Punjab

Introduction

  • As per the report published by DIPP the FDI inflows in Punjab, Chandigarh, Haryana, Himachal Pradesh for the year 2016-17(April’16 – December’16) (In US$ Millions) is 6and the percentage of total inflows is 0.4.
  • Punjab, located in north-west of India has a total area of 50,362 kms, which comprises of 48,265 kms of rural area and 2097 kms of urban area.
  • Punjab borders the West Punjab to the west, Jammu and Kashmir to the north, Himachal Pradesh to the northeast, Haryana to the south and southeast, Chandigarh to the southeast and Rajasthan to the southwest.
  • The state has a total population of 27.74 million with a literacy rate of 76.7%.
  • The five rivers Sutlej, Beas, Ravi, Chenab and Jhelum divide the state into three regions, namely, Majha, Doaba and Malwa.
  • Agriculture is the largest industry in Punjab and other major industries include the manufacturing of scientific instruments, electrical goods, financial services, machine tools, textiles, sewing machines, sports goods, starch, tourism, fertilizers, bicycles, garments and the processing of pine oil and sugar
  • It contributes nearly two thirds to the total production of food grains and a third of milk production in the country. It is the leading producer of wheat at a total production of 2 million tons per annum.
  • Punjab has a rail network of 2,126 Kms and road connectivity of 64,037 Kms with a road density at 133 Km per 100 Sq. Km. which is among the highest in the country and five upcoming and operational airports at Mohali, Ludhiana, Amritsar, Bathinda and Pathankot.
  • The state has an installed capacity of 11,664 MW with a power surplus of around 2,000 MW.

Investment Promotion Agencies in Punjab

Industries, Commerce & Investment Department

The Department of Industries and Commerce plays a pivotal role in rendering assistance to the entrepreneurs. The process of assistance begins with the very first stage of project identification to financial assistance up to the commissioning of Industrial units. The existing industry is also helped in the process of continuous up gradation of technology and modernization.

The main functions of the department are as follows:

  • All matters relating to Promotion, development and regulation of electronics in the State, The Punjab State Electronics Development and Production Corporation Limited and companies owned, managed or promoted by it in the Joint Sector and Telecommunications.
  • All matters relating to establishment of the Directorate of Industries and annual Administration Reports of the Department of Industries.
  • Overviewing the functioning of various credit and loan scheme for industries.
  • Development of Industries in the backward areas.
  • Providing loan subsidies and grant-in-aids under various legislations.
 

Punjab Bureau of Investment and Promotion

  • Punjab Bureau of Investment Promotion (Bureau) has been set up by the Government of Punjab as the single point of contact for regulatory clearances and fiscal incentives approvals to facilitate investors who are looking to set up a business in Punjab. As the nodal agency, Bureau has been entrusted the responsibility to ensure a smooth transition of the project from the proposal stage up to the implementation stage.The member departments include:
    • Department of Excise and Taxation
    • Department of Factories
    • Department of Forests and Wild Life Preservation
    • Department of Housing and Urban Development
    • Department of Industry and Commerce
    • Department of Labour
    • Department of Local Government
    • Punjab Pollution Control Board
    • Department of Power
    • Department of Revenue, Rehabilitation and Disaster Management
 

Punjab State Industrial Development Corporation Ltd (PSIDC).

  • It was established in the year 1966 to promote planned industrial development in the organized sector and to speed up industrialization. Today, PSIDC is engaged in the promotion of large and medium scale projects.
  • PSIDC since inception has attained phenomenal growth and some of its objectives are extending of term loan assistance under IDBI Refinance Scheme to projects promoted by private sector and also promotion of industrial and infrastructure projects in the Assisted and Joint Sector.

State Efforts to Facilitate Investments in Punjab

Eco City, New Chandigarh, Mullanpur

Spread over an area of 412 acres, Eco City Phase-I, is the upcoming Ultra modern Township at Mullanpur, New Chandigarh. Quite synonymous to its name, it is surrounded by lush green areas. Total area under development of the scheme is 400 acres and the total project cost of development is Rs. 151 crores, out of which Rs. 50 crores have already been spent on the construction of roads and providing PH, Electrical & Horticulture services etc. Process of acquiring around 450 acres of land for Eco City, Phase-II is under process.

