The Gujarat government, on Friday, announced the new Industrial Policy 2020 for the State, with an expected average annual outlay of up to ₹8,000 crore.

Announcing the policy in Gandhinagar, Chief Minister Vijay Rupani stated that the new “Gujarat Industrial Policy 2020 has been formed to further consolidate the growth momentum that the State has achieved over the past few years, and enhance the current growth rate”.

The policy stresses on bringing investments for job creation, value-addition, adoption of state-of-the-art technology, increasing productivity with Industry 4.0 manufacturing, and creating an innovation-driven ecosystem.

Highlights of the policy

Industries will now be able to get government land for projects on long-term lease up to 50 years (further extendable as per prevailing policy) to industrial enterprises at 6 per cent of the market rate. “The industries will be able to mortgage the land,” said Rupani, highlighting the key aspects of the policy.

To capitalise on the global pandemic situation, the Gujarat government will provide special incentives to companies planning to relocate their operations from abroad to the State.

“We had constituted nine task force committees that held several rounds of serious and productive meetings. It helped us to arrive at this new policy. The policy incorporates most of the suggestions indicated by the industry at large,” Rupani added.

The policy provides capital subsidy and tax incentives to units. In a first, Gujarat took a bold decision to de-link incentives from SGST, with up to 12 per cent of fixed capital investment to be given to large industries for setting up manufacturing operations in the State in the form of capital subsidy.

The new policy is silent on large infrastructure and key industries as part of the port-led development of the State, including LNG, petrochemicals, chemicals, iron and steel, and cement; it lays much stress on the MSMEs.

The new policy enables MSMEs to source foreign technologies with up to 65 per cent of the total cost of technology acquisition being supported by government with a ceiling of ₹50 lakh. The MSMEs will also be eligible for capital subsidy of up to 25 per cent of the eligible loan amount up to ₹35 lakh, while they will be encouraged to install solar rooftop projects on the units with higher tariff for the solar power generated at ₹2.25 per unit against ₹1.75.

While the State is preparing a separate Services Sector Policy, the New Gujarat Industrial Policy 2020 offers interest subsidy of up to 7 per cent up to ₹35 lakh per annum for seven years to service sector MSMEs in the areas of financial services, healthcare, audio-visual, and environmental services, among others.

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