Naveen Patnaik govt pitches Odisha as potential hub for defence production, offers fiscal incentiveshttps://indianexpress.com/article/india/naveen-patnaik-govt-pitches-odisha-as-potential-hub-for-defence-production-offers-fiscal-incentives-5444793/

Naveen Patnaik govt pitches Odisha as potential hub for defence production, offers fiscal incentives

In the policy, the government places special incentives for units that will be set up in industrially backward districts, such as Kalahandi, Bolangir, Koraput and Malkangiri, among others. Units are also encouraged to employ people “domiciled in Odisha”.

Odisha Chief Minister Naveen Patnaik waves at the Make in Odisha conclave in Bhubaneswar. (PTI)

The BJD government for the first time on Tuesday tried to pitch Odisha as a potential defence and aerospace manufacturing hub in the country.

On the second day of its flagship investment summit Make in Odisha, the Naveen Patnaik-led government shared its Defence and Aerospace Manufacturing Policy (2018), which offers fiscal incentives in the form of capital subsidies, power tariff reimbursement and training subsidies to manufacturing units. “This is arguably the best policy in the country”, said Industries Secretary Sanjeev Chopra, adding “it is a shame that for all the testing that happens in ITR (integrated test range) Baleswar, manufacturing happened elsewhere”.

The Defence Ministry’s ITR is located at Baleswar district’s Abdul Kalam Island and has facilitated the launch of Akash, Shaurya, Agni and Prithvi missiles. In the policy, the government places special incentives for units that will be set up in industrially backward districts, such as Kalahandi, Bolangir, Koraput and Malkangiri, among others. Units are also encouraged to employ people “domiciled in Odisha”.

For example, a manufacturing unit, set up in a classified industrially backward district with an investment of over Rs 250 crore and employing at least 200 people from Odisha, will be provided with capital subsidy of 10 per cent of the investment capped at Rs 50 crores. The first three original equipment manufacturers (OEMs) setting up units in Odisha will also receive capital subsidy upon meeting conditions regarding investment amount and job generation.

The state government is hoping that the policy will help attract defence manufacturers to Odisha, which already offers comparative advantages such as large-scale aluminium and steel production, deep sea ports, missile testing facility and aligned research and training institutes. Chopra added that Odisha’s engineering colleges churn out about 125,000 technical manpower every year.

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Chief Executive of Lockheed Martin India, Phil Shaw advised the state government to also focus on production of aviation grade material from its aluminium production. “It will be of enormous advantage to India not just for Indian (defence) needs, but also for export”, he said.

India has been the world’s largest importer of major arms for over four years. The state government is keen to produce indigenously designed, developed and manufactured defence equipment for the country, which often involves high import costs, restrictions on niche technology, strict procedural requirements, permissions from multiple agencies and rapid obsolescence.