Aimed at increasing the contribution of the manufacturing sector to 30% of the state's economy by 2023, the new policy set to consolidate Tamil Nadu’s position as a leading global manufacturing hub through inclusive and regionally balanced growth.
The two new policies come at a time when the ball is about to set rolling for electing a new government by May second week. Tamil Nadu government has also released a new MSME policy.
Tamil Nadu government on Tuesday introduced a new industrial policy 2021 to achieve an annual growth rate of 15% in the manufacturing sector while attracting investments worth Rs 10 lakh crore and creating employment opportunities for 20 lakh people by 2025.
Aimed at increasing the contribution of the manufacturing sector to 30% of the state’s economy by 2023, the new policy set to consolidate Tamil Nadu’s position as a leading global manufacturing hub through inclusive and regionally balanced growth. The two new policies come at a time when the ball is about to set rolling for electing a new government by May second week. Tamil Nadu government has also released a new MSME policy.
The state is the second-largest contributor to the national economy accounting for 8.4% of India’s GDP and has witnessed consistent growth over the years with the GSDP growing at a real CAGR of 8% since 2014 when the last policy was released.
The new policy incorporates recent developments such as relocation of FDI in the aftermath of Covid-19, growth of new sunrise sectors, and regional and national developments. Tamil Nadu reiterates its commitment to the development of new industries, creation of jobs, improvement in labour quality, fostering innovation, and ensuring inclusive and balanced growth, according to the policy document.
The policy provides a structured package of incentives for companies looking to invest more than Rs 500 crore in the state. Tamil Nadu allows a higher level of customisability vis-à-vis other states with investors able to choose from 4 different subsidy models – SGST reimbursement, fixed capital subsidy, flexible capital subsidy and turnover subsidy. SGST reimbursement model allows for companies manufacturing end-use products to avail for 100% reimbursement of gross SGST payable in the state over 15 years, it said.
For other firms, whose sales might not be limited to the state, the policy offers up to 40% of the EFA in the form of fixed capital subsidy or flexible capital subsidy or turnover subsidy over a corresponding period respectively. This policy provides a higher set of incentives for companies wishing to invest in Sunrise sectors.
The firms will be provided with a larger training subsidy, R&D reimbursements, patents and certification costs, among others. To attract firms wishing to relocate and realign their supply chains, a higher set of incentives are provided, including a transportation subsidy of Rs 10 crore.
Further, the policy also provides easy access to credit for investors. Investors can choose if they wish to partner with TIDCO as an equity partner for ultra-mega projects to reduce risk, avail the Industrial ecosystem fund to finance last mile connectivity infrastructure, avail R&D Technology Fund for R&D activities in sunrise sectors, avail the venture capital fund for new ventures in Sunrise sectors, avail term loans from TIIC up to Rs 40 crore.
The state government is also developing a new single-window portal which will provide more than 180 services. The state is also implementing a planning system which provides industrial units set up in government agency promoted or partnered industrial parks, online planning permission and building approval without inspections.