Punjab Industry demands amendment in draft Industry policy 2022

Punjab Industry demands amendment in draft Industry policy 2022

The Rising Panjab Bureau

In order to attract Rs five lakh crore investment in the next five years as envisioned in the draft Punjab industrial policy 2022, the state government must address the issues confronting the industry. According to the feedback submitted by the industry associations to the state government, the state must do away with some of the provisions of the policy as they are not in the interest of the industry. Some of the contentious issues are:

Condition of 25% increase in installed capacity

The condition of 25% increase in installed capacity should be removed as it is not pragmatic. At times, Industry modernizes, upgrades technologies, and sometimes makes changes in the product design and invests. At the same time some technologies become obsolete, and machines complete their life cycles, as a result of which, investments and modernization shall not always result in expanded capacity. Also, sometimes the additional Investments are done on qualitative, environmental, HR, and cost saving goals and not always for productivity enhancement.

Increase in power Tariff

The Industry is of the view that power tariff should be freezed for five years. As per the policy, the increase of 10% in Power Tariff in one go is very steep. The Industry suggests keeping it at Rs 5.25 per unit with maximum 1.5% annual increase thereof, with proposed formula in policy.

Stamp Duty Exemption

Stamp Duty exemption has been abolished in the draft policy 2022, which existed in previous policy. The industry associations demand that the exemptions should be reinstated. This can play a major role in attracting investment.

Domicile Clause for seeking subsidy

Domicile clause is a non-starter. It is impossible in state like Punjab to get all workers of state domicile. Nevertheless, industry strongly suggest restricting domicile condition to 25% of the total employees. The draft policy offers Employment Generation subsidy @ Rs 36,000 per employee per year for a maximum period of 5 years and @ Rs. 48,000 per employee per year for a maximum period of 5 years for women and SC/BC/OBC employee provided only directly recruited employee having Punjab domicile.

Fiscal Incentives for Mega projects

According to Industry, Ultra-Mega and Mega projects are welcomed, however at the same time in case Mega or Ultra project is involved in manufacturing of same goods which are already being manufactured by MSME, Large, and Anchor units in the state on substantial basis and they are given power at cost much lower than the existing industry, this will render local industry uncompetitive. So, level playing field should be provided. A study of existing capacity should be made before promising such incentive to Ultra Mega and Mega project and should be promised on case-to-case basis.

Regarding SGST Reimbursement

In the draft industrial policy 2022, it is stated that that investment subsidy by way of net State Goods and Service Tax(SGST) reimbursement shall be available to the eligible unit only on the eligible goods sold for consumption in Punjab only. According to sources, limiting SGST refund to goods sold in Punjab is not a correct proposition and would discriminate against those manufacturers who sell goods outside state also.