Hyderabad, Aug. 25
THE State Government has created an Industrial Promotion Fund under the recently announced Industrial Investment Promotion Policy, 2005-10.
The fund will address specific problems of existing large-scale industries. While the Government plans to offer a special package of fiscal benefits on a case-to-case basis, the nitty-gritty would be finalised by the State Investment Promotion Board (SIPB).
To activate the fund, the State Investment Promotion Council (SPIC) met recently and finalised the guidelines and modalities. These would be circulated soon.
Who would be the major beneficiaries of the fund? According to official sources, a list of 10 criteria has been proposed to identify eligible industries.
Primarily, the investment limit for eligible existing large-scale industries has been fixed at Rs 100 crore. The fiscal package would depend on the nature of the project, investment, location and other relevant parameters.
Among the proposed 10 criteria are: A large sick/closed industry with substantial employment potential that is being taken up for revival/rehabilitation under a new management. Similarly, existing industry located in backward areas, sustaining continuous losses and facing threat of closure, would also be eligible.
Industrial units that suffer heavy damage due to natural calamities, extremist violence, and prolonged labour unrest and which are being reopened with infusion of fresh working capital by the management are also covered.
In an obvious attempt to preempt local industries migrating to other states, the Government has incorporated specific incentives and criteria in the guidelines.
Existing industrial units facing marketing problems on account of new units set up in North Eastern Hill States, Gujarat, Himachal Pradesh, Uttranchal etc., which offer 25-30 per cent cost advantage on manufactured goods in the form of excise duty and income tax concessions being offered by Government of India.
The SIPB has the power to sanction fiscal benefits depending on the specific request and need of the industry in question. The benefits include reimbursement of commercial tax paid in one year during the subsequent year at 25 per cent or more, for 5 years. It can also decide on mode of sales tax refund.
The second benefit is the reimbursement of power consumption charges at a prescribed rate over a specific period that the SIPB decides.