Gujarat govt plans incentive scheme to boost manufacturing sector

Aims to increase contribution of manufacturing sector to 32% of GSDP by 2017

The Gujarat government on Monday announced incentive scheme under the state's Industrial Poliy 2009 to boost the manufacturing sector under the state's Industrial Poliy 2009.

Highlighting the features of the scheme in the state assembly on Monday, industries minister Saurabh Patel said that the scheme would primarily cover auto and auto component makers, solar and wind power equipment manufacturers, speciality and fine chemical makers, electronic system design and manufacturing (ESDM) and food and agro businesses.

The scheme has been proposed with an aim to increase the contribution of manufacturing to the State Gross Domestic Product (GSDP) from the present 27 per cent to 32 per cent in 2017. "The proposed scheme would boost the manufacturing sector and in turn provide employment to a large number of people," Patel informed the house.

The state government plans incentives for the manufacturing sector in form of interest subsidy, support for infrastructure, common facilities, common effluent treatment plant (CEPT) and centre of excellence.

Under the scheme government plans 7 per cent interest subsidy to micro, small and medium enterprises (MSME) upto the limit of Rs 25 lakh. For manufacturing units with over Rs 100 crore investment interest subsidy has been proposed at 2 per cent with a cap of Rs 50 lakh. The interest subsidy would be given for a period of five year.

Government also plans to support manufacturing units for building core infrastructure facilities within industrial parks like internal roads, water supply, power and communication. The support would be to the tune of Rs 20 crore or 50 per cent of the total cost whichever in less.

For building common facilities like testing for raw and finished material, design development for new technology or process, the government plans support of 80 per cent of total cost or Rs 10 crore whichever is less.

It has also proposed support for CEPT to the tune of 75 per cent of total cost if the state receives additional funds from the central government. If there is no support from the union government the support from state government would be 40 per cent of the total cost.

The centers for excellence have been planned under the public private partnership (PPP) mode with state government support of 70 per cent with upper limit of Rs 20 crore for a national level centre and Rs 30 crore for international level centre.