The Gujarat government has announced the Industrial Policy 2020 for the state, with an expected average annual outlay of up to Rs 8,000 crore.
The Gujarat Industrial Policy 2020 has been formed to further consolidate the growth momentum that the state has achieved over the past few years, and enhance the current growth rate.
The policy stresses on bringing investments for job creation, value-addition, adoption of state-of-the-art technology, increasing productivity with Industry 4.0 manufacturing, and creating an innovation-driven ecosystem.
Industries will now be able to get government land for projects on long-term lease up to 50 years and further extendable as per prevailing policy to industrial enterprises at six percent of the market rate. The industries will now be able to mortgage the land.
To capitalise on the global pandemic situation, the Gujarat government will provide special incentives to companies planning to relocate their operations from abroad to the state. The policy provides capital subsidy and tax incentives to units.
In a first, the state government took a decision to delink incentives from SGST, with up to 12 percent of fixed capital investment to be given to large industries for setting up manufacturing operations in the state in the form of capital subsidy.
However, the new policy is silent on large infrastructure and key industries as part of the port-led development of the state, including LNG, petrochemicals, chemicals, iron and steel, and cement; while it lays much stress on MSMEs.
The new policy enables MSMEs to source foreign technologies with up to 65 percent of the total cost of technology acquisition being supported by government with a ceiling of Rs 50 lakh.
The MSMEs will also be eligible for capital subsidy of up to 25 percent of the eligible loan amount up to Rs 35 lakh, while they will be encouraged to install solar rooftop projects on the units with higher tariff for the solar power generated at Rs 2.25 per unit against Rs 1.75.
The state government is also preparing a separate Services Sector Policy.
The Gujarat Industrial Policy 2020 offers interest subsidy of up to seven percent up to Rs 35 lakh per annum for seven years to service sector MSMEs in areas of financial services, healthcare, audio-visual, and environmental services, among others.