Incentives under IPR-2014: Industry seeks more time to ground projects

The industry bodies have sought extension of time limit given to the new industrial units for start of commercial production to be eligible for incentives under the new Industrial Policy Resolution (IPR) - 2014, likely to be finalised by the state government by the end of this year.

The draft IPR defines the new industrial unit as an unit where fixed capital investment has commenced on or after the effective date (the date of notification of the IPR) and which goes into commercial production within two years for micro, small & medium enterprises (MSMES) and three years for the rest, from the date of starting first fixed capital investment.

"As it takes time to get the statutory approvals and clearances from different authorities, the time limit given for starting commercial production should be extended to four years for MSMES and five years for the large industries in the IPR", said Ramesh Mahapatra, President, Utkal Chamber of Commerce and Industry (UCCI), the apex industry body in the state.

UCCI suggested that a strict time line must be set for clearances or registrations for each department.

While inordinate delay for notification of incentives has drawn flak from the industry bodies time and again, UCCI demanded for simultaneous issuance of notifications for making incentives operative with the promulgation of IPR.

"Six months' time limit has been prescribed for application to avail respective incentives without any time limit for the disposal and disbursal of the incentives. Notification for making incentives operative should be issued simultaneous with the IPR", the industry body said in its suggestion note.

Urging the Industry department to declare the land allotted to units for more than 15 years in Zone A industrial estates as free hold, UCCI said, the same can be done against payment of reasonable premium as the specific zone is saturated.

The IPR-2014 has categorized four zones for allocation of government land to new industrial units and existing units undertaking expansion/ modernisation/ diversification, including infrastructure projects at the concessional industrial rates.

Similarly, UCCI has requested the government to reduce the ground rent payable by the MSME units in the saturated areas to 0.01 per cent per annum from one per cent of the bench mark valuation of the land.

While the IPR-2014 proposes exemption of stamp duty in cases where reconstruction and amalgamation of companies is sanctioned by the Court under section 394 of the Companies Act with fulfilment of certain provisions, the chamber wants that partial merger may be allowed to avail this benefit.

Welcoming the provision of IPR allowing 100 per cent reimbursement of CST on sales of finished products by the new industrial units in priority sector for a period of ten years, it is of the view that the benefit should continue under the GST (goods and services tax) regime as and when the new tax law is enforced.

UCCI further suggested inclusion of manufacture of feed for fisheries, poultry and dairy products in the priority sector list.

"The state government should also incorporate micro enterprises and cluster of micro industries in the para-17 (priority sector) in the annexure 1 of the draft IPR", said Aswini Kumar Panda, President, Odisha Small Scale Industries Association (OSSIA).

On the condition of starting of construction by the lessee on the leased land granted by state-owned Odisha Industrial Infrastructure Development Corporation (Idco) within six months, UCCI wanted the time limit to be extended to one year.

OSSIA suggested incorporation of the word "physical possession" in the clause.

UCCI also pleaded for inclusion of hotels under MSME sector in the MSME Development Policy 2009.

"We hope than you will consider our suggestions favourable and perhaps initiate promulgation of new MSME Development Policy simultaneously with the publication of IPR-2014 which can be termed as MSME Development Policy-2014" Mahapatra wrote to Secretary, Industries department.

Complaining that the District Level Single Window Clearance Authorities are not functioning properly, the industry bodies have stressed on the effective functioning of the project clearance mechanism.