Huge incentives for firms investing in southern districts

This post was originally published on this site

Express News Service

CHENNAI: In an attempt to woo investments to southern Tamil Nadu and generate jobs, the new industrial policy has come out with incentives on land and GST, said Neeraj Mittal, MD&CEO of Guidance. The policy, which has divided all the 38 districts into three categories, namely A, B, and C, offers investors a maximum fixed capital subsidy if they invest in southern as well as industrially backward districts.

As per the policy, the A category includes Chengalpattu, Chennai, Kancheepuram and Tiruvallur districts, while the B category has Coimbatore, Erode, Karur, Krishnagiri, Namakkal, Nilgiris, Ranipet, Salem, Tiruchy, Tirupattur, Tirupur and Vellore. The C category has the remaining 22 districts.

The investors would get a structural package of incentives for large projects, which ranges from Rs 300 crore to Rs 500 crore, with a standard investment period of four years; mega projects in the investment range  of Rs 500 crore and maximum of Rs 5,000 crore and ultra-mega projects whose investments range above Rs 5,000 crore in seven years period in the southern and under-developed districts. The structural incentive packages are offered if they offer jobs for at least 50 persons.

Mittal said that the policy has introduced a flexible capital subsidy of 40 per cent, for the first time, to those industries investing in C category districts. “This provides the investor with a choice of customising incentive package by choosing weights of boosters that are best-suited to maximise the subsidy on business mode. This comprises a standard subsidy of 5 per cent to all eligible projects and additional incentives of 35 per cent depending on boosters based on location, employment, exports, ecosystem creation and if it is in a sunrise sector.

Flexible capital subsidy is a percentage of eligible fixed assets and shall be disbursed over the disbursal period equal to 2.5 times the investment period.Similarly, mega and ultra mega projects, creating 2,000 jobs within the investment period, are eligible for a turnover subsidy. This will be 4 per cent of the cumulative investment in eligible fixed assets per annum for 10 years. “If the project creates jobs for 4,000 persons within the investment period, the company shall get higher subsidy. Also, investors can avail training subsidy of Rs 4,000 per worker for six months for residents of the State. For women and transperson employees, persons with benchmarked disabilities, and those from SC/ST communities, the subsidy shall be Rs 6,000.”

Even the land cost incentive offered is 50 per cent in southern districts for land up to 20 per cent of eligible fixed assets. Also, the policy offers 100 per cent concession on stamp duty payable on lease or purchase of land, shed, building meant for industrial use shall be offered in SIPCOT or SIDCO parks.