Punjab notifies industrial policy, offers nothing new
It took more than six months for the SAD-BJP government to finalise the state Industrial Policy-2013 that Punjab deputy chief minister Sukhbir Singh Badal had announced on June 3. The final shape of the industrial promotion policy is however no different from the one the government had announced offering slew of tax incentives to the new investors.chandigarh Updated: Dec 06, 2013 00:08 IST
It took more than six months for the SAD-BJP government to finalise the state Industrial Policy-2013 that Punjab deputy chief minister Sukhbir Singh Badal had announced on June 3. The final shape of the industrial promotion policy is however no different from the one the government had announced offering slew of tax incentives to the new investors.
It appears that the Punjab government had no option but to notify the policy keeping in view the two-day "Progressive Punjab Investors Summit" to be held on December 9 at SAS Nagar as part of its investment campaign.
Punjab industry and commerce minister Madan Mohan Mittal, who revealed it to the media that the new industrial policy had finally been notified, hardly gave a convincing explanation when asked why it took so long for the government to finalise and notify the same.
"While some of the departments had already submitted the proposals and suggestions pertaining to the new industrial policy, some could not do so on time. Moreover, we have also incorporated health, tourism and Information and Technology sectors into the new industrial policy for the prospective investors," said Mittal.
Mittal who was accompanied by director, industry and commerce, Vikas Partap Singh said the government was hopeful of attracting new investors by offering series of tax incentives.
The investors can retain up to 80% both the Value-Added Tax (VAT) and Central Sales and Tax (CST). Besides, there would be no stamp or electricity duty on the new investors for nearly 10 to 13 years depending upon the capital investment. The government has also decided to waive property and luxury tax. For the manufacturing and textile sector, the government has also decided to waive marketing fee and rural development fund.
According to Mittal, the SAD-BJP government expects an investment of at least Rs 25,000 crore to Rs 50,000 crore coming to Punjab in days to come. "Already, industrialists such as steel baron Lakshmi Mittal, Hindujas, Ambanis, Mahindra and Mahindra, Tatas and Reliance group are showing interest to invest in Punjab. On the first day of the summit we expect to sign MoUs with several business houses. With the new policy we expect to generate an employment of at least one lakh in two years," said Mittal.
The minister was however non-committal when asked if the new policy would have reservation for the local Punjabi youth in terms of employment as introduced in some of the states.
Mittal admitted that during his visit to Bengaluru and Mumbai with Sukhbir, he discovered that the image of Punjab was not very positive. The investors were under the impression that there was lot of labour as well as law and order problem in the state. "However, we have told the prospective investors that Punjab was a peaceful state and there was no dearth of labour in the state," added Mittal.
Mittal said to dispel any further apprehension of the investors that there was electricity scarcity in Punjab, the state government would declare Punjab power-surplus on December 8. Once the first unit of Rajpura thermal plant of 700MW was commissioned on December 8 there would be no shortage of power in the state.
Some of the investors also complained of Punjab not being attached to the sea port. "We have told them that international airport at SAS Nagar would open by December 2014 while another international airport at Amritsar was already functional. Moreover, since the cities such as Bengaluru and Gurgaon are overly saturated the IT sector has no other place to go but to Amritsar and SAS Nagar in Punjab," said Mittal.
Mittal added that there would be no separate policy for the textile industry in Punjab. All incentives for the manufacturing sector have already been included in the policy.
For the existing units, Mittal said the investors who had signed an agreement with the state government under the 2009 industrial policy but have not yet started working on the project would get all tax incentives being offered in the new policy. However, those who have made some progress in their projects would get only 50% incentives.
Punjab constitutes PBIP for fiscal incentives
To provide one-stop clearance to the proposals of new investments in the state the Punjab government has established the Punjab Bureau of Investment Promotion (PBIP) to carry out the objectives of the package of fiscal incentives for the industrial promotion.
The bureau shall have a board of governors of 33 members to be headed by the Punjab chief minister as its chairman and deputy chief minister as co-chairman and industry and commerce minister as vice-chairman. The bureau will also have an executive committee to be headed by chief secretary as its chairman.
Incentives for tourism sector
For hotels organising meetings, conferences and exhibitions, heritage hotel, hotel-cum-spa/resort-cum-spa, special tourism units (farm house, Bed and Breakfast, tented accommodation units, guest house, green hotel, eco tourism units and entertainment infrastructure):
VAT and CST retention up to 80%
No CLU charges for heritage hotels
Water supply charges on industrial rates
Special tourism and eco-tourism units to be offered water supply at domestic rates
5% extra VAT/CST incentives for green hotels
Incentives for health sector
For hospitals, poly-clinics, diagnostic centres and hospitals attached with medical colleges and medical research institutes:
VAT and CST retention up to 80%
Electricity duty, stamp duty, property tax exemptions
No CLU charges for hospitals and clinics attached with medical colleges
Incentives for electronic hardware and IT sector
VAT and CST retention up to 80%
Electricity duty, stamp duty and property tax exemptions
Unique incentives to IT Parks
Incentives to IT and knowledge units only for SAS Nagar and Amritsar districts