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Punjab woos industry with tax sops Chandigarh, June 3
Sources said the government was under pressure for the past one year to come out with an industrial policy. The SAD-BJP government failed to attract much investment during its last tenure despite a special industrial policy being announced in 2009. Earlier initiatives to attract investment in Punjab have failed because of high land cost, unreliable power supply, lack of focussed planning as well as incentives given to hill states of Jammu and Kashmir, Himachal Pradesh and Uttarakhand. Since the government did not offer cheap land to industrialists, a concession offered by Gujarat and Madhya Pradesh, or give direct sop due to a tight financial crunch, it has gone in for forgoing taxes for a certain period. Deputy Chief Minister Sukhbir Badal announced the new policy was a “win-win” situation for both the government and industry. He said industrialists could earn their incentives while the VAT pool of the state would increase even after industrialists retained a portion of the tax. The slabs allow small industrialists investing Rs 1 to 10 crore to retain 50 per cent of VAT and 75 per cent of CST for seven years, and the highest category of investor putting in more than Rs 500 crore to retain 80 per cent of VAT and 75 per cent of CST for 13 years. Sukhbir said his focus was on granting incentives, making a standard procedure for the same and facilitating the process. “There has always been talk of a single window system but in reality we have hundreds of windows”, he said adding now single window clearance would mean single window.New investors can now upload their applications online, submit self-attested documents and get clearances through a new nodal department, which will decide everything after coordinating with other departments. The entire process is likely to take 15 days. He claimed the new policy would “revolutionise” the industry in Punjab. He claimed the industry was already excited by the “innovative” idea and that it was his own model and not copied from the Gujarat. The state plans to hold an investment summit to attract investment. The new policy is expected to be notified in a month. The government is also moving to circumvent the biggest problem of lack of land. Sukhbir said he had directed the PSIEC (Punjab State Industry Export Corporation) to create a land bank of 5,000 hectares which could be offered to new investors.
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The policy, which favours big-ticket projects besides the IT industry and food processing industry, is applicable to small industry also with the concessions open to anyone investing more than Rs 1 crore in the state. However, the existing industry has been kept out of the policy.