 

Medicity, New Chandigarh, Mullanpur

Located in the vicinity of ECO City, land measuring about 100 acres stands acquired for developing the Medicity. Out of total area, 50 acres has already been allotted for the construction of Tata Cancer Hospital. In phase-II of the scheme land measuring 160 acres would be acquired.

 

Education City, New Chandigarh, Mullanpur

Education City spread over an area of 1700 acres is located at Mullanpur. Land will be made available for setting up schools, colleges and universities offering world class state of the art facilities. The project so completed would offer education facilities in courses like Engineering, Management, Bio tech, Tourism, Hospital, Multimedia, pharmaceuticals etc.

 

Aerocity, Mohali

Land measuring 800 acres (approx.) on both sides of the approach roads of the upcoming International Airport for the development of state of the art aerotropolis comprising institutional/commercial and residential use. Around 5000 residential plots are planned in Aerocity. The total project cost of the development on the right side of the airport road is Rs. 141.30 crores while for the left side total amount earmarked for the development works is Rs. 123.71 crores

 

IT City / Knowledge Park, Mohali

Land measuring around 1700 acres was acquired for development of IT City/ Knowledge Park close to Sector 66, 82 and 101 on Kharar-Mullanpur road. The facility being developed on land worth Rs. 3000.00 crore would offer Industrial, Institutional, Commercial and Residential property.

 

Food Parks/Electronic Cluster

280 acres of industrial land available for Food Parks in Kapurthala, Pathankot, Goindwal Sahib. SAS Nagar (Mohali) has been declared a Brownfield Electronic Cluster (EMC) for benefits under the M-SIPS Scheme by GoI.

Highlight of Industrial Policies in Punjab

Large manufacturing Sector Units

  • Exemption from VAT and CST up to 80% of the Fixed Capital Investment as the maximum cumulative quantum of incentive.
  • The eligibility period of the exemption from 10 to 13 years.
  • Exemption from payment of Electricity Duty on Power up to 100%, including Captive Power consumed by the same unit or exported to PSPCL shall be available to new units.
  • Exemption from payment of Stamp duty on purchase/lease of land up to 100%.
  • Refund of Stamp duty shall be allowed for all real estate which has been purchased/leased up to 3 years prior to the date of submission of application form, by the same entity.
  • Up to 100% exemption from payment of Property Tax.
 

Integrated Textile Units

  • Exemption from VAT and CST up to 90% of the Fixed Capital Investment as the maximum cumulative quantum of incentive.
  • The eligibility period of the exemption from 11 to 13 years.
  • Exemption from payment of Electricity Duty on Power up to 100%, including Captive Power consumed by the same unit or exported to PSPCL shall be available to new units.
  • Exemption from payment of Stamp duty on purchase/lease of land up to 100%.
  • Refund of Stamp duty shall be allowed for all real estate which has been purchased/leased up to 3 years prior to the date of submission of application form, by the same entity.
  • Upto 100% exemption from payment of Property Tax.
  • 50% exemption from payment of Market Fee, Rural Development Fund and Infrastructure Development Cess on the purchase of cotton.
 

