Bihar continues Recently the Bihar Government announced its industrial policy, a significantly updated version to face the challenge of attracting investors from outside as well as inspiring its own entrepreneurial talent. The new industrial policy is said to be based on a close analysis of the policies of some other states like Gujarat, Orissa, Chhattisgarh, Himachal Pradesh and Uttarakhand with a view to attract investment in all categories, especially small and medium industries.
Main Highlights of the New Industrial Policy 2011-16:
1. The policy identified nine “thrust areas” — food processing, agro-based industries, tourism, super specialty hospitals, IT, technical and high education, electronics, hardware and non-conventional sources of energy.
2. Land acquisition – the government assures it would try its best to make land available to the entrepreneurs.
3. Though not part of the policy statement, the state has made available Rs 1,500 crore to the authorities concerned for strengthening the land bank.
4. The new policy provides for a subsidy grant of 50 per cent for setting up captive power plants. The amount of grant/subsidy would go up to 60 per cent if any unit decides to set up non-conventional sources of energy for captive use.
5. Entrepreneurs would not have to pay any stamp duty for land registration when setting up a new industrial unit or carrying out expansion to existing units.
6. The policy will provide a capital subsidy of about Rs 5 crore to those making less than Rs 500 crore of investments whereas Rs 30 crore would be given as capital subsidy to industrial units that invest Rs 500 crore or above.
7. According to the scheme if any industrial unit follows government reservation policy, it would get 10 per cent additional funds. But this is not binding on them.
8. The government would provide special incentive to entrepreneurs from Scheduled Castes or Scheduled Tribes. Women and the disabled would also get similar benefits. For these categories, 100 per cent VAT would be reimbursed if their turnover crosses Rs 30 lakh per annum.
9. To promote quality products and expansion, the policy would allow incentives for the preparation of detailed project reports (DPR), ISO certification and carbon credits.
10. The government would also try to promote quality and reimburse 75 per cent of the fees involved in getting quality certifications.
11. The new policy would exempt new units from luxury tax and reimburse 80 per cent of the value-added tax (VAT) deposited by a fresh unit for a period of 10 years with a cap of 300 per cent of the capital invested in setting up the unit.
12. According to the policy, if a unit appoints 100 persons in a given fiscal on the basis of the government’s reservation policy, the entire employee pension fund (EPF) contribution borne by the company for that year would be fully reimbursed