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M&M asks Maharashtra to keep commitments on incentives

M&M asks Maharashtra to keep commitments on incentives
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First Published: Thu, Jun 23 2011. 04 40 PM IST
Updated: Thu, Jun 23 2011. 04 40 PM IST
New Delhi: Mahindra & Mahindra today hit out at the Maharashtra government for changing policy midway saying such steps will severely impact all new investments in the state by existing and new potential manufacturing firms.
The company’s statement comes in the wake of the Nashik Municipal Corporation withdrawing octroi concession granted to the company, as well as the Maharashtra government rolling back tax sops that were given to firms while wooing them to invest in the state.
“Such reversal in policies not only upsets the plans that the investing companies have put in place, it will also severely impact all new investments in the state by existing and new potential manufacturing companies,” Mahindra & Mahindra president (Automotive and Farm Equipment Sectors) Pawan Goenka told the agency.
On Tuesday the Nashik Municipal Corporation withdrew octroi concession granted to the company citing that the economic condition of the corporation was weak.
Moreover, the corporation had decided not to refund Rs25 crore VAT, which the company was entitled as per an agreement with the state government while setting the Nashik plant, for the period between 2000 and 2009.
Earlier in the year, the state government issued a notification that changed rules for VAT set off, thereby resulting in deferment of refund to the companies. Moreover, the companies were to get the incentive only for vehicles sold in the state and not outside.
“Mahindra strongly advocates that the Maharashtra government should keep their part of the commitment on the incentives offered that is conducive to industry,” he said.
He said those who have invested in the state have made plans based on the promises made by the government and a change in the policy midway will affect the firms severely.
“This is especially relevant since we make long-term investments based on commitments made by the state and on the premise that there will not be a policy change which will adversely affect our business plans,” Goenka added.
Maharashtra had managed to woo not only M&M but also other global majors, including Volkswagen and General Motors, to set up new manufacturing facilities in the state totalling over Rs10,000 crore.
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First Published: Thu, Jun 23 2011. 04 40 PM IST