CHANDIGARH, Punjab: Punjab Cabinet chaired by Chief Minister Bhagwant Mann approved the Industrial and Business Development Policy (IBDP)-2022 and Punjab Electric Vehicle Policy (PEVP)- 2022 on Friday, February 3, three weeks ahead of the investor’s summit scheduled by the state government for February 23-24 in Mohali.
New Industrial and Business Development Policy (IBDP)-2022 aims to create an industry and business-friendly environment for economic growth, employment generation and overall development of the state of Punjab. This would be achieved with the help of providing incentives to the various sectors, including infrastructure, power and Micro, Small and Medium Enterprises (MSMEs). Starting on October 17, 2022, the new policy would be in effect for five years.
As per the official statement, the new policy focuses on some of the key strategic areas including infrastructure, power, large enterprises, MSMEs, startups, innovation and entrepreneurship, skill development, ease of doing business, fiscal and non-fiscal incentives, export promotion logistics, and grievances redressal.
As per the mandate of the policy, 15 industrial parks will be developed and cover general and sector-specific requirements of various industrial sectors and 20 rural clusters across Punjab.
The Punjab government has also announced that the anchor units, having an investment of ₹250 crore and having 1,000 employees would be given incentives under the new policy. These units will be given an employment generation subsidy of upto ₹36,000 per employee per year and ₹48,000 for women, Schedule Caste (SC), Backward Class and Other Backward Class (OBC) employees for a period of five years.
The policy also allows the formation of dedicated country-specific integrated industrial townships in order to attract investments.
To Boost the MSME sector, a dedicated wing of the Department of Industries and Commerce, titled MSME Punjab, will be established with an enhanced focus on setting up common facility and technology centre. The state will also implement the Raising and Accelerating MSME Performance (RAMP) with assistance from the World Bank.
The state will also boost the promotion and innovation culture in Punjab with the help of Punjab Innovation Mission, with special focus on promoting entrepreneurship among women and the SC community.
The policy also includes the provision to freeze variable power tariffs for the next five years at the rate of ₹5.50 per kilovolt-ampere-hour (KVAH), and it will apply to manufacturing units, IT, ITeS units in the approved industrial parks, adventure parks with a minimum area of 50 acres and amusement parks.
Apart from that, the Punjab Cabinet has also approved the Punjab Electric Vehicle Policy (PEVP)-2022, intending to cut vehicular emissions in the state. The policy is aimed at infrastructure development, manufacturing, research and development while ensuring sustainability to make the state a favourable destination for the manufacturing of electric vehicles, including its components and batteries.
Units engaged in auto components manufacturing, including electric vehicles, sports goods and fitness equipment, hand tools, machine tools and power tools, agricultural machinery and other equipment, will receive higher fiscal incentives as they are in the list of thrust sectors in the new policy. In addition to this, paper-based packaging units, circular economy activities and one district one product have also been included in thrust category sectors.
Fiscal incentives for units engaged in the thrust sector include a 100 per cent exemption from stamp duty, 100 per cent exemption from change of land use charges or external development charges. Anchor units will be given 100 per cent exemptions from electricity duty from seven to 15 years.
The policy also includes sector-specific policy incentives such as a 100 per cent exemption from market fee; capital subsidy to IT/ITeS at the rate of 50 per cent of the FCI upto ₹2.5 crore per unit; RDF upto 100 per cent of FCI over a period of 10 years to the food processing industry; and five per cent interest subsidy at the rate of ₹10 lakh per year for a period of five years would be given to the apparels and made up, technical textiles in the form of additional support to units covered by the A-TUB scheme of the Government of India.