To attract investment worth Rs 25,000-50,000 crore across sectors in the state over a couple of years, the Punjab government notified the much-awaited industrial policy it launched in June.
According to sources, the decision taken by the state government before the two-day Progressive Punjab Investors Summit. To be held on December 9-10, would help attract companies from all sectors, especially information technology, healthcare and manufacturing.
Under the incentive-based Industrial Policy-2013, a liberal package of fiscal incentives for manufacturing sector, integrated textile units, agro and food processing sector and also for electronics hardware and Information Technology has been approved. According to the policy, the state government will offer incentives on Value Added Tax (VAT) and Central Sales Tax (CST), electricity duty, stamp duty, property tax, rural development fund (RDF) and infrastructure development cess.
Also, emphasis has been put for the first time on development of SMEs with a capital investment within Rs 1-10 crore. Under this category, the maximum cumulative quantum of incentive is 50 per cent of the total fixed capital investment.
Madan Mohan Mittal, the industry & commerce minister of Punjab, described it as aggressive, incentive-based policy that, besides changing the paradigm of industrial development, would facilitate investments in the state. He added the state has taken a proactive step to facilitate investment by offering highest incentives in comparision to other states.
For incentives purpose, the state has been divided into two zones; Zone-I (less industrialised) and Zone - II (highly industrialised). According to the policy, the incentives for Zone-I in case of manufacturing units, fixed capital investment from Rs 1 to 10 crore would be eligible for 50 per cent of VAT plus 75 per cent of CST retention for seven years. Units having FCI from Rs 25-100 crore would be eligible for 60 per cent of VAT plus 75 per cent of CST retention with a maximum of 60 per cent of FCI for 10 years. For units with FCI from Rs 100 - Rs 500 crore, VAT incentives would be 70 per cent plus 75 per cent of CST retention with maximum of 70 per cent of FCI for 11 years.
Further, for agro/food processing industry, besides enjoying all benefits of zone I of manufacturing sector would also have Mandi Fee, Rural Development Fee, Infrastructure Development Cess incentives besides purchase tax incentives on wheat and milk. It has been decided that no purchase tax would be levied on wheat and milk purchased and processed in the state. It has also been decided that no VAT/Entry Tax will be charged on farm equipments.
Furthermore, in a major step to make SAS Nagar Mohali and Amritsar as IT hub of the state, he announced incentives including VAT incentives, ensuring 24 hour power, Stamp Duty, Property Tax exemption and exemption from Punjab Pollution Control Board, exemption from all labour laws etc.
In a bid to to boost investment, the state government has taken significant steps in last couple of days. The state cabinet had approved the establishment of the Punjab Bureau of Investment Promotion (PBIP) to carry forward the new investment policy of 2013 expeditiously in a time-bound manner and also gave green signal to the new policy for allotment of 402 acres for IT services, ITES, Bio-Technology, and Technology based Non polluting/Research & Development Facilities in Mohali.
