Attempt to match incentives provided to industries by neighbouring states like Rajasthan,Bihar,Haryana,Madhya Pradesh
With the target of 11.2 per cent industrial growth in the next five years,the Uttar Pradesh Cabinet today cleared the new Industrial and Infrastructure Investment Policy 2012.
In an attempt to attract investment in three regions of the state,Poorvanchal,Madhyanchal and Bundelkhand,the government relaxed the eligibility criteria for Investment Promotion Scheme from earlier Rs 10 crore to 5 crore of investment. Under the scheme,interest free loans equivalent to VAT and Central Sales Tax paid by industrial units are provided for the period of 10 years.
In a significant decision under the policy,the government has decided to do away with the direct capital subsidy and instead launched a new schemes of capital interest subsidy and infrastructure interest subsidy under the policy. In the new scheme,new industrial units in Poorvanchal,Madhyanchal and Bundelkhand would get reimbursement of 5 per cent on the interest rate of loan taken for plant and machinery for a period of 5 years. This reimbursement would be maximum up to Rs 50 lakh in case of capital interest and upto Rs 1 crore in case of loan taken to develop infrastructure like road,drainage,power line etc.
We have cleared the draft policy,which was placed before the Cabinet today. Now policy would be implemented through government orders in the time to come, said Chief Minister Akhilesh Yadav,soon after coming out of the Cabinet meeting.
Infrastructure and Industrial Development Commissioner Anil Kumar Gupta said: It is a policy which would now act as a guiding policy for departments like IT,food processing,solar energy etc. The policy would be made operational in the next one and a half month through necessary government orders from 10 concerned departments. The Chief Minister has been authorised in the Cabinet to give clearance to these government orders.
He further said that while formulating the policy,the state government has tried to match incentives provided by other neighbouring states like Uttrakhand,Haryana,Rajasthan,Madhya Pradesh and Bihar. As far as mega investment is concerned,the government has decided to deal with them on case to case basis while giving incentive.
Apart from 100 per cent exemption in stamp duty for new industrial units in Poorvanchal,Madhyanchal and Bundelkhand,100 per cent exemption would also be given to investment in infrastructure facilities like roads,power,warehousing,cold storage,information technology,biotech,argo-processing units as well across the state.
Though,Gupta admitted that giving 24-hour uninterrupted power supply to industrial units as promised in the new policy would be a difficult task but he said that in next few days,the government would finalise the list of new power substations that would come up in the state. At present,we are not able to supply 100 per cent of the power received due to out of date sub-stations. The list of new sub-stations would be finalised in next few days and it would help in solving the problem to some extent, he said.
Then in an attempt to generate employment opportunities,the policy also has a provision for special Employee Provident Fund scheme. Under this scheme,the government would reimburse 50 per cent of the EPF contribution of an unit for a period of 3 years to all those new units,who would give employment to 100 or more persons. Apart from this,the government would also give 5 per cent subsidy on interest rate for loan taken for establishing testing labs,quality certification labs etc in the state. Though,this subsidy would be maximum upto the extent of Rs 1 crore for the period of 5 years.
Some other decisions
Hike in electricity duty after 17 years: The cabinet cleared a proposal of the Uttar Pradesh Power Corporation Ltd to increase electricity duty in the state after 15 years. Electricity duty in UP was one of the lowest in the country. Its rate was 9 paise per unit. The cabinet cleared the proposal to charge electricity duty from domestic metered consumer at the rate of 5 per cent of electricity charge and for commercial consumers 7.5 per cent of the electricity charge.
Increase in tax on
commodities: The state government also gave its clearance to increase additional tax on items on which 12.5 per value added tax (VAT) was being charged. This additional tax was being charged at the rate of 1 per cent,and the Cabinet increased it by another 0.5 per cent and made it 1.5 per cent instead. The items in the list include water purifiers,air-conditioners,cameras,mobile phones costing more than Rs 10,000,cement,transformers,electrical appliances etc.