UP announces new investment policy to attract companies leaving China

Policy also seeks to provide a filip to industries in the backward Eastern and Bundelkhand regions

Amid the global Covid-19 headwinds facing the commercial and industrial sectors, the Uttar Pradesh government has cleared a new investment policy aimed at providing a fillip to industries, especially in the backward Eastern UP and Bundelkhand regions.

According to UP industrial development minister Satish Mahana, the new policy will not only boost  existing and new industrial projects, but also has the propensity to position UP favourably before prospective global investors thinking of shifting their manufacturing bases from China following the outbreak of the pandemic and the ongoing US-China trade war.

The state cabinet cleared the new UP investment policy last evening by circulation. It promises to reimburse state goods and services tax (SGST) by 200-300 per cent of the capital investment, subject to differential ceiling depending upon the geography, made by the industries in the Purvanchal (Eastern UP), Bundelkhand regions and Madhyanchal (Central UP) regions.

In Bundelkhand, 70 per cent of the net SGST reimbursement would be applicable for 15 years subject to 300 per cent of the capital investment. Similarly, 70 per cent of the SGST would be reimbursed to the investor subject to the ceiling of 200 per cent of the capital investment made in Madhyanchal during the policy period.

Currently, the industrial units get 70 per cent SGST reimbursement subject to the ceiling of 10 years only, which has now been extended to 15 years, Mahana informed. “There was a general demand from industry for providing added incentives to overcome the current challenges, which we have provided by way of the new investment policy,” he told Business Standard today.

However, the mega and super mega industrial units applying for benefitting under the new policy would be expected to achieve commercial production within 30 months and 42 months respectively of the issuance of the notification of the policy.

Following lockdown, nearly 3.8 million migrant labourers and workers have returned to UP from other states, especially to the Eastern and Central UP districts. The new policy is aimed at accelerating industrialisation in these regions, so that the bulk of the migrant workforce could be absorbed in gainful employment locally.

To woo big ticket investments, especially from global corporations exiting China, the UP government had recently eased norms for the allotment of industrial land. It was done to fast track land allotment by fixing timeline of 15 days for the mega, mega plus and super mega category of industrial investments.

The new land allotment norms covered all the big industrial enclaves including Noida, Greater Noida, Yamuna Expressway etc. The state is confident it would provide further impetus to the ‘ease of doing business’ quotient in UP by streamlining the process and imparting ‘transparency’ to the land management by ensuring a time-bound allotment system in the industrial development authorities.