Against giving fresh incentives to fefinery

Former Finance Minister Manpreet Singh Badal has come out strongly against giving fresh incentives to the Bathinda refinery. Manpreet, who as Finance Minister led a high-level committee set up by the Punjab Government in 2007 to talk to the refinery authorities, has stated, “Our committee met many times with the refinery authorities. Letters were exchanged between the government and LN Mittal but at no point they gave us a convincing argument as to why extra concessions should be given to them.” In a press release, he said the argument given by the refinery authorities that more concessions should be given in view of the global downturn post-autumn of 2008 was “disingenuous”. “The demand for concessions was in fact articulated to me in a letter written by Arun Balakrishnan, Chairman of Guru Gobind Singh Refinery Limited, on October 17, 2007”, he said. The incentives demanded by the refinery authorities included an interest subsidy for a period of 15 years, funding of 100 per cent interest cost for investment made in petrochemical units and a soft loan of Rs 1,000 crore. “If we quantify these benefits, they amount to Rs 5,000 crore, which is four times the amount of benefits that have already been given to this refinery. Such exorbitant incentives will put a great strain on the state’s finances. This will also lead to a significant tax loss to the state in future”, he added. Adding that he was not against the refinery and Punjab should in fact aggressively pursue investment in agriculture, industry and services, Manpreet, however, said, “We cannot set a bad precedent by changing the terms of contract just to appease a particular investor”.