Daily World Exclusive: Punjab’s new Industrial Policy proposes bold reforms; host of fiscal incentives for investors

Manish Tiwari | Chandigarh

The Capt Amarinder Government has envisaged bold reforms and a host of fiscal incentives in its Draft Industrial Policy, 2017, that include its commitment to provide electricity to existing and new industries at reduced tariff of Rs 5 per unit for five years, incentives to existing units for expansion and modernisation; and huge fiscal incentives as well as exemption from CLU/EDC charges, electricity/stamp duty for Startup, MSME units and large and mega manufacturing enterprises.

The Draft Policy, a copy of which is with Daily World, says that all benefits given to mega units shall also be available to super mega units. In addition, special package of incentives for super mega projects could be provided to suit particular investment requirements on case to case basis based on gestation period, pioneering nature, locational aspects, technology, potential to develop ancillary enterprises, projectÔÇÖs importance to the StateÔÇÖs industrial growth and its ability to generate employment.

The Policy also envisages special incentives for 10 ÔÇÿEarly BirdÔÇÖ operational units and anchor units in any notified industrial estate. The first 10 units shall get 100 per cent reimbursement of net SGST for a period of 10 years subject to 125 per cent of FCI for MSME, large and mega units in place of investment subsidy, while one anchor unit in any notified industrial estate shall be given 100 per cent reimbursement of net SGST for a period of 15 years subject to 200 per cent of FCI for large, mega and super mega units in place of investment subsidy.

According to the Draft Policy, the State Government will reduce stamp duty from 4 to 1 per cent for industrial units on registered mortgage.

The Government also proposes to facilitate rehabilitation and revival of the existing industries financed by Punjab State Industrial Development Corporation (PSIDC), Punjab Financial Corporation (PFC) and Punjab Agro Industries Corporation (PAIC) by way of equity investment, term loan assistance by giving them one last opportunity to settle their dues with these institutions. A detailed OTS policy will accordingly be notified by the State, it adds.

The Policy also proposes special relief package for sick units, including deferment of recovery of arrears of VAT, electricity duty, power bills, house tax and water charges for a period up to five years; deferment of payment of electricity duty by the unit in respect of energy consumed for a period of two years from the date of sanction of rehabilitation package; exemption from power cuts to such units to the extent possible, prompt permission to the sick units for the sale of surplus land and exemption of minimum charges for electricity connection during the closure period. The Punjab Government plans to notify a detailed scheme for interest waiver for settlement of outstanding loans under various State schemes.

As regards the Startup and MSME units, the GovernmentÔÇÖs policy envisages reimbursing 100 per cent of net SGST for 7 years from the date of commercial production with a cap of 100 per cent FCI, interest subsidy of 5 per cent only in border districts and Kandi area subject to a maximum of Rs 10 lakh per year for three years; and an additional State support of interest subsidy of 5 per cent to maximum Rs 5 lakh per year which shall not exceed the amount of net SGST paid during the relevant year to such units eligible under the Credit Linked Capital Subsidy scheme.

Exemption from the provisions of PAPRA

The Draft Policy proposes to exempt all industrial parks, including textile, food, IT, electronics etc from the provisions of Punjab Apartment and Property Regulation Act, 1995.

IT/ITES Service industry

The Government also proposes to allow 40 per cent of mechanical parking whereas podiums/multi-story podium with tower if used for parking shall be exempted from floor area ratio. These units will have permissible FAR of 1:3 of gross area of the project. The Equated Car Space (ECS) shall be one per 100 sq m of covered area upto 5 acre plot and two per 100 sq m of covered area for plot greater than 5 acres. Moreover, five per cent residential component of the total built up area under industrial use shall be permissible for watch and ward staff of the industry.

Apparel and Made-ups sector

The Government plans to provide higher FAR to garmenting units.

IT Parks

The Policy further says that the minimum area required for plotted IT park will be 5 acres for the parks being set up within municipal limits and 10 acres outside municipal limits subject to provisions of the relevant Master Plan. Moreover, in case of built up IT park, the minimum area required will be one acre and the minimum investment required in case of such parks should be Rs 10 crore.

Retail Service Industry

The Government will review norms for infrastructure development for retail projects and shall allow FAR of 1:3, higher ground coverage upto 70 per cent, setting up of the Recreation Ground area for the customers, larger number of car parks in retail development without FAR implications and shall relax restriction on building heights, subject to air safety norms.

Tourism Sector

(i) Heritage hotels situated on narrow roads in urban areas which arrange for a dedicated alternative parking on a 40/60 feet wide road and provide for the park and ride system from hotel to parking place, shall be permitted to operate. Similarly, heritage hotels situated on narrow roads in rural and panchayat/rural areas will be permitted to operate. The same shall be applicable for existing heritage buildings proposed to be used as Heritage hotels.

(ii) The State will declare Old City area in prominent cities such as Amritsar, Ludhiana, Jalandhar and Patiala where land is not available for parking vehicles. Hotel constructions which are of 20 years or above shall be exempted from parking places. The State will provide dedicated alternative parking and park and ride system from hotel to parking place and a congestion charge can be levied on all such hotels.

Mega/Super Mega projects

The Government proposes to exempt all mega and super mega projects from the provisions of PAPRA and allow CLU in agriculture zone in the approved Master Plan and Non Plan areas, provided the minimum land area is 50 acres.

Negative list of industries
The Government does not plan to give any financial incentives under the new industrial policy industries falling under the negative list. These industries are: manufacturing/packing of alcoholic or aerated/carbonated products including distilleries, breweries, wineries, bottling plans and canning plants; manufacturing of tobacco products including cigars, cigarettes and Gutka, brick/tile kilns, manufacturing of cement, vanaspati ghee mills, rice shellers with FCI of less than Rs 10 crore. However, for border districts and Kandi area, only those industries manufacturing tobacco products and brick/tile kilns shall be treated as ÔÇ£negative list of industryÔÇØ.

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