Electronics Hardware and IT industry

  • 80% exemption from VAT and CST of the Fixed Capital Investment as the maximum cumulative quantum of incentive.
  • The eligibility period of the exemption is 10 years.
  • Exemption from payment of Electricity Duty on Power, including Captive Power consumed by the same unit or exported to PSPCL shall be available to new units for a period of 10 years.
  • 100% exemption of stamp duty for IT/ITES/Knowledge Units/Developers on all components within the said Park on the sale/ lease / lease-cum-sale of land or built up office space within the constructed IT Park.
  • No stamp duty will be levied in respect of land allotted by Department of Information Technology/any other Development Authority of the State to the units.
  • Refund of Stamp duty shall be allowed for all real estate which has been purchased/leased up to 3 years prior to the date of submission of application form, by the same entity.
  • Exemption from payment of Property Tax for a period of 10 years.
  • The units notified by Department of Information Technology, Government of Punjab will not require any NOC/ Clearance from Punjab Pollution Control Board (PPCB) for release of electricity connection from Punjab State Power Corporation Limited (PSPCL).
  • Exemption from inspections under various Labour Laws.
  • Exemption from the Punjab Apartment and Property Act 1995.
  • Preferential Market access to Electronics hardware manufacturing units in the State for the products procured by all government departments in the State
 

Agro Industrial and Food Processing Sector

  • Exemption from VAT and CST of 80% to 90% of the Fixed Capital Investment as the maximum cumulative quantum of incentive.
  • The eligibility period of the exemption from 10 years.
  • Exemption from payment of Electricity Duty on Power up to 100%, including Captive Power consumed by the same unit or exported to PSPCL shall be available to new units for a period of 10 years.
  • Exemption from payment of Stamp duty on purchase/lease of land.
  • Refund of Stamp duty shall be allowed for all real estate which has been purchased/leased up to 3 years prior to the date of submission of application form, by the same entity.
  • Up to 100% exemption from payment of Property Tax for a period of 10 to 12 years.
  • Subsidy on Domestic distant marketing and export of flowers, fruits & vegetables and import of planting material.
  • Financial assistance of 50% of the cost of patent registration with ceiling of Rs. 5 lacs, 50% of consultation charges for preparation of Project Report.
  • Exemption from Mandi fee and Rural Development fee on purchase of fruits and vegetables from farmers.
 

Tourism Sector

  • Exemption from VAT and CST from 40% to 75% of the Fixed Capital Investment as the maximum cumulative quantum of incentive.
  • The eligibility period of the exemption is 10 years.
  • Exemption from payment of Electricity Duty on Power, including Captive Power consumed by the same unit or exported to PSPCL shall be available to new units up to 10 years.
  • Exemption from stamp duty from 50% to 100% up to 10 years.
  • Refund of Stamp duty shall be allowed for all real estate which has been purchased/leased up to 3 years prior to the date of submission of application form, by the same entity.
  • Exemption from payment of Property Tax for a period of 10 years.
  • Water supply at domestic rates and no conversion charges for Heritage Hotels.
  • 5% extra VAT incentive for Green Hotels.
 

Health Sector

  • Exemption from VAT and CST from 45% to 75% of the Fixed Capital Investment as the maximum cumulative quantum of incentive.
  • The eligibility period of the exemption is 10 years.
  • Exemption from payment of Electricity Duty on Power, including Captive Power consumed by the same unit or exported to PSPCL shall be available to new units up to 10 years.
  • Exemption from stamp duty from 50% to 100% up to 10 years.
  • Refund of Stamp duty shall be allowed for all real estate which has been purchased/leased up to 3 years prior to the date of submission of application form, by the same entity.
  • Exemption from payment of Property Tax for a period of 10 years.
  • No CLU charges for hospitals and Medical Colleges.
 

Punjab Industrial Facilitation Act, 2005

  • Common Application Form (CAF) for obtaining approvals from different departments.
  • Online submission of form to prevent hassles.
  • Deemed approvals, if timeline provided is not met with for granting approvals. ( Annexure 1)
  • Single window clearance system established with 10 departments as members.
  • Designed to cut red tape and provide single stop clearance for all 30 requirements in 10 departments.
  • Standardized mechanism for grievance redressal.
  • Departmental action against officials for unjustified delay in processing of the application.

Focus Sectors in Punjab

Punjab has grown at a rate of 15% per annum in the past decades and is one of the fast growing economies in the region. The focused sectors of the state are:

  • Agro and food processing
  • Skill Development
  • Information technology and ITeS
  • Life Sciences
  • Healthcare
  • Tourism
  • Renewable Energy
  • Manufacturing
  • Aerospace and Defence
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