Rs 14,000 cr Gujarat relief package to help revive stuck industrial estates

It is estimated that due to high penalty over delay in construction of units on estates run by the Gujarat Industrial Development Corporation, work had been stuck over 5,000 hectares of land

The latest 'Atmanirbhar Gujarat' economic relief package of Rs 14,000 crore announced by chief minister Vijay Rupani, among other things, is set to eventually provide impetus for restart of construction currently stuck across 5000 hectares of industrial estates.

It is estimated that due to high penalty over delay in construction of units on estates run by the Gujarat Industrial Development Corporation (GIDC), work had been stuck over 5,000 hectares of land.

"This can now be restarted since such a penalty has been done away with if the work resumes within the next two years from now under the package announced. Also, the one-time settlement of outstanding dues and reduction in interest on loan for industrial unit construction at such estates from 12 per cent to 10 per cent is a major boost," said Ajit Shah, secretary, Federation of Industries Association (FIA) Gujarat.

The package including tax reliefs for property and vehicle, among others, along with subsidies for capital investments and interest payments has been announced as a relief for various segments hit by the Covid-19 and lockdown crisis and aimed at reviving the state's economy.

The package comes as a result of an interim report submitted by a high-powered committee appointed by Rupani under the leadership of former finance secretary to Government of India Hasmukh Adhia.

"After the discussion on the report submitted by the high-powered committee, the State government has decided to offer a Rs 14,000-crore economic package under Atmanirbhar Gujarat. We aim to achieve an economic growth that will have all segments of the society onboard," Rupani stated while announcing the package.

The package is apparently a mix of old and new announcements including direct cash benefits to poor to the tune of Rs 4375.68 crore incurred already by the state government, along with Rs 300 crore for annual 12 kg of pulses for 6.2 million beneficiary households under the public distribution system.

However, various tax reliefs in property, electricity bills and vehicle to the tune of Rs 2,300 crore has now been extended under the package. This includes 20 per cent tax relief on annual property tax bill of 2.3 million owners of commercial establishments, business, offices, hotels, restaurants, shops and hospitals, apart from 10 per cent rebate on property tax of  7.2 million residential property owners, if they pay their bills before July 31.

Also, one-time rebate in electricity bills to over 9.2 million residential, professional and trade consumers across whereas the industry would be extended rebate in fixed charges to the tune of Rs 600 crore.

The state government has also announced Rs 3,038 crore of subsidy for industry in Gujarat, including Rs 450 crore as interest subsidy for textile sector, Rs 458 crore as relief to GIDC for promotion of industry and Rs 1,200 crore to be paid as Goods and Services Tax (GST) arrears before July 31.

As an impetus to the real estate sector, the package includes a Rs 1,000 crore allocation as subsidy for an estimated 160,000 affordable houses in the state including Rs 525 crore of interest subsidy on loans upto Rs 2.5 lakhs availed by shopowners and small business owners wherein the state would bear four per cent interest cost while the beneficiaries would bear another four per cent of the total eight per cent interest. Apart from this, Rs 350 crore allocation for 100,000 homeless tribal workers as beneficiaries of concrete houses in their native villages.

The state government has allocated Rs 410 crore for providing zero-interest crop loans for 2.4 million farmers wherein the state would bear four per cent interest cost while Centre's will bear the rest three per cent interest cost. A one-time settlement scheme for the outstanding dues of the units in the industrial estate areas has also been extended while Gujarat government has also made provision of Rs 133 crore to allow 50 per cent waiver in the interest payable on dues.

Self-employed, workers and individuals under the middle-income groups will be entitled for finance in the range of Rs 1 lakh to Rs 2.5 lakh from cooperative banks and credit cooperative societies which is estimated to benefit 300,000 with a provision of Rs 300 crore.

Meanwhile, among the clusters, Morbi's ceramic cluster has received Rs 30 crore of relief in terms of fuel cost for natural gas consumed by the units with is set to benefit around 1,250 units under the package.