Uttar Pradesh Industrial and Infrastructure Investment Policy 2012

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The Uttar Pradesh industrial and infrastructure 2012 policy provides benefits like exemptions on stamp duty, subsidies and others in an effort to make the industrial environment in the state better. The policy is expected to be operational by November once the various departments of the state government provide their approval to it.

Highlights of Uttar Pradesh Industrial and Infrastructure Investment Policy 2012

Following are some important points of the latest industrial and infrastructure investment policy of UP:

  • The policy will also provide escort services and single window clearances along with 24 hours power supply for the investors. The escort services will be provided by officers who are basically facilitation professionals from the industry department.
  • The government has held discussions with the stakeholders, entrepreneurs, industrial associations, and government departments before formulating the plan.
  • From now on, as per this policy cases of major investment will be dealt on a one-to-one basis.
  • The government has also kick-started a unique Employees Provident Fund (EPF) compensation program that is expected to increase the employment rate of the state. The scheme states that if an industrial unit employs at least 100 workers, 50 percent of its EPF contributions will be paid back to them for 3 years.
  • As per the policy a 100 percent exemption from stamp duty will be granted to new industrial units being set up in Poorvanchal (eastern UP), Bundelkhand, and Madhyanchal (central UP). The eligibility factor for receiving incentives from the investment promotion program has been brought down to INR 5 crores from INR 10 crores and this is applicable only for Poorvanchal, Bundelkhand, and Madhyanchal. For the rest of the state it has gone down to INR 12.5 crores from INR 25 crores.
  • The state government has proclaimed that it will be providing a total exemption from stamp duty for sectors like information technology, agro processing units, biotechnology, and infrastructure projects such as roads, trans-shipment centers, power, warehousing, wholesale, and cold storage.
  • Industrial estates that are being set up by the private sector entities will also receive a reimbursement of 1/4th of their stamp duty.
  • The state government has also come up with a capital interest subsidy scheme whereby 5 percent of the interest on loans availed for buying machines and setting up plants will be reimbursed. The maximum amount in this case is INR 50 lakhs for a five year period.
  • The government will also initiate an industrial quality development subsidy program for allowing 5 percent reimbursement on interest of loan availed for setting up testing labs, tool rooms, and quality certification labs. The maximum amount in this case is INR 1 crore and it will be available over a 5 year period.
  • According to the policy, the iron and steel sector will be granted exemption from entry taxes.
  • The scheme will also pay an interest free loan that is equal to central sales tax and VAT being paid by the industrial set ups. This payment will go on for a decade. Majority of the packaging and raw materials will be increased and listed for a tax rate of not more than 4 percent.
  • The new policy also provides steps for handling the conventional industrial groups in different parts of the state such as the lock industry of Aligarh, brassware industry of Moradabad, leather industry of Kanpur, and perfume industry of Kannauj. It is expected that these industries will be provided special incentives so that they can flourish and contribute to the state economy.
  • The policy has also considered the election promise of Samajwadi Party to boost the MSME sector. The government has already created a revival and an exit plan for the sick units in this sector in the draft version of the plan.
  • It shall also look to improve the road, air, and rail transportation facilities in the state and extend the network of gas pipeline to improve the overall industrial environment in the state.
  • The policy will also develop National Investment and Manufacturing Zones and industrial clusters.
  • The public private partnership concept is going to be encouraged as well. Land banks are expected to be strengthened by the corporations and authorities responsible for industrial progress of the state.
  • E-governance, police security, and Udyog Bandhu program will be strengthened.

Uttar Pradesh Industrial and Infrastructure Investment Policy 2012 – Aims and Changes from Older Policy

One of the major aims behind introducing the new policy is to match the facilities being provided by neighboring states such as:
  • Rajasthan
  • Haryana
  • Bihar
  • Madhya Pradesh

This is also one of the major reasons as to why the government studied the examples of these states, along with Uttarakhand, Maharashtra, Karnataka, and Gujarat before coming up with its own plans.

By including Madhyanchal in the plan’s ambit the government is aiming to improve the industrial scenario in Kanpur, Lucknow, and the surrounding areas. The program will also look to create 25 lakh fresh jobs.

The new policy has also effected some major changes compared to the previous policy. It has removed the direct capital subsidy and come up with infrastructure interest subsidy and capital interest subsidy facilities. The previous policy had been created 8 years back.

This policy is expected to make the process of dealing with investment proposals quicker and better than before. Anil Kumar Gupta, the Infrastructure and Industrial Development Commissioner, has stated that the UP government is aiming to achieve an industrial growth of 11.2 percent with the new policy. It is expected that the industrial policy will act as a guiding light for critical sectors such as IT, solar energy, and food processing.

Uttar Pradesh Industrial and Infrastructure Investment Policy 2012 – Major Challenges

One of the various promises in the new industrial policy is uninterrupted power supply for the industrial units and this is expected to be a major area of concern for the state government. Anil Kumar Gupta has however stated that the government was going to make a list of substations that were to be erected for improving the electricity condition.

He states that some substations are presently outmoded and this is a major reason that the state does not have 24 hour power supply. However, once the list is finalized Gupta believes some of the problem will be solved.

Till now, one of the major problems facing UP economy was its unbalanced development, much of which has been concentrated in the Noida and Greater Noida areas. With this plan the state government is aiming to look beyond the two areas and make the development more inclusive.

The previous policy had been announced when Mulayam Singh Yadav was the Chief Minister of Uttar Pradesh. During that time he had also set up the UP Development Council (UPDC) and it was led by Amar Singh. However, the policy had only been created for a 5 year period and came to an end during Mayavati’s term in 2009.

It is expected that with the new plan the government will be able to increase its economic growth in the 12th five year plan that will last from 2012-17. In the previous plan the state achieved a growth of 7%.

Uttar Pradesh Industrial and Infrastructure Investment Policy 2012 – Promotion Plans

The state government is planning to host road shows in big cities such as Mumbai and Delhi. Delegations from the state government are expected to visit Singapore, the US, and Europe to woo investors by promoting the new policy.

Uttar Pradesh Industrial and Infrastructure Investment Policy 2004 – Highlights

Following are certain highlights of the industrial and infrastructure investment policy formulated by the UP government in 2004:
  • Establishment of Industrial Infrastructure Development Fund with INR 50 crore over a 4 year period
  • Fiscal benefits for service sector and incentives for new investments
  • Creation of Industrial Infrastructure Development Authority (IIDA) for managing the IIDF
  • Benefits for existing units
  • Setting up international standard infrastructure using private partnerships
  • Simplification and deregulation of concerned legislations and systems
  • Cooperative society of entrepreneurs for maintaining industrial estates
  • Employing chief industrial development officers at certain locations
  • Continuous power supply of 24 hours to industrial zones through dedicated feeders
  • The chief industrial development officers to set up task force for looking into harassment complaints against officials
  • Industrial feeders to be have no power cuts
  • Fast track system for grievance redressal in case of security issues
  • Promotion of co-generation
  • Security forums for traders and entrepreneurs to be created in the districts – these are to be headed by district magistrates
  • Promotion of natural gas an alternative means for energy
  • Chief Minister to hold meetings of Udyog Bandhu once in a quarter
  • Financial help for infrastructure investment
  • Setting up human resources development fund for helping companies train employees
  • Complete exemption from stamp duty for selected industrial units and 50% discount for others
  • Establishment of UP Small Industrial Units Rehabilitation board
  • Concessional registration fees for industrial projects
  • Setting up a rehabilitation package fund

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Last Updated on 09/06/2012