Sensing competition from peer states to woo new investments, the Odisha government is mulling to recast its Industrial Policy Resolution (IPR) last revised in 2015.
Though IPR 2015 was loaded with fiscal and non-fiscal incentives, other states with more sops were better positioned to lure the new investors, especially in non-mineral sectors.
“We don't want to lose edge in drawing investments. The changing dynamics, investor perception and rising competition from other states cannot be wished away. Hence, we are going for a revamp of the existing IPR to accommodate new provisions. The new policy statement is likely to be unveiled in 2020,” said an official source.
Aiming to be positioned among the top three states in 'Ease of Doing Business', Odisha shed four places to finish at the 11th slot at the latest rankings released in 2018. Though Odisha improved its score in compliance with Business Reforms Action Plan and earned the tag of 'leader', it lost ground to competing states in investor perception.
To burnish its image, Odisha plans a revised IPR that will offer investors sops like SGST (State Goods & Services Tax) holiday and electricity duty exemption for five years. It is also expected to sweeten the subsidy on fresh capital investments by existing and prospective investors. The new policy statement is set to be valid for at least five years from the date of its promulgation.
The proposed industrial policy envisages industrial parks for each of the focus sectors and creation of industrial corridors to set up small & medium enterprises across the state. For extension of credit at concessional rates to the eligible MSMEs (micro, small & medium enterprises), a suitable interest subvention scheme shall be introduced by the government.
The state government has been in a fix over extending incentives announced under VAT (Value Added Tax) after the roll out of Goods & Services Tax (GST). Since revenues slid after GST implementation, the finance department was not keen to dangle the VAT related incentives in the post GST era.
Investors in emerging sectors such as electronics manufacturing & information technology, textiles & apparel, petroleum, chemicals & plastics, ancillary & downstream industries and food processing were looking for customized sops to set up their facilities in the state.
Keeping to the requirement of the investors, the state government has been unveiling sector specific policies. The industries department has rolled out several investor friendly apps and to top it all a definitive portal- Government of Odisha Single Window Investor Facilitation & Tracking- GOSWIFT which tracks the entire life cycle of an investment- beginning from proposal to implementation and beyond.
Over the past four years, the state has intensified its outreach efforts, staging roadshows in domestic and overseas locations. Make in Odisha, a biennial investor conclave was first held in 2016 with the state attracting Rs 2.03 trillion worth of investment intents. The second edition organised in November 2018 was a grander showpiece event where investors across sectors pledged Rs 4.19 trillion for Odisha.