MPSIDC seeks more funds to spruce up industrial areas

Ailing State Industries Development Corporation (MPSIDC), which is facing a terminal-legal battle in a multi-crore scam, is planning to seek more funds from various financial institutions to spruce up its core industrial areas in Bhopal, Indore and Gwalior.

MPSIDC, an arm of state industries department is in the final leg of its existence as it is facing legal cases from various creditors.

Interestingly, subsidiaries of MPSIDC are in a sound financial condition but need more funds to improve infrastructure in industrial areas of their administrative control.

“MPSIDC will have to come back to its prime role of developing industrial areas for industries, it will seek funds from various financial institutions to improve infrastructure in industrial areas,” a well-placed source in the entity told Business Standard.

A decade ago, a multi-crore inter-corporate deposit scam allegedly committed by few of its top officials, put MSIDC on the verge of closure. Later, a bail-out package of Rs 210 crore was earmarked but it fell short as interest burden on its dues to various creditors swelled.

Two of its ex-managing directors obtained secured loans from various financial institutions and disbursed them among influential people to commit a Rs 714-crore scam.

The industrialists later refused to pay. The amount involved now mounts to more than Rs 2,000 crore. The financial institutes filed cases against MPSIDC.

“Industrial areas like Govindpura (Bhopal), Malanpur (Gwalior) and Pithampur (Indore) are in very bad shape and need immediate attention. Industries not only need land but improved infrastructure,” said the source.

On the other hand, industries’ association in Govindpura has raised issues of infrastructure and said local administration is blocking roads and passages in name of development by creating unnecessary infrastructure.

“The local government has paid no attention to industrial area development, despite of the fact that we pay taxes to both Municipal Corporation and Audyogik Kendra Vikas Nigams. They only collect taxes and are of no help,” said RS Goswami, president, MP Laghu Udyog Sangh.

State industries department had earlier proposed a model to remove this two-tier tax system and bring all industrial areas under a single tax-net by creating an authority but the issue is pending with state government for the last decade.