strategic blunders of the company,” he said. The State, he added, was actually having a rather good run with electronic manufacturing with 23 electronic hardware hubs in several major SEZs. “Two exclusive electronic manufacturing clusters are also coming up at Coimbatore and Hosur,” he pointed out.

Income tax issues and strategic blunders of the company resulted in Nokia India issue, says TN's industry secretary
Electronic hardware, other than Nokia, the State has been having a very good run, he added

BS Reporter  |  Chennai  
May 18, 2015 Last Updated at 20:49 IST

The Tamil Nadu government today said the state government had no role in the Nokia plant shutdown in the state, and had blamed the I-T department and “strategic blunders of the company” for the failure.

Speaking at an Indo-French seminar on ‘Make in India’ organised by the Indo-French Chamber of Commerce and Industry (IFCCI) and the Madras Chamber of Commerce and Industry (IFCCI), CV Shankar, additional chief secretary, TN industries department, said “...it’s not because of any fault of the state government or any lack of efforts from the part of the state government. It was basically an issue with the income tax (I-T) department of the Government of India and the strategic blunders of the company itself.”

Shankar said the state was having a very good run in the area of electronics hardware manufacturing, with 23 electronic hardware technological parks already functional in major IT special economic zones, while two manufacturing clusters were coming up at Coimbatore and Hosur.

Earlier, a senior state government official said the Essar Group was among the three investors who had shown interest in reviving the Nokia unit near Chennai. The controversial Nokia plant was frozen by the I-T department in an alleged Rs 21,000 crore tax dispute.

The fate of the plant is lying with the I-T department, and the tax dispute is pending with the Delhi high court. The I-T department had stuck to its stand demanding bank guarantees to the tune of Rs 3,500 crore in the dispute.

However, Nokia has been working hard to get its assets unlocked through a court order so that it could sell its assets and make the part-payment towards the tax arrears, said Sankar.

It may be noted, apart from I-T department’s tax claim, the Tamil Nadu government had also slapped a notice asking Nokia to deposit Rs 912 crore and Rs 600 crore as penalty. Due to the ongoing disputes, Nokia had not been able to transfer the plant to Microsoft, which acquired Nokia’s devices business.

Left with no options, Nokia had suspended the plant’s operations last November, leaving around 30,000 jobless.

According to state government officials, if the I-T department agrees to Nokia’s submission and the court releases their assets, Nokia is ready to sell its plant and deposit the tax arrears in a separate account, and the total claim money can be adjusted once the tax matter is decided by the court.  

“Now, the Prime Minister has assured of reviving the plant. We are hopeful some solution would come out very soon,” said state government officials.

Set up in 2005 with a Rs 500 crore investment, at its peak operations, the Nokia plant had been producing 16 million handsets per month. The plant and machinery are in a good condition and the buyer could start manufacturing from the day one of its acquisition, the officials added.
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