The Hindu Business Line : TN industrial policy focuses on infrastructure, manufacturing

Policy thrust: The Tamil Nadu Chief Minister, Mr M. Karunanidhi, releasing the New Industrial Policy 2007 on Monday. Also seen is the Chief Secretary, Mr L.K. Tripathy.

Our Bureau

Chennai, Nov. 5 The Tamil Nadu Government has announced a new industrial policy that outlines a package of incentives for promoting infrastructure and manufacturing sector.

The thrust of the policy is to encourage investments across Tamil Nadu rather than allowing it to concentrate in Chennai and its environs. It takes into account traditional industries and offers incentives with a focus on employment generation.

The policy also aims to give specific push to investments in automobile sector and electronic hardware by setting a lower threshold of investments to be eligible for incentives.

Vision 2011

The objective of the policy is to create an additional two million jobs by 2011, raise manufacturing sector’s contribution to the GSDP to 27 per cent from 21 per cent, double the State’s annual exports to Rs 1,40,000 crore and improve competitiveness of the SMEs and agro-based industries, according to the policy note.

New manufacturing facilities with a minimum investment of Rs 350 crore in fixed assets over a three-year period in Chennai, Thiruvallur and Kanchipuram would be eligible for a structured package of incentives to be decided on a case-to-case basis. However, investments of Rs 250 crore in other districts would be eligible for the same incentives.

For electronic hardware units, the minimum investment to be eligible for the structured package of incentives would be Rs 250 crore if made in Chennai, Thiruvallur and Kanchipuram and Rs 150 crore elsewhere.

More incentives

The incentive package would be based on investments, employment potential and ability to attract more investments through vendors and ancillaries.

The incentives would also be available to existing companies that set up new manufacturing facilities in a new site or on an adjacent vacant site for expanding existing capacity or making a new product. Expansion projects would also be eligible for the incentives.

Industrial units in existence for more than 10 years in Tamil Nadu would be given extra benefits for expansion projects over and above the normal structured package of incentives, according to the policy note.

Super Mega Projects

New facilities or expansion projects with investments of over Rs 1,500 crore would be treated as super mega projects and eligible for incentives over and above the normal structured package of incentives.

For the infrastructure sector, the incentives are: An industrial infrastructure subsidy of Rs 2 crore for projects involving investment of Rs 300 crore in three years. Developers would be eligible for 100 per cent exemption from entry tax, tax on works contract and input taxes from the date of notifying as an approved infrastructure project till commissioning.

Service Sector

The services sector accounts for the largest chunk of employment after agriculture. The major employment opportunities are in real estate construction services, financial services, ITES, BPO and engineering process outsourcing. The State Government will promote aircraft maintenance, repair and overhaul services as part of Chennai airport expansion and modernisation.

For the construction sector, a fee-based single window clearance mechanism would be put in place for all major construction projects covering clearances from the Government departments.

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