With infra, power, and MSMEs as key focus areas, Punjab approves new industrial policy
The Punjab Cabinet Friday approved its new industrial and electric vehicle policies, the move coming three weeks ahead of an investors’ summit planned by the state government on February 23-24 in Mohali.
The policies were approved in a meeting pf the Council of Ministers chaired by Chief Minister Bhagwant Mann.
The new Industrial and Business Development Policy (IBDP)-2022 policy offers a slew of incentives for various sectors, has infrastructure, power, and MSMEs among others as its key focus areas and lays thrust on creating an enabling environment for the industries and businesses for balanced economic growth, job creation and overall development of the state.
The cabinet also approved the Punjab Electric Vehicle Policy (PEVP)-2022 with a move to check the environmental pollution due to emission from vehicles. The policy desires to reduce vehicular emission, create infrastructure, manufacturing, research and development, job creation, ensuring sustainability, besides establishing Punjab as a favoured destination for manufacturing of electric vehicles, components and batteries, an official statement said.
Meanwhile, the IBDP-2022 will be effective from October 17, 2022, the time when the previous policy’s period ended, and will remain in force for five years.
The new policy is structured around key strategic focus areas–infrastructure, power, MSMEs, large enterprises, innovation, startup and entrepreneurship, skill development, ease of doing business, fiscal and non fiscal incentive, export promotion logistic, stakeholder engagement and grievance redressal, said an official statement.
As per the policy, the state will develop 15 industrial parks covering general and sector specific requirements of various industrial sectors and 20 rural clusters across the state.
For the first time, the Punjab government has announced that the anchor units, having an investment of Rs 250 crore and employing 1,000 persons, would be given an incentive of employment generation subsidy of upto Rs 36,000 per employee per year for a period of five years and of Rs 48,000 in case of a woman, SC, BC and OBC employee. The rider will, however, be for the employer to employe only locals.
As per the policy, the state will also allow setting up of dedicated country-specific integrated industrial township to attract investment by allowing the infrastructure and other norms of the country.
In order to give a boost to the MSME sector, the state under the new policy will set up MSME Punjab, a dedicated wing of the Department of Industries and Commerce with a focus on setting up a common facility and technology centre.
For MSMEs, the state will also implement the World Bank assisted government of India scheme namely Raising and Accelerating MSME Performance (RAMP). Likewise, the state will strengthen startup Punjab to promote innovation and startups in the state through Punjab Innovation Mission with a special focus on women, Scheduled Caste entrepreneurship.
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Under the policy, certain categories startups will be given relaxation in public procurement with respect to experience and turn over. The Invest Punjab Business First portal will be integrated with National Single Window Portal and services of NHAI, PWD, RDA, Irrigation Department and Forest will also be included in it.
The policy envisages that variable power tariff shall be freezed for five years at the rate of Rs 5.50 per KVAH (kilovolt-ampere-hour) and shall be applicable for manufacturing units, IT, ITeS unit in the approved industrial park, amusement park, adventure parks developed on minimum area of 50 acres.
The policy also provides attractive fiscal incentives for ultra-mega/mega projects, anchor unit, large units, MSMEs and incentives for rehabilitation of sick large units /MSMEs, special incentives for units in border zone, startup/incubators and first two units in border zone in each sector of manufacturing and service.
As per the policy, the manufacturing of auto or auto components including electric vehicle, sports goods including fitness equipment, hand tools including power tools and machine tools, agricultural machinery and equipment, paper based packaging units, circular economy activity including shredding units, and one district one product have been included in the category of thrust sector for the purpose of higher fiscal incentives.
The fiscal incentives include 100 per cent exemption from stamp duty, 100 per cent exemption from change of land use/external development charge to the units in thrust sector and anchor units and 100 per cent exemption from electricity duty from 7 years to 15 years.
It also envisages investment subsidy by way of reimbursement of net SGST up to 200 per cent of FCI over a period of 7 to 15 years.
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MSMEs are also being provided fiscal incentive in the area of technology, finance, marketing, environmental compliance, e-commerce and freight subsidy for exporting units and exemption from ground water charges.
The new MSMEs, exporting units and service enterprises engaged in providing research and development activities will also be provided 50 per cent capital subsidy on the fixed capital investment up to Rs 50 lakh.
The policy provides sector-specific special incentives like 100 per cent exemption of market fees; RDF upto 100 per cent of FCI over a period of 10 years to the food processing industry; capital subsidy to IT/ITeS at the rate of 50 per cent of the FCI upto Rs 2.5 crore per unit; 5per cent interest subsidy at the rate of Rs 10 lakh per year for five years to the apparels and made-up and technical textile as a additional support to such units covered under A-TUB scheme of Centre.
Under the policy, development of private industrial parks shall be encouraged and 100 per cent exemption of CLU/EDC shall be provided on the industrial and EWS residential component to an industrial park set up within a minimum area of 25 acres (10 acre for IT).
The private industrial parks set up by SPV shall be provided additional incentive of Capital Subsidy at the rate 25 of per cent or maximum of Rs 25 crore. The building bye-laws shall be relaxed by the Department of Housing and Urban Development (HUD).
This article has been republished from The Indian Express.