Raipur: Chhattisgarh is ready to emerge as a sliver spot as the cloud of economic recession looms over across the world. The state government has come up with various new policies to fast-track industrialisation and investments in the state in the post Covid-19 situation.
Acknowledging the fact that the pandemic has caused immense damage to the state’s economy and robbed people of their employment, the Bhupesh Baghel-led Congress government in Chhattisgarh has overhauled the state industrial policy to provide attractive incentives to entrepreneurs for setting up businesses.
The chief minister of Chhattisgarh has realised that the state needs a comprehensive recovery package that will first cushion the shock and then help the economy to recover.
The Chhattisgarh government’s farsighted decisions have given a momentum to Industrial development in the state during coronavirus pandemic. Various decisions by the state government such as rebate in electricity rate to industries, assistance through grant, easy and suitable arrangements for getting sanctions and priority to products from local industries have proved to be an elixir for the industrial sector of Chhattisgarh.
Production in Chhattisgarh’s core sector industries continued even when the entire nation’s economic activities were on halt during the lockdown period due to coronavirus. In the last week of April month, production activities had resumed in many other industries other than core sector. Capital investment of Rs 14,983 crore was made by 848 industrial units from January 2020 to June 2020, giving employment to 15,424 individuals.
Fast-track decisions made to address the problems faced by industries
The Chhattisgarh government under the leadership of Chief Minister Bhupesh Baghel took sensible decisions benefitting the industrial sector. During the lockdown period, the chief minister himself interacted one-on-one with representatives of various industries and took immediate decisions for redressal of their problems. Many important decisions related to industrial sector were also taken in the currently organised cabinet meeting. Prescribed limit has been increased by one year for setting up industries on land allotted to industries on lease. Transferring of land was made easier in cases where land on lease has not been used for setting up industries.
An 18-month timeframe was set as an early bird grant for setting up new bio ethanol plant. Earlier, there was a provision of providing early bird grant to industries for starting production within six months of signing an MoU. Now, this period has been extended to 18 months.
Inclusion of small and medium industries along with micro units under long-term capital expenditure grant scheme
In the Industrial Policy 2019-24, a special package has been announced by the State Government for entrepreneurs belonging to SC/ST and startups. The meeting of Council of ministers has approved that those industries established under industrial policy 2019-24 will be eligible for grant discounts and concessions for expansion and embalming. It has also been decided to facilitate permanent capital investment grant to micro, small and medium enterprises.
Priority to micro, small and medium enterprises in government procurements
Micro, small and medium enterprises of the state were givenpriority in government procurements. Marketing portal “e-manak” has been implemented by the state government for the same. GST registration has been made mandatory for bidding firms outside the state for determining rates. So far, goods worth Rs 142 crore have been purchased through e-manak portal. Union Micro, small and medium enterprises ministry, has also acknowledged the Chhattisgarh government’s efforts in promoting micro, small and medium industries. The state has been ranked second at national level in the field of MSME promotion and development.
Chhattisgarh State Processing Mission extends till 31 October 2024
The state government also extended the duration of state processing mission till 31 October 2024for promotion of agro-based rural industries. Under the mission, approval was granted on giving special priority to Forest Rights Act lease holders and community and forest resource empowered villages. In the same manner, fixed water rates were decreased by 20 to 33 per cent for industrial use of ground water. A decision was also taken to take back land ownership from those having cancelled plots and closed units and facilitate allotment of land to new applicants.
Announcement of special package for sponge iron and steel sector industries
Under the new industrial policy, the state government decided to give special investment promotion package for investment in mega ultra-mega project in the field of sponge iron and steel. In the package announced for mega investors, maximum Rs 500 crore investment promotion (Rs 1,000 crore for Bastar division) was allowed. It is mandatory for proposed units to start commercial production on or before October 31, 2024. New units starting commercial production with long term capital investment of Rs 100 crore will be eligible for economic investment promotion. Core sector industries in the state are eligible for subsidy in electricity charges. Subsidy on electricity has given a new lease of life to core sector industries, including steel industry. These industries will get the benefit of access to the entire market. With the announcement of a special package under Bespoke Policy, the region-wise waiver limit for sponge and iron industries has been increased from 60% to 150%. Chhattisgarh produced 27 lakh tonne steel during lockdown period, which was the highest of all the states.
Food parks to be set up in all 146 blocks of the state
For the processing of agricultural and industrial crops, it has been decided by the state government to set up food parks in all 146 blocks of the state. A total of 1346.656 hectare of government land has already been earmarked for setting up of food parks in 101 blocks. In 15 blocks, the ownership of 204.517 hectare of government land has been transferred from revenue department to the commerce department and the basic infrastructure development work has already been started on these lands.
Amendments made in the state industrial policy to attract investment in Chhattisgarh
In order to expedite the industrial development, to achieve the goal of holistic growth and to build a developed economy, amendments have been notified on 21 points in the new industrial policy 2019-20. These amendments mainly include the option of cash benefit and GST credit under subsidy for capital expenditure by small industries. Earlier, only micro industries were eligible for cash benefit. The government has accepted the demands of various industries and decided to give cash or GST credit to small and medium industries as well.
A special industrial investment promotion package has been announced for the entrepreneurs belonging to Scheduled Caste and Scheduled Tribe. Under the new package, the benefit will be more than the previous industrial policies. Similar to new industries, the government will also encourage the expansion of existing industries. Earlier, businesses had to pay the transportation charge while exporting goods from state to different countries. Now, the government will give them grand on the expenses occurred in transportation. The government will give Rs 20 lakh grant under this scheme.
