Even as Centre holds up Rs 80K cr UP package, 2 proposals shot down

At a time when the Mayawati government in Uttar Pradesh continues to demand the special Rs 80,000 crore development package for the state...

At a time when the Mayawati government in Uttar Pradesh continues to demand the special Rs 80,000 crore development package for the state, the Centre has turned down two special proposals that the state government had earlier demanded.

These include the setting up of an additional nuclear power unit in the state as well as giving special excise duty exemptions for the Bundelkhand region. It is learnt that both proposals had been turned down by the Centre at a recent meeting between state government officials and the Planning Commission to discuss the annual plan for 2008-09.

Senior officials told The Indian Express that last year the state government had asked the Centre to explore the possibility of setting up a nuclear power plant in the state. UP already has one regional nuclear power plant at Narora (there are two units of 220 mw each) but it runs at a fraction of the capacity because the Nuclear Power Corporation has started the maintainence process of the plant.

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The power-starved state had in September last year specifically asked the Centre to explore the option of setting up another unit at Narora as the “land-locked” state had limited options of setting up power plants.

At last week’s meet, it was pointed out that from the list of approved projects and sites, there were no additional sites in UP and that it was not possible to set up more units in Narora as well.

On the exemption issue, the state government had, as part of the Rs 80,000 crore UP package, asked the Centre to give 100 per cent exemption from central excise and income tax for 10 and 5 years respectively. In addition, it also asked for 30 per cent exemption of income tax for a succeeding 5 years block for the Bundelkhand region.

While the committee headed by member Planning Commission BK Chaturvedi to study the UP package had already ruled against such exemptions in November last year, it is learnt that the state government again raised the issue during the discussions to finalise the annual plan for the state held earlier this week.

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At the meeting, the Centre again turned down this proposal of the state. Confirming this, Chaturvedi, who chaired the meet for the Commission told The Indian Express that though the Centre supports the development of backward regions such as Bundelkhand, such exemptions are difficult to give and do not conform to the national policy.

He added that if such exemptions are given to one state, there are other states such as Bihar, Jharkhand, Orissa, Rajasthan and Madhya Pradesh that will ask for similar exemptions for regions in their states.

The Centre has already approved the Rs 80,000 crore UP package but has made it a sub-set of the total XIth Plan outlay. However, the state government, on its part, wants the package to be outside the Plan outlay.