With the Nitish Kumar government giving its nod to the new Industrial Promotion Policy, 2011, the decks have been cleared for big ticket investments even as the fate of investment proposals worth around Rs 1 lakh crore hangs fire due to alleged non-cooperation from the Centre.
The new policy, effective from July 1, 2011, will replace the Industrial Policy of 2006 much before its extended term expires on December, 2011, and will have a thrust on addressing basic problems like shortage of power.
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Terming the new policy as "progressive, competitive and quality promoting", Bihar Industry Minister Renu Kumari said it would attract big ticket investment.
"Key areas where we will seek investments on a priority basis are food processing, agro-based industries, tourism, super-specialty hospitals, high and technical institutions, IT, textiles, energy and renewable energy," she said.
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The new policy would provide an additional 10 per cent incentive over and above the cap fixed in the earlier policy, the Industry Department said and pointed out that emphasis would be laid on social justice.
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.
Furthermore, a unit with an investment of Rs 500 crore or more would be entitled to a capital subsidy of Rs 33 crore and the same would be applicable in the case of other incentives, the sources said.
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The new policy, prepared after a thorough study of the policies in six neighbouring states, has four segments with incentives under each head.
Under the policy, the state government has proposed incentives for pre-production, post-production, taxes and others during the establishment of an unit.
The post-production incentives would include a 50 per cent subsidy on captive power, both on DG sets and power plants, which would go up to 60 per cent in the case of renewable energy and special purpose vehicles set up in industrial clusters or areas for common captive consumption.