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Infrastructure and Industrial Investment Policy of UP at a Glance

Having an idea to start something anew is not enough; materialization of that idea is where the hard work begins. Startups and entrepreneurship have been seen as the new game changer and there has been a huge boom in the startup industry in India. Industrial growth has been the talk of the town lately and we can witness emerging industrial growth in various part of the country as states are competing with each other to become investment friendly industrial states. However, to achieve an all round development of a state, it is a necessity that both economic and social development to reach every section of the society. Uttar Pradesh is home to some of the world famous traditional industries with large scale as well as MSMEs, SMEs spread over the state. Infrastructure and Industrial development is key for the all round growth of the state and therefore in the year 2012, the state government launched its Infrastructure and Industrial Investment Policy.

Objectives:

The policy was created with the basic objectives to-

  • Achieve annual industrial growth rate of 11.2 % along with the target of 10% growth in State GDP.
  • Accelerate industrial development in the state.
  • Creating industrial and investment friendly environment across the state to attract high-end investment as well as new employment opportunities across all economic sectors.
  • Qualitative enhancement of skill and capacity of human resources across the state.

Important Fiscal incentives under this policy:

Investment Promotion Scheme-

  • The amount of loan given under this scheme is equal to the amount paid as VAT (Value Added Tax) and CST (Central Sales Tax) by an enterprise. (Simply means if your unit has paid let’s say ₹ 1 crore as VAT and CST then you can get ₹ 1 crore of loan.)
  • Or, the loan amount is equal to 10% of the sales an enterprise has made through sales/business in the first year of that enterprise. (It means if your enterprise has made sales of let’s say ₹ 5 crore then you can get 10% of ₹ 5 crore which is- ₹ 50 Lakh as loan)
  • Loan under this scheme is provided for a period of 10 years.

       Who is eligible for loan under this scheme?

  • In Eastern U.P, Central U.P and Bundelkhand, new industrial units with total capital investment of ₹ 5 crore or more.
  • In Western U.P, new industrial units with total capital investment of ₹ 12.5 crore or more.
  • Industrial units undertaking expansion by minimum 25% of existing production capacity.

Capital Interest Subsidy Scheme-

  • New industrial enterprises in Eastern UP, Central UP and Bundelkhand those have taken loan for plant and machinery, the interest they are paying for the taken loan is reimbursed at 5% with a maximum amount of ₹ 50 lakh per annum for a period of 5 years.
  • For new textile units in Eastern UP, Central UP and Bundelkhand those are paying interest for the loans they have taken for plant and machinery is reimbursed at 5% with a maximum amount of ₹ 1 crore per annum for a period of 5 years.

Infrastructure Interest Subsidy Scheme-

  • Industrial units those are paying interest on the loans they have taken to develop infrastructure facilities for self-use like-road, sewer; water drainage; power line etc. is reimbursed at 5 % with a maximum amount of ₹ 1 crore per annum for a maximum period of 5 years.

Industrial Quality Development Subsidy Scheme-

  • Industrial association and group of industrial units those are paying interest on the loans they have taken to establish testing labs; quality certification lab; tool-rooms etc. is reimbursed at 5 % with a maximum amount of ₹ 1 crore per annum for a maximum period of 5 years.

EPF Reimbursement Scheme-

  • Any new industrial unit that employing more than 100 unskilled workers is reimbursed 50 % of the EPF (Employees’ Provident Fund) contribution for 3 years.

Facilities offered for Mega Projects-

  • Mega projects with an investment between ₹ 200 crore and ₹500 crore is provided special concessions within schemes covered under this policy on case-to-case basis.
  • Mega projects with an investment of more than ₹ 500 crore is provided additional incentives along with the above mentioned incentives.

Stamp duty concessions-

  • These units are given 100% stamp duty concessions-
  1. New IT, Bio-tech, BPO, Food processing, Food Park, Alternative energy resources units.
  2. Private sector infrastructure development projects excluding PPP (Public/Private/ Partnership) projects.
  3. Industrial units in all sectors on purchase, lease or acquisition of land by industrial units in Eastern UP, Central UP and Bundelkhand region.
  • 75% concession on stamp duty is provided to new units on purchasing land from government agencies.
  • 50% concession on stamp duty to new units on purchasing land from private sources in Western UP.

Apart from stamp duty concessions, units are also exempted from Entry Tax and other taxes as well as they are also exempted from Mandi Fee for 5 years.

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