The Uttar Pradesh government has approved a capital subsidy of Rs 115.7 crore to three units, which have invested more than Rs 100 crore in the state.
A high-powered committee headed by chief secretary Atul Kumar Gupta has cleared the release of the subsidy for KR Pulp & Papers in Saharanpur, Bindal Papers in Muzaffarnagar and Galantt Ispat in Gorakhpur.
According to sources, the previous Mulayam Singh government had framed a policy to give a slew of special incentives such as capital subsidy, infrastructure subsidy, transport subsidy as well as sales tax deferment to those units which pledged an investment of more than Rs 100 crore in the state.
This was done to attract private investment which was already taking flight to the newly-formed Uttarakhand state.
The scheme was floated by the Mulayam Singh Yadav government in 2006, wherein it tried to match up to the incentives that were being given to industries in the newly-formed state of Uttarakhand after the Centre gave it the special economic package.
But many loopholes were detected in the scheme and it was subsequently cancelled by Mayawati government within months of taking charge.
?However, since the credibility of the government, as an institution, was at stake, the government decided that those units which had already been issued ?letters of comfort? by then could be eligible for the scheme if they invest Rs 100 crore till May 2009,? said an official close to the development.
While as many as 15 companies which had applied for the scheme, after verification, three were found eligible.
?The total subsidy approved by the government is Rs 115.7 crore out of which Rs 51 crore will go to Bindal Papers, Rs 40.4 crore to KR Pulp & Papers and Rs 24.28 crore to Gallant Ispat.?
?While the capital subsidy has been approved, the claim for other subsidies such as infrastructure and transport subsidies will be worked out soon and the process for sales tax deferment will also be started soon ,? the official stated.