Uttarakhand announces new industrial policy

Aims to develop industries in hilly and remote areas.

Uttarakhand may have seen strong industrialisation during the past five years, mainly in the plains, following the special package announced by the Centre in 2003.

In sharp contrast, the hilly region of the state had largely remained deprived of any such bounties.

But now the new industrial policy announced by Chief Minister BC Khanduri promises to usher in a new beginning in the hills of Uttarakhand with a package to attract investments complete with a slew of sops for 10 years.

"The main objective of the policy is to promote economic development of the hilly and remote areas of the state where industrial process could not take place," said Khanduri.

The new industrial policy, which comes into force from April 1, doles out special power tariff rebate up to 100 per cent. It is for the first time that the government has announced both industrial and power policies together so that they compliment each other, experts said.

Under the new policy, the remote and hilly areas of the state have been categorised in Group A and Group B, with incentives in the former higher than the latter.

Projects with investments over Rs 5 crore will now be classified as mega project. Under the 2003 industrial policy only the projects having investments more than Rs 50 crore were given this status.

The minimum requirement of land for setting up a private industrial estate would now be 2 acres instead of 30 acres. These industrial areas would also be provided financial assistance up to Rs 50 lakh. Also, there will be no stamp duty in the sale and lease deed of the land meant for industrial plots. There will also be capital subsidy on fixed capital investment in building, plant and machinery at the rate of 25 per cent for a maximum of Rs 30 lakh in Group A areas, while a capital subsidy of 20 percent with maximum of Rs 25 lakh will be given for industrial units coming up in Group B areas.

A special VAT rebate up to 90 percent will also be given. Eligible enterprises will also get interest subsidy on loans extended by banks and financial institutions.

With such attractive financial incentives, banks in these areas now have very good opportunities of financing industrial activities, an industrial department official said.

"Our main purpose is to create fresh avenues of employment for our youths in the hills," said Sudhir Nautiyal, additional secretary of the state's industries department.