Guidelines for semi-conductor policy

With the intent to place India on the global semiconductor map, the Government has framed certain guidelines, by attracting investments worth billions of dollars. The Appraisal Committee has mandated that interested investors submit a proposal before it, along with a feasibility report and a Rs.25 lakh nonrefundable application fee.

This application should be further submitted along with a report of the annual audited accountants as adopted by the board of directors and a certificate from the auditors of the company with regard to the datewise expenditure on items applicable under the scheme. The investment made before the date of the receipt of the application, and made more than six months prior to the date of the receipt of the application will not be treated for calculation of capital expenditure.

Only technologically sound projects will be eligible under the special incentive package scheme with certain terms like fab unit, ecosystem unit, state-of-the-art technology and capital expenditure being highlighted. As per the policy, the Centre will bear 20 per cent of the capital expenditure in the first 10 years for a unit located in a special economic zone (SEZ), and 25 per cent in other cases. The countervailing duty (CVD) on capital goods will be exempted in case of units outside the SEZs and the threshold net present value (NPV) of investments has been determined at Rs.2,500 crore within the SEZ and Rs.1,000 crore for other products.

LCDs, plasmas, storage devices, solar cells, photo-voltaics and nanotechnology products, along with their testing, falls under the policy.

Coal Ministry formulates new fuel supply & transport agreement

The Coal Ministry has formulated a new fuel supply and transport agreement (FSTA) to ensure supply of required coal quantity and quality in a time-bound manner. The FSTA is being drafted by the Coal Ministry along the directions of the energy co-ordination committee headed by Prime Minister, Dr. Manmohan Singh.

The FSTA will be a tripartite agreement between the Coal Ministry, consumers and the railways unlike the current fuel supply agreement, wherein, the coal companies enter into an arrangement with the consumers in some cases and the consumers enter into a fuel transport agreement (FTA) with the railways. NTPC and Coal India have given in-principle approval to the new FSTA.

Tamil Nadu cabinet approves new industrial policy

On 27 September 2007, Tamil Nadu Cabinet approved the new industrial policy.

It is also decided to allocate land through the state-owned Elcot in tier-II cities of Madurai, Salem, Tiruchirappalli and Tirunelveli to leading IT firms including HCL Technologies, Honeywell International India Service, Satyam Computers, Southerland Global Services; for providing IT and ITEs services.

It is also decided to allocate land on a 90-year lease based tender to Sify, Southerland Global Services, Cognizant Technology Solutions and Scope International in the Elcot IT Park in suburban Sholinganallur.

Government unveils petrochemical policy

The Government has unveiled a new National Policy on Petrochemicals that envisages an investment of around Rs.36,000 crore in the petrochemical sector for the next five years.

This investment is expected to increase the ethylene capacity from the current level of 2.7 mln tpa to 6.9 mln tpa. The petrochemical policy aims to increase investments in the sector, both upstream and downstream, and capture a slice of resurgent Asian demand in polymers. It also aims at downstream processing through additions in capacity and production, by ensuring availability of raw materials at internationally competitive prices

The policy looks at increasing the domestic demand and consumption of plastics and synthetic fibres, and the use of petrochemicals in thrust areas. According to estimates, the existing per capita domestic polymer consumption of 4.7 kg is likely to be enhanced to 12 kg, compared to the existing world average per capital consumption of 25 kg.

The Government also expects the policy to remove structural constraints and achieve environmentally sustainable growth in the sector through innovative methods of plastic waste management, recycling and development of biodegradable plastics. Currently, the upstream petrochemical manufacturers have commissioned globally competitive plants with imported high-tech technology. On the other hand, the downstream plastic processing industry in the country is highly fragmented and consists of tiny, small and medium units.

Single-window clearance for IT hardware manufacturers

The government is considering a proposal to allow single window clearance at the Centre, state and municipal level, for electronics and IT hardware manufacturers.

Initially the government proposes to allow single window clearance for all types of approvals required at the level of the Central government, and the states will be persuaded to follow suit. The proposal initiated by Department of Information Technology (DIT) on promoting growth of electronics and IT hardware industries, has received strong support from the task force . It includes procedural simplification for setting up a unit, approval based on self declaration, import and export facilitation and infrastructure support for the sector. The government had taken similar initiatives for chip manufacturers wherein, it had allowed tax concessions also to the manufacturers of semiconductors apart from facilitating their ventures by way of procedural simplifications.

The single window clearance is also likely to be extended to the IT hardware manufacturing units set up in the proposed special investment regions (SIRs).