OF MEMBER CORPORATIONS
ARUNACHAL PRADESH INDUSTRIAL
AND FINANCIAL CORPORATION
Industrial Development and Financial Corporation Ltd. (APIDFC) was incorporated
in the Year 1978 as a fully owned company of the Government of Arunachal
Pradesh under the Companies Act, 1956 for promotion of industries in the
State. It is performing the twin role of State Industrial Development Corporation
and State Financial Corporation.
and Objectives :
of Infrastructure Facilities :
Promotion of industries.
assistance to the prospective entrepreneurs.
One of the
main objectives of setting up of APIDFC is to develop infrastructure facilites
for promotion of industrial development in the State. However, APIDFC could
not take up the activities due to the fact that the State Department of
Industries is handling all infrastructure development activities like establishment
of industrial estate/growth centre, export promotion industrial park and
integrated infrastructure development centres. The State Govt. has been
requested to hand over all such activities to APIDFC as is being done in
rich in natural resources and even after the implementation of various
development programmes in the state during the five year plans, the level
of economic development in Arunachal Pradesh continues to be very low compared
with most of the other states of the country. The major factors that have
impeded the industrial development in the state are :
A study of the
resource availability scenario, climatic conditions and environmental opportunities
indicates the following thrust area for industrial development :
Late start to
the process of industrialisation in the region has led to slow growth of
entrepreneurial and industrial culture.
Near absence of
domestic/local manufacture of capital equipment/capital goods industries
which necessitates transportation of machinery at higher costs.
of labour and higher wage rate.
Absence of technical
and business information.
Necessity of maintaining
large inventory due to remoteness of the region.
Limited and dispersed
market for goods within the region coupled with higher cost of marketing
outside the region.
from national competitors using modern technology, larger units and better
distribution network resulting in saturation of accessible markets.
Lack of inflow
of investible funds from outside the state.
Inspite of all
the inherent bottlenecks and constraints for industrial development in
the state, APIDFC promoted a wide spectrum of projects covering various
industrial and service sectors like weaving and knitting, saw mill, plywood
manufacturing, pharmaceuticals, hotels, transport etc.
Agro and horticulture-based
Mining and mineral-based
and paid up share capital :
capital of APIDFC is Rs.600 lakhs and the paid-up capital is Rs. 162.50
lakhs as on March 31, 1999. The Govt. of Arunachal Pradesh is holding the
entire equity of Rs. 162.50 lakhs.
as on March 1999 :
At the end
of March 1999, APIDFC has sanctioned term loan aggregating Rs.815.44 lakhs
to 145 units against which disbursement was made to the tune of Rs.806.83
lakhs to 144 units. The following are the details of the last 5 years :
of dues :
and weak capital base of the Corporation have impeded the performance in
sanction and disbursement. Rising NPAs have been a matter of concern to
the Corporation. To reduce NPAs the Corporation is encouraging one time
settlement of dues of the borrowers whose loan accounts have become sticky
and remained doubtful for years together. Though some of the sections of
the SFCs Act, 1951 have been made applicable in respect of the Corporation
to effect recovery, application of the sections has not yielded the desired
result due to lack of a suitable buyer.
the recovery performance of the Corporation in the last five years are
as under :
two subsidiary companies viz. Parasuram Cement Ltd., a 30 TPD Cement project
at Tezu, Lohit District and Arunachal Horticultural Processing Industries
Ltd,. a 5 TPD fruit processing project at Nigmoi, Along, West Siang. The
commercial operations of both the companies have been suspended due to
continuous loss incurred by these companies.
Government has appointed APIDFC as channelising agency to implement the
various schemes of assistance of National Scheduled Castes and Scheduled
Tribes Finance and Development Corporation Limited, a Govt. of India undertaking
and an apex financial institution for financing facilitating and promoting
the economic development activities of STs of the state. As on March 1999,
the Corporation has sanctioned term loan aggregating Rs.83.28 lakhs to
52 beneficiaries and disbursed Rs.68.97 lakhs to 49 beneficiaries under
the different schemes of assistance.
factors that have had an adverse effect on the financial performance of
the Corporation have been its weak equity base and huge interest burden
on Govt. loan. Against its authorised share capital of Rs.6 crore, its
paid up share capital as on March 1999 is Rs.162.50 lakhs whereas the Corporation
is burdened with interest of Rs. 649.46 lakhs on Govt. loan of Rs.7.13
In the year
1997, the Corporation utilised the services of Tata Consultancy Services
(TCS) to carry out a study on both operational and financial review and
redesign of the Corporation so as to improve its performance. Accordingly
TCS prepared a detailed Corporate Restructuring Report. The report is already
with the Govt. for consideration. The state government has also constituted
a high level committee in this regard.
has promoted a joint venture hotel project at Itanagar with Indian Tourism
Development Corporation under the name of Donyi Polo Ashok Hotel Corporation
for industries :
incentives are available in the state :
@ 90% transportation cost of raw-materials/finished goods between Siliguri
and site of the Project. Also 50% subsidy of transportation cost of finished
goods from one state to another in the NE Region.
under the New Industrial Policy for the NE Region.
Land is allotted
on a 40 years' lease basis.
of built-up factory sheds in the industrial estate on concessional rate
for three years.
fee of Rs.5000/- per head provided the trainees are employed by the industrial
at 15% in case of tiny and SSI units.
at 7.5% to medium and large scale units subject to maximum of Rs.12 lakhs.
Subsidy of 50%
of the cost of technical know-how obtained by SSI and tiny Industries from
reputed research and development organisation subject to Maximum of Rs.50,000/-.
4% subsidy in
interest charged by Financial Institution on term loan for a period of
All the incentives
for rehabilitation of sick industrial units.
50% subsidy towards
cost of diesel generating set upto a maximum of Rs.50,000.
to the power consumed on the actual manufacturing process for a period
of 3 years to all industries except plywood and medium/large scale industrial
50% of the cost
but not exceeding Rs. 25,000/- of feasibility study and preparation of
project report provided the study/report is conducted/prepared with prior
approval and by an approved consutlant.
25% subsidy on
the purchase of testing equipments and fees of the Bureau of Indian Standard
(BIS), both for registration and the annual fee for a period of 5 years
from the date of production.
on the produce of local industries purchased by the government, semi government
and autonomous organisations at the following rates :-
@ 7.5% to
Co-operative venture and large and medium industries.
@ 15% to the
@ 17% to cottage/tiny
sectors, security/earnest money deposits are also exempted for registered