Andhra Pradesh unveils new industrial policy

Separate set of incentives for textile, biotech, auto sectors

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The Andhra Pradesh government on Wednesday unveiled its industrial development policy, to be in operation for a five-year period from 2015-2020, with a liberal dose of incentives to new industrial units apart from offering land and ease of doing business.

Along with a general industrial policy, the state Cabinet headed by chief minister N Chandrababu Naidu also approved a set of sectoral policies for textiles, biotechnology and automobiles sectors at its day-long meeting today.

The Cabinet also cleared the much talked about ‘single desk’ policy, which seeks to provide all clearances required to set up an industrial unit within 21 working days.

The government proposes to create a consolidated land bank of 1 million acres for allotment to industries. In a major departure from the previous practices, the government would give land to industries on a 99-year lease basis instead of outright sale, officials said.

Projects with an investment of Rs 500 crore or the ones which create direct employment to 2,000 people would be accorded mega industry status and will be considered for special package of incentives, the government said.

One of the major tax incentives for industrial units is reimbursement of 100 per cent VAT/GST for micro and small units for five years, 75 per cent for medium and 50 per cent for large industries for seven years or up to the realisation of 100 per cent fixed capital investment, whichever is earlier.

Other incentives include 100 per cent stamp duty and transfer duty on purchase of land, mortgages and hypothecation and 24/7 power supply with a power cost reimbursement at Re 1 per unit for five years. The government would also provide external infrastructure on a case-to-case basis. SC, ST and women entrepreneurs have been are provided with extra incentives.

Textile policy
The government would provide a host of incentives including 12.5 per cent interest subsidy and a power subsidy of Re 1 per unit for spinning and Rs 1.50 per unit for ginning units. Refund of VAT on purchase of intermediate products, and reimbursement of tax to the extent of 100 per cent of the eligible fixed capital investment in plant and machinery for a period of five years. Capital subsidy on the investment to the extent of Rs 10 crore to standalone garmenting and apparel units, financial assistance of up to 50 per cent of expenditure on common facilities in the case of textile/apparel parks are among the other facilities. For the employees working in these units, the government would extend training fee and the transport subsidies.

Biotechnology policy
Under this projects with a capital investment of over Rs 50 crore or those which provide direct employment to 200 people would be entitled for tailor-made incentives.

The government would set up life sciences knowledge centres in Visakhapatnam, Kakinada, Tadepalligudem, Vijayawada and Tirupati and one mega life sciences park at Visakhapatnam in addition to mini parks and incubation centres at other places.

It plans to set up a guidance cell to assist and advise business units on regulatory compliance and procedures. Incentives include power subsidy, infrastructure support and collaborative research grants.

Automobile and auto components policy
The government would set up two major auto clusters in PPP mode in Nellore and Chittoor districts. Giving a boost to the ancillary industry, the government said all such units of mega integrated projects would get a 75 per cent reimbursement of gross VAT/GST for ten years or 100 per cent equivalent of the capex made by these units in the first seven years. Also, the automobile industry would be declared as public utility in order to prevent strikes.

Single Desk Policy
This policy seeks to create an investor-friendly climate by ensuring the highest ease of doing business and would provide all the clearances within 21 working days. Empowered committees and state-level bureau have been created for review and monitoring the implementation of the policy, which is designed with spot approvals, deemed approvals and online application filing among other features.