New industrial policy to focus on MSME growth

Ruchika M Khanna

Tribune News Service

Chandigarh, August 12

Signifying a drastic shift in attracting industry, the Congress government is focusing on the micro, small and medium enterprise (MSME) investors rather than the big-ticket ones. On the cards is a dedicated organisation to accelerate their growth, development of common environment infrastructure, besides identification of MSME clusters in 11 industrial sectors.

With a target of attracting investment worth Rs 5 lakh crore, the government, which will unveil its new industrial policy later this month after a Cabinet nod, will stress on giving less fiscal incentives and more non-fiscal incentives like allowing higher floor area ratio, exemptions from provisions of the Punjab Apartment and Property Regulation Act (PAPRA) and relaxation in building heights. Other than the state announcing to give up a part of its share of State Goods and Services Tax and capping the power tariff at Rs 5 per unit, not many financial incentives will be offered.

The incentives will be given as per industry categorisation. Start-ups and MSMEs will get more incentives, including complete refund of SGST, while large, mega and super mega projects will get lesser incentives. Interestingly, 10 early bird investors will also get some additional fiscal exemptions.

Thrust sectors for investment in the manufacturing sector will be e-vehicles, medical equipment, apparel, footwear and accessories, food processing units, electronics, aerospace and defence, biotechnology and pharmaceutical.

In the e-sector, the thrust areas will be IT, life sciences, healthcare, tourism, entertainment parks and logistics. Other than creating a land bank for new investors, a nodal agency — Punjab State Industrial Infrastructure Corporation — is being created for the maintenance of existing industrial estates and focal points.

The draft industrial policy, which will be the ninth such policy of Punjab since 1978, is now being circulated among a select group of investors for feedback. A perusal of the draft, a copy of which is with The Tribune, shows a paradigm shift in the state’s approach to get investment. The policy focuses on infrastructure, power, ease of doing business through self-certification and self-regulation, start-up and entrepreneurship, skill development dentures in specific industrial clusters and incentives, supported by sector specific strategies for growth.

Those who have defaulted on the repayment of dues to various state government corporations will get an OTS policy. The draft also speaks about the revival and rehabilitation of sick units.

Target by 2022 

• Rs 5 lakh crore investment by 2022 
• Share in GDP: Manufacturing sector 30 per cent; service sector 62 per cent Fiscal incentives 
• Partial or complete refund of State Goods and Services Tax 
• Power tariff at Rs 5/unit 
• Exemption in stamp duty, electricity duty, EDC and property tax 

Non-fiscal sops

• Higher FAR/exemption from provisions of PAPRA and relaxation in height of buildings 
• Infrastructure development 

• On cards are industrial clusters along three industrial corridors – Amritsar-Kolkata, Chandigarh-Amritsar and Chandigarh-Hoshiarpur-Gurdaspur, besides 10 new industrial estates