New Delhi/Chennai: Finance minister Arun Jaitley’s Budget recitation in Parliament on Saturday could light up 30,000 smiles, at least, at distant Sriperumbudur in Tamil Nadu. He is most likely to announce concrete measures to revive the Nokia plant that has been closed since November 1 last year following a tax dispute. A clear roadmap for resuming production is expected in two or three weeks, an official source said.
The closure of Nokia had made global headlines and ended up as a major embarrassment to the Indian efforts to attract foreign investors. Worse still, Chinese handsets flooded the Indian market taking advantage of the Nokia closure. In short, the Nokia story challenged Prime Minister Narendra Modi’s pet projects, ‘Make in India’ and ‘Digital India’.
Taking a firm view of the delay in reviving Nokia, despite a decision to that effect being taken sometime back at the highest level, the Prime Minister’s Office (PMO) reportedly wrote to the Department of Industrial Policy and Promotion (DIPP) and the Department of Electronics and Information Technology (DeitY), telling them firmly to stop their petty games and expedite the revival that would also significantly repair the investor confidence. It was said that while the DIPP was trying to claim credit for the Nokia revival by bringing it under its ‘Make in India’ programme, DeitY wanted to label it as a ‘Digital India’ project.
Top officials involved in the Nokia revival agree that long-term closure of the hi-tech plant in Sriperumbudur would ruin the machinery and remain the loudest example of government bungling questions have been asked why the tax authorities woke up suddenly after six years of slumber whereas Nokia has been arguing that it did nothing in India that was different from its practices at the plants elsewhere in the world.
Now the DIPP and DeitY have reportedly proposed to the revenue department that the Sriperumbudur plant could be sold and the proceeds be kept in an escrow account.
The ultimate winner in the court case would get the escrow money. At the same time, an out-of-court settlement is also possible, a source said.
The income tax department had issued notice to Nokia in March 2013 demanding payment of taxes to the tune of about Rs2,000 crore for six years starting 2006-07; specifically for the royalties it made to its Finnish parent Nokia Oyj for downloading software on its mobile devices.
Apart from this, the Supreme Court had asked Nokia to produce a Rs3,500 crore guarantee before selling the Sriperumbudur plant to Microsoft, which bought its handset business in April 2014. But with Microsoft terminating the mobile purchase agreement, the Sriperumbudur plant, the biggest Nokia handset manufacturing plant in the world, downed shutters. DMK’s Labour Progressive Federation (LPF) general secretary M. Shanmugham said that he would welcome any move by the Centre to revive the Nokia plant in Sriperumbudur.
