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Ahead of Global Investors Summit to be hosted by Indore city next month, state government is planning to announce an improved version of existing Investment Promotion Policy. At present Investment Promotion Policy 2010 is effective and does not "suit" to certain investment sector. The 2010 policy was amended in 2012 before 2012 Global Investors Summit.
If well-placed sources in the state government are to be believed the state cabinet is likely to discuss the new policy in its next meeting. The new policy will be called Investment Promotion Policy 2014 and is aimed at offering more facilities, promote entrepreneurship development and create an ambience which is conducive to private partners' cooperation in state development. The policy will offer financial and non-financial facilities.
"The new policy is likely to offer micro, small and medium industries a financial grant up to 15% of the investment or maximum Rs 15 lakh per year for the period of entitlement. Similarly entitled micro, small and medium industries will get interest subsidy up to 5%," the source said.
It is also proposed to grant exemption in entry tax for a maximum period of nine years to all kinds of industry. "Those areas where there is no large or medium scale industry, other micro, small and medium scale industries are likely to be offered exemptions from value added tax for a period of 7 years while the large and mega industries may get exemptions for a period of 10 years," the source said. At present the exemption is available for a period of five and seven years respectively.
All new food processing industrial investment is likely to get exemptions from mandi tax for a period of five years. Similarly textile industry is likely to get investment incentive to an extent of 10% or Rs one crore against Rs 15 lakh which is likely to be proposed for other industries.
Mega investors of more than Rs 500 crore investment, if facing financial difficulties in operation, are likely to get a deferment in government dues for a period of 12 years. However it would be crucial to see if the commercial tax department of the government gives nod to the proposals particularly exemption in Value Added Tax (VAT).
"There are some legal issues in offering deferment to any company under Sick Industrial Company Act," another source said. Also certain activities like packaging, mixing of certain items also fall under manufacturing.
"Thus offering exemptions from VAT etc, may attract litigation from other non-exempted units," the source said. Similarly Mandi tax is likely to be offered only to those food processing units that procure home grown agri-products.
Also non-entitled industry may be excluded from the slew of sops proposed to be offered in the new policy.
The other sops and concessions which are likely to come up in the proposed policy may go to road development that connects industrial area to any main road and also electric supply to industrial area may also be offered some financial assistance on expenses.
The private players, who will develop industrial park in the state may also be offered 15% of the total expenditure or maximum Rs 5 crore. Mega investment is also likely to be considered for sanction of special economic packages.
