Stage set for new industrial & investment policy

The stage has been set for the new industrial and investment policy with a seed fund of Rs 100 crore that was announced for the infrastructure development in the annual Budget 2005-06 in the state Assembly on Friday.

This fund, among other things, is expected to be utilised for energy subsidies which would be extended to non-energy intensive units from April 1, 2005.

According to reliable sources, the Andhra Pradesh government led by Y S Rajasekhara Reddy is considering to give a Re 1 subsidy on each unit (1kwh) of energy to be consumed by the industrial units. The existing electricity tariff for the High Tension consumers in the state ranges between Rs 3.50 and Rs 4.

The state government is toying with the idea of giving subsidy on electricity charges to attract new investments to the state for quite some time now.

This has been part of new strategies being evolved to gain competitive advantage over other states like Maharashtra and Gujarat in the post-VAT scenario. All these and other measures will form part of the new industrial policy which is expected to be announced in March, 2005.

A senior government official said that about 3-4 per cent of the revenues from the state industrial sector, which is estimated to be anywhere between Rs 300 and Rs 400 crore, is proposed to be escrowed in the new infrastructure seed fund, which will be used for electricity subsidy among other purposes.

The government is giving lot of importance to infrastructure support such as roads, electricity and water to the industrial units with a view to make the state an attractive destination for the investors.

In addition to this, the government is also expected to announce a scheme on allotment of government lands to industries either free-of-cost or at nominal rates in the coming industrial policy.

According to sources, the government is also considering to divide the present APIIC into two separate corporations "� one for managing the existing industrial estates and other infrastructural facilities, and the other for the development of new infrastructure for industries.

It may be recalled that the state has created a separate Infrastructure department for fast and better coordination in creation of the required infrastructure for industries.