Under the new industrial policy, the MSME has been defined separately by the state and a definition of a broader service industry has also been issued. As per the demands by the investors, the grant-in aid for long-term capital expenditure has been extended to small and medium industries instead of restricting it to the micro industries. The calculation period for long-term expenditure for the expansion of existing units has also been increased. A special package has been announced under the ‘be-spoke policy’ for the promotion of the backbone of the state’s industries, steel sector, mega as well as ultra mega industries. Units having MoUs (Memorandum of Understandings) with the state government will come under this.
Start-up package
Chhattisgarh start-up package has been included in the state’s industrial policy to encourage innovative thinking and job creation. These start-ups will be given additional facilities with less formalities. The state has been declared as the best emerging start-up ecosystem by the Government of India. So far, more than 415 startups from Chhattisgarh have been recognised by the Centre. Four incubators have been established in the state.
New dimension in the industrial development of Chhattisgarh
To ensure industrial development of the state, a new state industrial policy has been implemented from November 1, 2019 till 2024. The industrial sector got the much-needed relief with the state government’s decisions such as priority to products from local industries, rebate in electricity rates, grant, assistance and single window system for acquiring various sanctions. On October 1, 2019, the state government started a new marketing portal (ceps.cg.gov.in) replacing GEM (Government E-marketplace) with an objective to encourage purchase of products manufactured by small industries in government procurement. So far, 31 departments have registered since commencement of the portal and government purchase of over Rs 323.86 crore has been made.
Amendment in Land Purchase Policy has been done with mutual consent under the policy of Department of Commerce and Industry. 30 per cent reduction in land interest for allotment of land in industrial areas has been made. Land rent has been reduced by one percent. Provision has been made for making land allotted up to 10 acres in industrial areas from lease hold to free hold.
Various rules of the Industrial Land and Building Management rule have been simplified and notification for this has been issued. Consent has been given to units located in the industrial areas to get the rest of the unused land back and its allotment to other units. Now, it is no longer necessary to be 100 per cent exporter of unit for availing transportation grant. Industrial department and CSIDC will be providing land premium on allotment of land to entrepreneurs belonging to general category for setting up micro, small and medium industries. The much-awaited land transfer fee was reduced by entrepreneurs. Also, the maximum limit for starting production has also been increased.
Apparel Training and Design Center in Sukma District has been established on 02 March last year to provide employment-oriented training to youths in various fields related to textile industry such as apparel manufacturing technology, production related to super vision, apparel pattern making, quality control, cutting, tailoring, sewing machine operator. 240 youths are provided training facilities every year in this centre.
Gems and Jewellery park to come up in Raipur
The state government has proposed establishment of Gems and Jewellery park on 10 acres of land in Raipur. For the project, 10 acres of land acquired on 11 June 2020. Total proposed cost of the project is estimated to be Rs 350 crore and the project is planned to be completed in the next 3 years.
Chhattisgarh soon to become ethanol producing state
Under the new industrial policy, production of bio fuel, bio ethanol based on paddy and sugarcane, has been included in the highest priority category with an aim to provide appropriate value to agriculture producers at local level. This will help the state in establishing its image as bio ethanol producing state and strengthen the economic position of farmers.
Under the new industrial policy of the state, it will be necessary for enterprises to be set up in the state to have 70 percent in unskilled category and 100 percent in managerial category and 40 per cent employment will be given to local residents of the state. The state government has decided to extend the period of signing MoU for installation of bio ethanol from 6 months to 18 months. Under the new industrial policy, “B spoke policy’, encouragement package has been approved by the state government for setting up of bio ethanol production units.
Chhattisgarh shares first rank with Andhra Pradesh for highest GST collection in the country
GST collection this year in the month of October is 26% more than the GST collection in October month of year 2020. Chhattisgarh has secured first rank in the country in terms of the increase in GST collection. Chhattisgarh is sharing the first rank with Andhra Pradesh. As per the list issued by Union Finance Ministry, GST collection in the state in October 2019 was Rs 1,570 crore, whereas in October 2020, the GST collection has increased to Rs 1,974 crore. GST collection in October, 2020 has increased by Rs 404 crore as compared to October 2019.
494 beneficiaries have been sanctioned loan of Rs 10.14 crore under “Mukhyamantri Yuva Swarojgar Yojana” during financial year 2019-20
Under “Mukhyamantri Yuva Swarojgar Yojana” loan of Rs 10.14 crore has been sanctioned by different banks to 494 beneficiaries during financial year 2019-20 and Rs. 1.73 crore of margin money has been disbursed by the department to the beneficiary. Under the interest relief scheme, 848 industrial units have been given Rs.22.83 crore between January 2020 and June 2020. Simultaneously, Rs.80.13 crore has been given to these industrial units as part of the long-term capital expenditure grant. To provide jobs to the youth under the “Pradhan Mantri Rojgar Srijan Karyakram” Rs 68.28 crore loan has been disbursed by various banks to 1,572 beneficiaries during the financial year 2019-20 and the margin money of Rs. 31.26 crore (as on March 2020) has been paid by the department.
23 MoUs signed for setting up new industries in financial year 2019-20
As per the intention of the state government, the Department of Industries has sought the Expression of Interest (EOI) to invite investment for setting up of new industries. Several investors have already submitted their proposals. Action is underway to set up these plants. In the year 2019-20, a total of MoUs have been executed by 23 units for setting up new industries in the state. In these projects, capital investment of about 8614.76 crore and employment of 16,463 persons have been proposed. After the MoU execution, capital investment of Rs 72.15 crore has already been done by these units so far. The new units mainly include food processing, bio-ethanol production and core sector products.