Gujarat’s new policy seeks to woo industries looking to relocate

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Updated: Aug 07, 2020 5:38 PM

Government land will be given to industries on long-term lease of upto 50 years at 6 per cent of the market rate.

"In this time of coronavirus pandemic we are coming out with a policy with an aim to create more jobs, increase manufacturing and have an innovation-driven ecosystem towards making `Atmanirbhar' (self-reliant) Gujarat," he said.“In this time of coronavirus pandemic we are coming out with a policy with an aim to create more jobs, increase manufacturing and have an innovation-driven ecosystem towards making `Atmanirbhar’ (self-reliant) Gujarat,” he said.

The Gujarat government on Friday announced its new industrial policy which aims to boost job creation and manufacturing and create an “innovation-driven ecosystem” in the state. Chief Minister Vijay Rupani, while announcing the new policy, said the companies which want to shift their operations from China and other countries in the wake of coronavirus pandemic were welcome to set up base in Gujarat. The policy envisions a spend of Rs 8,000 crore annually on industrial development.

“Gujarat stands first in terms of number of Industrial Entrepreneurship Memorandums, with 51 per cent share of IEMs filed in India in terms of value in 2019,” the chief minister said. “Our aim is to do better with the launch of the new industrial policy,” Rupani, who completed four years in office on Friday, added. “In this time of coronavirus pandemic we are coming out with a policy with an aim to create more jobs, increase manufacturing and have an innovation-driven ecosystem towards making `Atmanirbhar’ (self-reliant) Gujarat,” he said.

“We constituted nine task force committees which met stakeholders before finalizing the policy,” he said. The policy offers capital subsidy and tax incentives to industrial units. The policy document said that in a first, the state has taken a bold decision to de-link incentives from the State Goods and Services Tax, with up to 12 per cent of fixed capital investment to be given to large industries for setting up manufacturing operations in Gujarat in the form of capital subsidy.

Besides, industries will continue to get exemption from electricity duty for five years. Government land will be given to industries on long-term lease of upto 50 years at 6 per cent of the market rate. Micro, Small and Medium Enterprises (MSMEs) can source foreign technologies with up to 65 per cent of the total cost of technology acquisition being supported by government with a ceiling of Rs 50 lakh, the policy said. MSMEs will also be eligible for capital subsidy of up to 25 per cent of eligible loan amount up to Rs 35 lakh. They will be encouraged to install solar rooftop projects in their premises with a higher tariff of Rs 2.25 per unit for the solar power generated against Rs 1.75. Seed capital for start-ups has been increased from Rs 10 lakh to Rs 30 lakh.

“In the light of COVID-19, several industries are planning to relocate their operations or diversify supply chains, and Gujarat will offer special incentives to such companies,” Rupani said. “For this we have had meetings with industry representatives of Japan and United States. Many companies want to shift their operations from China and we will give them benefits on a case to case basis,” he said.

The state will provide Rs 5 crore for setting up research and development (R&D) or product development centres. Permissions to start new units will be granted smoothly, the policy said. “To further strengthen the ease of doing business in the state, a framework for `Mega Permission’ is being prepared, which requires investors to submit one application form for 26 different approvals,” it said.

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