Punjab cabinet approves new industrial policy

Chandigarh: The Punjab Cabinet on Friday approved the state's new industrial policy that has infrastructure, power, MSMEs as its key focus areas and a slew of incentives for various sectors.

The new industrial and business development policy, 2022 shall be effective from October 17, 2022, the time when previous policy's period ended, and the new policy will remain in force for five years.

The new policy lays thrust on creating an enabling environment for the industries and businesses for balanced economic growth, job creation and overall development of the state.

The new policy is structured around key strategic focus areas -- infrastructure, power, MSMEs, large enterprises, innovation, startup and entrepreneurship, skill development, ease of doing business, fiscal and non fiscal incentive, export promotion logistic, stakeholder engagement and grievance redressal, said an official statement here.

The Cabinet had met here under the chairmanship of Chief Minister Bhagwant Mann.

As per the policy, the state will develop 15 industrial parks covering general and sector specific requirements of various industrial sectors and 20 rural clusters across the state.

As per the policy, the state will also allow setting up of dedicated country specific integrated industrial township to attract investment by allowing the infrastructure and other norms of the country.

As per the policy, the manufacturing of auto or auto components including electric vehicle, sports goods including fitness equipment, hand tools including power tools and machine tools, agricultural machinery and equipment, paper based packaging units, circular economy activity including shredding units, and one district one product have been included in the category of thrust sector for the purpose of higher fiscal incentives.

The fiscal incentives include 100 per cent exemption from stamp duty, 100 per cent exemption from change of land use/external development charge to the units in thrust sector and anchor units and 100 per cent exemption from electricity duty from 7 years to 15 years.

The policy also envisages investment subsidy by way of reimbursement of net SGST up to 200 per cent of FCI over a period of 7 to 15 years.

MSMEs are also being provided fiscal incentive in the area of technology, finance, marketing, environmental compliance, e-commerce and freight subsidy for exporting units and exemption from ground water charges.

The new micro and small enterprises, exporting units and service enterprises engaged in providing research and development activities will also be provided 50 per cent capital subsidy on the fixed capital investment up to Rs 50 lakh.

In order to give a boost to the MSME sector, the state under the new policy will set up MSME Punjab, a dedicated wing of the Department of Industries and Commerce with a focus on setting up a common facility and technology centre.

For MSMEs, the state will also implement the World Bank assisted government of India scheme namely Raising and Accelerating MSME Performance (RAMP).

Likewise, the state will strengthen startup Punjab to promote innovation and startups in the state through Punjab Innovation Mission with a special focus on women, Scheduled Caste entrepreneurship.

The policy envisages that variable power tariff shall be freezed for five years at the rate of Rs 5.50 per KVAH (kilovolt-ampere-hour) and shall be applicable for manufacturing units, IT, ITeS unit in the approved industrial park, amusement park, adventure parks developed on minimum area of 50 acres.

The policy also provides attractive fiscal incentives for ultra-mega/mega projects, anchor unit, large units, MSMEs and incentives for rehabilitation of sick large units /MSMEs, special incentives for units in border zone, startup/incubators and first two units in border zone in each sector of manufacturing and service.

As per the policy, the anchor units have been provided incentive of employment generation subsidy up to Rs 36,000 per employees per year for a period of 5 years and at the rate of Rs 48,000 for woman Scheduled Caste/BC/OBC employees.

Under the policy, development of private industrial parks shall be encouraged and 100 per cent exemption of CLU/EDC shall be provided on the industrial and EWS residential component to an industrial park set up within a minimum area of 25 acres (10 acre for IT).