Patna: With the Nitish Kumar government having given its nod to the new Industrial Promotion Policy, 2011, decks have been cleared for big ticket investments even as the fate of investment proposals worth around Rs 1 lakh crore are left hanging owing to alleged non-cooperation from the Centre.
The new policy, effective from July 1, 2011, will replace the Industrial Policy of 2006 much before its extended term expires in December, 2011. It will place emphasis on addressing basic problems like shortage of power.
Terming the new policy as 'progressive, competitive and quality promoting', Bihar's industry minister Renu Kumari said that it would attract big ticket investments.
"Key areas where we will seek investments on a priority basis are food processing, agro-based industries, tourism, super specialty hospitals, high and technical institutions, IT, textiles, energy and renewable energy,'' she said.
The new policy would provide an additional 10 per cent incentive over and above the cap, the Industry Department said. It also pointed out that emphasis would be laid on social justice.
According to the policy, if a unit appoints 100 persons in a given fiscal on the basis of the government's reservation policy, the entire employee pension fund (EPF) contribution borne by the company for that year would be fully reimbursed.
Thus, a unit with an investment of Rs 500 crore or more would be entitled to a capital subsidy of Rs 33 crore and the same would be applicable in the case of other incentives, the sources said.
To promote quality products and expansion, the policy would allow incentives for the preparation of detailed project reports (DPR), ISO certification and carbon credits.
The government would also try to promote quality and reimburse 75 per cent of the fees involved in getting quality certifications.
There would also be exemption in stamp duty for registration as part of pre-production incentives, sources said.
The new policy would exempt new units from luxury tax and reimburse 80 per cent of the value-added tax (VAT) deposited by a fresh unit for a period of 10 years with a cap of 300 per cent of the capital invested in setting up the unit.
A special provision has also been made to encourage entrepreneurship by SC/ST and physically challenged persons.
If the sum invested were to the tune of Rs 30 lakh, entrepreneurs falling under this category would be entitled to 100 per cent reimbursement of VAT.
The policy would facilitate the creation of a corpus fund for the revival of sick units and a separate fund for the creation of land to encourage small and medium units, attract big investments through adequate promotion and address the basic problems in the way of investment flows that were impending growth till now.
Chief Minister Nitish Kumar has accused the Centre of blocking huge investment proposals worth over Rs 1 lakh crore in the thermal power and ethanol sectors.
He said the state had received investment proposals amounting to Rs 90,000 crore for setting up ethanol manufacturing units and Rs 20,000 crore for establishing thermal power plants.
The state government has sought clearance from the Centre for removing restrictions in manufacturing of ethanol from sugarcane juice, but no decision has been taken as yet, he said.
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