MP plans to offer free land, rebate to power projects

Industry Promotion Policy 2004 is likely to be finalised soon

In an attempt to boost electricity generation, the Madhya Pradesh government is finalising a policy to offer sops to companies interested in setting up power units in the state.

According to a draft of the Udyog Samvardhan Neeti 2004 avam Karya Yojana (Industry Promotion Policy 2004 and Action Plan), a copy of which is with Business Standard, power projects; particularly small and captive power generation units, will get land free and a rebate on interest on the loan obtained from any financial institute to set up a power unit in the state.

The raw material used in power plants will be exempted from the entry tax, according to the draft policy, which is likely to be finalised soon.

"Power production is licence free in the state. Any person can set up power plant under the Electricity Act 2003. The power production will get an industry status and the facilities offered to other industrial units," the draft says.

According to the draft, while a project with an investment of around Rs 50-100 crore will get 10 acres of land free, the Rs 100-200 crore project will get 15 acres and the Rs 200-500 crore project 20 acres.

A project planned to be set up with an investment of over Rs 500 crore will be allotted land on the basis of its requirement and viability.

A rebate of three per cent of the project cost or a maximum of Rs 10 lakh will be offered up to five years for the projects set up in the "A" category districts. The maximum rebate will be up to Rs 20 lakh or five per cent of the project cost.

The state government will also compensate the project report of proposed unit at the rate of one per cent or the maximum of Rs 3 Lakh of its total cost. A similar compensation will be offered on ISO certification, but it will not exceed Rs 1 lakh.

The MP State Industrial Development Corporation will render an "escort" service for getting various clearances required for setting up a power plant, the policy draft says.

The project will also be exempted from the electricity duty provided that power generation begins within 10 years of the launch of the project.

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Power plan

• The raw material used in power plants will be exempted from the entry tax
• A project with an investment of around Rs 50-100 crore will get 10 acres of land free, the Rs 100-200 crore project will get 15 acres and the Rs 200-500 crore project 20 acres
• A project planned to be set up with an investment of over Rs 500 crore will be allotted land on the basis of its requirement and viability