The Telangana government on Thursday unveiled the new industrial policy framework encompassing 14 thrust areas, and with a plan to develop six industrial corridors and common infrastructure for various industries among other things.
The policy framework also listed out sector-specific incentives and steps for a hassle-free and transparent environment for the units to set up and operate. However, the exact amount of incentives will be announced once the sector-specific policies are readied.
“The cornerstone of the policy would be zero graft and zero tolerance to corruption,” the government said in its 22-page policy document, which was tabled in the Assembly by chief minister K Chandrasekhar Rao. The government expects a growth of 4-5 per cent over and above the national average in the manufacturing sector on the back of the new policy. It also promised to bring in a conducive taxation structure besides taking steps against tax evasion by undertaking tax rationalisation on industrial inputs and outputs with neighbouring states like Karnataka, Maharashtra, Gujarat and Tamil Nadu.
“The focus will be on core manufacturing sectors, with the creation of employment for urban and rural youth and adding value to the existing skills emphasised at all stages,” the government said.
The 14 thrust areas cover almost all the major areas of manufacturing though life sciences, IT and hardware and precision engineering occupy the top three slots in that order. Each thrust area will have a sectoral policy and a structure of incentives. High-level advisory panels with experts from the private sector and academia will be constituted for each of the sectors.
Minimum inspection and maximum facilitation, faster single point clearances, development of the required infrastructure for the sector-specific parks to enable investors to start their work on day one from the allotment of land are among the several steps incorporated in the policy. The government also promised to repeal or change old laws after reviewing their impact on the industry.
All the statutory clearances will be taken at the industrial park level by the Telangana State Industrial Infrastructure Corporation (TSIIC) to free investors from the burden of securing permission individually. The government would facilitate merchant power plants of 300-400 Mw capacity in large industrial parks apart from developing common effluent treatment plants (CETP) in joint venture or public-private mode, since it is possible to operate and maintain a CETP on commercial lines.
“Minimum inspection would encompass a system of no random inspections without cause. Subject to statutory requirements, the departments will develop a system where each industrial unit is inspected only once in 3-4 years and the cycle of inspections to be fixed in advance. Even if random inspections are allowed they will be done with the specific written permission of the head of the department,” the policy document said while promising maximum facilitation in the form of self-certification, automatic renewals, helplines etc.
Single-window clearance system (TS-iPASS) will be created at three levels —one for mega projects, other large industries and for SMEs. Special focus on SMEs and micro industries will be given with a set of measures, including setting up of a special fund for addressing incipient sickness and a separate state-level bankers committee.
The focus is also on ancillary and vendor development programmes with an in-built structure to promote the ancillary base in each industrial park.
“Within each of the core sectors, Telangana government is interested in the promotion of the ecosystems covering the entire value chain...The government will plan each industrial park in such a way that along with anchor units, enough plots are available for setting up suppliers/vendors park. Mega projects will have to compulsory set up a suppliers park to encourage the growth of local ancillaries,” it said.
Land would be identified and transferred to the TSIIC, which would determine the suitability of each land besides leveraging the land asset to raise finances for developing basic infrastructure, including exclusive industrial parks in safe zones for red category.
The land would be allotted based on a system, which would also enable the government to take it back if not used, and the land price will be an aggregate of the prevailing market price, cost of development and nominal administrative charges. The policy also offers to acquire even private lands based on investor preference. The original land allottee will not be permitted to reduce his equity beyond 51 per cent during project development. Incentives will be released on time and directly to the bank account of the company with minimum human interface. “The details of general and sector-specific incentives will be issued through government orders from time to time,” it said.
Initiatives for 2014-15
- New Pharma City, Chemical City with well-developed infrastructure including waste management
- Development of Hyderabad-Warangal Industrial Corridor
- Development of Warangal as textile hub for Telangana
- Food Processing and Seed Production initiatives
- Mini-industrial townships along with industrial parks
- Direct loan facility to Dalit entrepreneurs
- Interstate VAT rationalisation on industrial inputs and outputs
- Review and reform of all age-old industry sector regulations, including labour laws
- Incentives on cards
- Stamp duty reimbursement
- Land cost rebate
- Land conversion cost
- Power cost reimbursement
- Investment subsidy
- VAT reimbursement
- Interest subsidy
- Seed capital for 1st generation entrepreneur
- Training and skill development cost reimbursement
- Quality/patent support
- Reimbursement of infrastructure development costs