UP plans Rs 200 cr core sector fund

New industrial and service sector investment policy likely to be announced soon

The Uttar Pradesh government will set up an infrastructure development fund with Rs 200 crore corpus under the industrial and service sector investment policy, 2004, likely to be announced soon.

The fund will provide money for preparing surveys, project reports and setting up of integrated transport cum transhipment centre and quality control laboratories.

It will also provide between Rs 50 lakh and Rs 2.50 crore grant for setting up software technology parks, bio-technology centres, multimedia and entertainment complexes, and industrial clusters. The government has earmarked Rs 50 crore for the fund in the Budget for 2004-05.

The new industrial policy, highlights of which are with Business Standard, has set out an elaborate system of concessions and subsidies to promote investment and industrialisation.

Prepared by the UP Development Council, the policy seems to be private sector-oriented and spells ways and means of inviting private investment and strengthening the private sector. It also aims at a faster and transparent disinvestment of public sector undertakings.

The policy promises 24-hour power to industrial areas. Infotech, biotech companies farm-based industries set up with an investment of over Rs 10 crore and other industries involving an investment of Rs 50 crore will be supplied electricity through the dedicated feeder lines and will be exempt from loadshedding.

The state government will also promote captive power generation, gas-based power projects and alternative sources of energy.

The policy envisages concessions on stamp duty and land registration charges. No stamp duty will be charged from small-scale units in seven districts of the Bundelkhand region and 24 districts of the Poorvanachal region.

New investment in these districts will be entitled to a 10 per cent capital subsidy not exceeding Rs 5 lakh a year. Units run by women, Scheduled Caste and Scheduled Tribe entrepreneurs will get a 15 per cent capital subsidy not exceeding Rs 2.5 lakh a year.

New infotech, biotech and food processing units set up with an investment of Rs 10 crore will be recognised as pioneer units. They will be entitled to an interest-free loan for 15 years.

In case of majority of employees being women and SC/ST, the exemption will go up to 20 per cent.They will also be entitled to concessions in terms of stamp duties, bank guarantee and registration and mortgages.

In the service sector, the land for the project, if acquired by the government, will be exempt from acquisition charges. No entry tax will be charged on plant and machinery for the project. They will also not have to pay any electricity duty for the first 10 years and will enjoy exemption from local taxes for five years.

The growth agenda

• The state government has earmarked Rs 50 crore for the fund in the Budget for 2004-05
• Prepared by the UP Development Council, the policy seems to be private sector-oriented
• The new industrial policy also aims at faster and transparent disinvestment of public sector undertakings in the state