Modi government benefiting Essar Oil, charges Congress

May 1st, 2008 - 1:23 am ICT by admin  

A file-photo of Narendra Modi

Ahmedabad, April 30 (IANS) Gujarat’s opposition Congress Wednesday charged that the Narendra Modi government was giving undue favour to Essar Oil, benefiting the private firm to the tune of Rs.100 billion at the cost of the state exchequer. Shaktisinh Gohil, leader of the opposition in the assembly, told reporters that the state government was enriching Essar Oil by applying a policy of incentives that was in force during 1995-2000.

A division bench of the Gujarat High Court had allowed Essar Oil to avail itself sales tax/value added tax deferment benefits up to 125 percent of investment in the refinery.

But Gohil said the Bharatiya Janata Party (BJP) government had deliberately hidden from the court certain policy aspects .

He said the state government should have urgently filed an appeal in the Supreme Court and failing to do so would result in the loot of the treasury apart from setting a bad precedent because other units would also claim similar benefits.

The industries commissioner under the 1995-2000 industrial policy had given a provisional ‘premier’ registration to the Essar unit that was establishing an integrated greenfield refinery at a cost of Rs.55.44 billion with facilities to process crude of about 9 million MTPA.

The unit then acquired land in backward sub-districts of Lalpur and Khambaliya in Jamnagar district. Later the government allowed benefits under the closed “Capital Incentive to Premier and Prestigious Unit Scheme 1995-2000″ to Essar Oil despite its eligibility coming under scanner for non-commencement of production.

Gohil said three committees headed by senior state officials D. Rajagoalan, K.N. Shelat and P.N. Roy Chowdhary had from time to time decided that Essar Oil was not eligible for the incentives as it had failed to begin commercial production on time despite being given extensions.

When the firm went to the court for relief, the state government did not reveal certain facts in the court and failed to defend its case properly, Gohil said.

“If Essar is allowed to get undue benefits, other units - and there are quite a number of them - would claim benefit which would run into an astronomical sum at the expense of the state exchequer”, he said.

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