The Hindu Business Line : AP Cabinet okays new industrial policy

THE State Cabinet on Friday approved the New Industrial Policy that would be in force for a period of five years from April 1, 2005 to March 31, 2010.

The policy aims at increasing industrial investment by 10 per cent every year to reach Rs 15,000 crore by 2010.

It also seeks to increase the State's share in Indian exports from the current level of 4.39 per cent to 10 per cent by the end of the five-year period.

To realise these objectives and to attract industrial investments, the policy offers various incentives to industrial units to be set up across the State except in the municipal corporation limits of Visakhapatnam, Vijayawada and Hyderabad. Projects involving substantial expansion or diversification of the existing industries are also entitled for these benefits.

The incentives offered include reimbursement of power at a rate of 75 paise per unit during the first year of the policy. For the remaining four years the rate of reimbursement would be suitably regulated every year so as to ensure that the power cost to the industry is pegged at the first year's level.

The financial implications on account of the implementation of the new policy has been estimated to be around Rs 250 crore, of which an mount of Rs 79.53 crore has already been provided in the budget estimates of 2005-06.

An additional Rs 170 crore is stated to be required during the current fiscal.

The salient features of the policy were released to the press by the Minister for Information, Mr Mohammed Ali Shabbir, following the Cabinet meeting.

The Commissioner of Industries, Mr Suthirtha Bhattacharya, said that separate policies would be formulated for the biotechnology sector.

The major incentives offered by the new industrial policy are:

100 per cent reimbursement of stamp duty and transfer duty paid by the industry.

100 per cent reimbursement of stamp duty for lease of land, shed or buildings.

100 per cent reimbursement of stamp duty and transfer duty paid by the industry on financial deeds and mortgages etc.

Reimbursement of 25 per cent of the cost of land purchased in the industrial development areas of AP Industrial Infrastructure Corporation Ltd subject to a limit of Rs 5 lakh.

Infrastructure assistance to stand alone units by contribution of 50 per cent of the cost of infrastructure from Industrial Infrastructure Development Fund with a ceiling of Rs 1 crore.

Provision of a corpus fund matching the contribution made by consortium industries in Industrial estates subject to a limit of Rs 25 lakh.

15 per cent investment subsidy on fixed capital investment to Small Scale (SSI) and Tiny industrial units subject to a limit of Rs 15 lakh.

25 per cent of the tax paid during one financial year will be ploughed back to all eligible industries as a grant by the Government towards the payment of tax during next year.

3 per cent interest rebate on the prime-lending rate (PLR) on term loans taken by new tiny/SSI units subject to a limit of Rs 5 lakh per year. This will be 5 per cent if SC and ST entrepreneurs promote the units.

An additional investment subsidy of 5 per cent subject to a maximum of Rs 5 lakh will be provided to women entrepreneurs. They will be also given a 5 per cent interest rebate on PLR.

Projects with an investment of Rs 100 crore and above are eligible for all the incentives available to large and medium scale industries.

The Government will also extend tailor-made benefits to suit to particular investment requirements on case-to-case basis.

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