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The Aam Aadmi Party (AAP) government on Friday unveiled its draft industrial policy-2022, adding new thrust areas and fresh fiscal incentives for micro, small, medium enterprises (MSMEs), incubators and startups while proposing an increase in power tariff.
The Draft Punjab Industrial and Business Development Policy-2022 formulated by the industries and commerce department after detailed deliberations and consultation with entrepreneurs and industrial associations from the state, has been shared with industry and put in public domain for comments and suggestions of stakeholders to make it more industry and investor-friendly.
The 133-page policy document was made public the day the state government announced that chief minister Bhagwant Mann would embark on an eight-day tour to Germany from September 11 to woo investors to the state. “This is the first time comments are being invited from the industry on the proposed policy. The stakeholders can give their suggestions within 15 days,” said director, industries and commence, Sibin C.
3% annual hike proposed in power tariff
In the draft policy, the state government has proposed to provide power to industry at a variable tariff of ₹5.50 per KV for five years with an annual increase of three per cent. “There shall be no increase in the existing fixed tariff. This variable tariff will be reduced during non-peak night hours. This tariff will be applicable to all manufacturing units,” it reads. The state has a two-part tariff – fixed and variable. In the 2017 industrial policy, the variable tariff was frozen at ₹5 per KV for five years. The present policy is set to lapse next month.
New trust sectors added to propel growth
Auto, auto components, electrical vehicles, textiles, including apparel and made-ups and technical textiles, sports goods including fitness equipment, hand tools, agricultural machinery and equipment, machine tools and paper-based packaging units have, along with circular economy units engaged in shredding of auto vehicles and auto parts, manufacturing of bio-diesel and waste management leading to usable product, been added as new thrust areas for additional incentives.
The products identified by the state government under the ‘One District One Product” Scheme will also be categorized as thrust sector in their respective districts and qualify for additional benefits, including better access to finance, infrastructure, technology and market.
For MSMEs, the draft policy has proposed 50% of fixed capital investment subject to ceiling of ₹50 lakh per unit, interest subsidy at 5% subject to maximum of ₹5 lakh per year for five years and 25% of the cost of public issue expenses (access to finance), 100% exemption from electricity duty for 7 years (access to infrastructure), 75% of cost of ERP software subject to maximum of ₹5 lakh for first 5,000 units, 75% reimbursement of expenses incurred for energy, water and safety audit (access to technology), reimbursement of 50% of the cost of onboarding on e-commerce platform (access to market) etc. Scale-up funding and stamp duty reimbursement have been proposed for startups and incubators. The policy also includes additional fiscal incentives for industrial parks (minimum of 25 acres), mega (investment between ₹1,500 and ₹2500 crore) and ultra-mega (above ₹2,500 crore) projects.
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