Post-Covid fillip: GST refund for longer periods central to UP’s new industrial policy.
GST: In a bid to give a fillip to the state’s economy and provide employment to migrant workforce that has returned in the wake of Covid-19 lockdown, the Uttar Pradesh cabinet has announced an accelerated investment promotion policy for the backward regions of Purvanchal (eastern UP), Madhyanchal (central UP) and Bundelkhand.
The policy, which aims to accelerate the pace of industrialisation in these regions, would provide attractive incentives to industrial units for creating growth centres in these areas on a fast-track mode.
According to the policy, those setting up industries under this scheme in Madhyanchal would be eligible for 70% reimbursement of net state goods and services tax (SGST) for 12 years subject to 200% of capital investment made during the policy period. Units set up in Purvanchal and Bundelkhand would be eligible for 70% reimbursement of net SGST for 15 years subject to 300% of capital investment made during the policy period.
Currently, the industrial investment and employment promotion policy-2017 provides for a net SGST reimbursement of 70% to eligible industrial units for 10 years only.
Speaking to FE, Additional chief secretary, infrastructure and industrial development department, Alok Kumar said the policy will be applicable to new investors who apply under it within six months of its notification. “Even existing units can take advantage of this policy, provided they scale up their investment as per provisions of the policy and 80% of their investment is made after the notification date,” he said, adding that industrial undertakings investing in expansion or diversification of existing units will not be eligible.
Stating that the objective of the policy was to fast-track industrialisation and investments in the state in the post Covid-19 situation, he said that the eligible mega and mega plus category of industrial undertakings will have to initiate commercial production within 30 months and super mega categories within 42 months from the notification date of this policy. “Generally, mega and mega plus units commence production in 60 months or five years while super-mega units take 7 years or 84 months. We have halved the timeline in this policy,” he said.
Acknowledging the fact that the pandemic has caused immense damage to the state’s economy and robbed people of their employment, Kumar said that UP has seen the worst reverse migration, with over 35 lakh people returning back to the state. “This is an opportunity for the state, both to create new growth centres in backward areas, which would have a huge trickle-down effect and also create large-scale employment for the migrants locally,” he said.