Punjab bets on digital approvals, incentives to attract investors at summit

From approving business proposals digitally to dedicated relationship managers, the Punjab government is making significant promises ahead of its upcoming Progressive Punjab Investors Summit.

The state government has announced 100 per cent reimbursement of net goods and services tax (GST) incentive for a period of 12 years subject to 125 per cent of fixed capital investment for five early-bird MSME units and five large units, which come into production.

As the state prepares to roll out the red carpet for investors from across the world for the 5th Progressive Punjab Investors Summit on Thursday, an online unified regulator and 40 plus state level approvals across 12 plus departments are some of the ease-of-business advantages the state is listing.

The main focus at the two-day event will be on MSMEs, apart from agriculture and food processing, healthcare, manufacturing and light engineering, plastics and petrochemical, among others.

How many MoUs the state has signed and how much investment it is looking to garner at the upcoming summit is unclear, but Punjab Chief Minister Bhagwant Mann has said he has not just met Indian but also foreign business honchos ahead of the summit.

“I had gone to Chennai, Hyderabad, Mumbai and Germany to invite industrialists to the summit. Industrial honchos in these metros were surprised to note the vast potential of industrial growth in the state,” the chief minister had said.

The Aam Aadmi Party (AAP) government is looking to showcase the state’s strength in areas like cycle and cycle component manufacturing, tractor and agricultural machinery, cotton and blended yarn, and hand tools manufacturing.

To streamline activities pertaining to industrial infrastructure development and maintenance the state will set up the Punjab Industrial and Business Development Authority (PIBDA), a statutory body.

For revival of the sick MSME units, the state government is providing deferment of recovery of various arrears for a period of five years, exemption from minimum charges for electric connection, and exemption from electricity duty for two years. For large units, reimbursement up to 75 per cent of net GST is also being offered.

According to the Department for Promotion of Industry and Internal Trade the state has seen around ~6,580 crore worth of foreign direct investment equity inflow from October 2019 to December 2022.

Punjab accounts for 1.5 per cent of India’s land area and contributes 2.5 per cent to India’s gross domestic product (GDP). However, its rising debt has been a concern.

Ahead of Punjab’s FY24 Budget, economists from the state have raised concerns surrounding what they term “slow growth trap and debt trap”, urging the AAP government to act swiftly to ensure sustainable development of the state.

According to Reserve Bank of India (RBI) data, Punjab’s debt amounted to 53.3 per cent of the gross state domestic product (GSDP), which was the highest in the country.