Gujarat Launches New Industrial Policy 2020

  • 11 Aug 2020

  • On 7th August 2020, the Gujarat government has announced the new Industrial Policy 2020 for the State, with an average annual outlay of up to Rs 8,000 crore.
  • 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.
  • The state will provide Rs 5 crore for setting up research and development (R&D) or product development centres.
  • The new Industrial policy is divided in 15 thrust areas in core sectors and sunrise sectors.
    • Core Sectors- the thrust areas will be Electrical machinery & equipment, Industrial Machinery & equipment, Auto & Auto Components, Ceramics, Technical Textiles, Agro & Food Processing, Pharmaceuticals & Medical devices, Gems & Jewelry and Chemicals. 
    • Sunrise Sectors - will have thrust areas like 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.

Highlights

  • Long-term Lease of Land:Industries will now be able to get government land for projects on long-term lease up to 50 years (further extendable as per prevailing policy) to industrial enterprises at 6 per cent of the market rate.
  • Mortgage of Land: The industries will be able to mortgage the land.
  • Capital Subsidy and Tax Incentives: The policy offers capital subsidy and tax incentives to industrial units:
    • In a first, the state has taken a decision to de-link incentives from the State Goods and Services Tax (SGST), with up to 12 per cent of fixed capital investment to be given to large industries for setting up manufacturing operations in Gujarat in the form of capital subsidy.
    • Gujarat government will provide special incentives to companies planning to relocate their operations from abroad to the State.
    • Industries will continue to get exemption from electricity duty for five years.
    • Seed capital for start-ups has been increased from Rs 10 lakh to Rs 30 lakh.
  • Ease of Doing Business: Permissions to start new units will be granted smoothly. To further strengthen the ease of doing business in the state, a framework for `Mega Permission' is being prepared, which requires investors to submit one application form for 26 different approvals. 

The policy lays much stress on the MSMEs

  • The new policy enables MSMEs to source foreign technologies with up to 65 per cent 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 per cent 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.
  • While the State is preparing a separate Services Sector Policy, the New Gujarat Industrial Policy 2020 offers interest subsidy of up to 7 per cent 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.