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Gujarat Announced New Industrial Policy 2020

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Gujarat-announces-New-Industrial-Policy-in-line-with-Atmanirbhar-Bharat-AbhiyanOn August 7, 2020 Gujarat Government announced the New Industrial Policy 2020 for the State, with an expected average annual outlay of up to Rs 8,000 crore, which is meant to provide incentives to the industries. It aims to provide an estimated Rs 40,000 crore as subsidies to industries in the next 5 years. The new policy is in line with the Atma Nirbhar Bharat Abhiyan. It replaces the Gujarat Industrial Policy 2015.

  • Under the new policy Gujarat will become the 1st  state to “delink incentives from State Goods and Service Tax​(SGST)”, where Large industries will be provided up to 12% of fixed capital investment (FCI) to set up manufacturing operations in the state in form of capital subsidy.

Provisions of the New Industrial Policy 2020

Focuses on 15 Thrust areas

The new Industrial policy is divided in 15 thrust areas in core sectors and sunrise sectors as follows:

i.Core sectors–  Electrical machinery & equipment, Industrial Machinery & equipment, Auto & Auto Components, Ceramics, Technical Textiles, Agro & Food Processing, Pharmaceuticals & Medical devices, Gems & Jewelry and Chemicals.

ii.Sunrise Sectors– Industry 4.0 manufacturing, Electric Vehicle and its components, Waste management projects, Green Energy including Solar & Wind Equipment and Eco-friendly compostable material for substitutes to traditional plastics.

Note– Irrespective of any sector, the thrust on 100% export oriented units will be given.

Lease out government land to industrialists

The new policy will allow to lease out government land to industrialists on long term lease of up to 50 years at 6% of the market rate.

Relocation incentives

i.It will Provide incentives to private industrial parks and also provide ‘relocation incentives’ to the units who look to relocate in wake of Covid-19 pandemic, particularly from China.

ii.Relocation incentives- For this purpose the state has already held meetings with Japan, United States, Germany and UK. 

MSME 

i.The state government for the 1st time will provide the support to upto 65% of the total cost of acquiring foreign patented technologies by Micro, Small and Medium Enterprises(MSMEs). The maximum support will be up to Rs 50 lakh.

ii.The state govt will pay 50 paise more to every unit of solar power bought from MSMEs to encourage MSMEs to use rooftop solar power. The new purchase price stands at Rs 2.25 per unit against Rs 1.75.

iii.The policy will announce capital and interest subsidy for MSMEs

Startups

It increases the seed support from Rs 20 lakh to Rs 30 lakh for startups and also offers increased sustenance allowance and additional fiscal support.

Interest subsidy

It offers subsidy of up to 7% up to Rs 35 lakh per annum for seven years to service sector MSMEs in the areas of financial services, healthcare, audio-visual, and environmental services, among others. The state is preparing a separate Services Sector Policy

Incentives to private developers & Tribal Talukas

i.To set up private industrial parks in the state, the private developer will be provided incentives which will be 25% of fixed capital investment up to Rs 30 crore.

ii.For tribal Talukas, it will support establishing industrial parks at 50% of fixed capital investment up to Rs 30 crore.

Key Info

i.The new policy provides for appointment of relationship managers by the Industrial Extension Bureau (iNDEXTb) that hosts the biannual Vibrant Gujarat summit. These managers are meant to be the single point of contacts for investors.

ii.The state government has still not taken a decision about hosting the summit in January 2021.

Gujarat Industrial Policy 2015

The state govt had extended this policy which expired on December 31, 2019 up to the release of a new policy or December 31, 2020, whichever is earlier.

Recent Related News:

i.Macpower CNC Machines Ltd, a Rajkot (Gujarat) based manufacturer of CNC (Computerized Numerical Control), has made India’s 1st indigenous hot air seam sealing machine used to manufacture personal protective equipment (PPE) kits.

ii.Gujarat Govt launched ‘Atmanirbhar Gujarat Sahay Yojna’ to provide loans to small businessmen.

About Gujarat:
Capital– Gandhinagar
Chief minister– Vijay Rupani
Governor– Acharya Devvrat