The Maharashtra government released a draft defence and aerospace policy on Saturday, to attract an investment of $5 billion and create 100,000 jobs over the next five years. The proposed investment is expected in Pune, Nashik, Nagpur, Ahmednagar and Aurangabad.
The government aims to establish Maharashtra as the preferred destination for domestic and aerospace manufacturing, promote indigenous and modernised technological capabilities, developed world class skilled manpower and support MSMEs to be globally competitive. In a bid to cut red tape and remove procedural hurdles, the defence industry will be declared as an essential service under the Maharashtra Essential Services Maintenance Act (ESMA).
Chief Minister Devendra Fadnavis, who was accompanied by Defence Minister Manohar Parrikar and his deputy Subhash Bhamre, said the state government would float a special fund worth Rs 1,000 crore with the involvement of the state run Maharashtra Industrial Development Corporation (MIDC), IDBI, SBI Caps and other financial institutions to provide initial funding to investors. The special fund will provide comfort to investors to kick start their projects considering that defence and aerospace sector projects are highly capital-intensive.
Parrikar said the Centre will also contribute its share to the proposed fund and added that the fund will be a game changer for the defence and aerospace sector to boost the Make In Maharashtra.
The policy proposes to leverage the strategic location and existing maintenance, repair and overhaul (MRO) facility of Nagpur to develop it as a global hub for airlines. The government plans to provide incentives on VAT on service parts at the Nagpur MRO to make it as preferred choice for low-cost carriers.
Further, the indigenous technology and R&D will be promoted and the government will provide need-based support to R&D institutions set up with the approval of the state government. Fiscal and non-fiscal incentives will be provided to investors who set up aerospace and defense related R&D.
Incentives will be provided to units for training cost to develop skilled human resources. Focus will be laid on imparting vocational training and provide support in up-gradation of industrial technology institutes (ITIs).
As far as anchor units are concerned, the state will provide special incentives and other support needed to such units in the form of fiscal and non-fiscal incentives.
Fadnavis said the defence and aerospace policy pays special attention on MSMEs that will form a critical cluster of suppliers to anchor units located in the region. Incentives will be given for their market development, quality certifications and patent registration.
The government will give special support to units established in collaboration with public enterprises of defense sector/units under the Ministry of Defence. Those benefits will be applicable to joint ventures too.
This list of incentives also includes industrial promotion subsidy, exemption in electricity duty, stamp duty, entry tax and local body tax, waiver in VAT and CST.
In order to promote walk to work, all mega and ultra-mega anchor units (those with investments between Rs 500 crore and Rs 1,000 crore-plus) will be allowed to utilise up to 20 per cent of the designated land for residential and commercial purposes.
Moreover, defence and aerospace units will be entitled for relaxation under the Shops & Establishment Act with regard to working hours, work shifts and employment of women. These units will be exempted from maintaining records for attendance and salary. They will also enjoy the option of self-certification and filing of consolidated annual returns under 13 Acts administered by the Labour Department.
Defence and aerospace units will be entitled for relaxation under the Contract Labour Act applicable to special economic zones. These relaxations will be subject to the approval of the state legislature.
The government aims to establish Maharashtra as the preferred destination for domestic and aerospace manufacturing, promote indigenous and modernised technological capabilities, developed world class skilled manpower and support MSMEs to be globally competitive. In a bid to cut red tape and remove procedural hurdles, the defence industry will be declared as an essential service under the Maharashtra Essential Services Maintenance Act (ESMA).
| MAHARASHTRA DEFENCE HUB |
| Draft policy aims to establish Maharashtra as the favoured destination for domestic and aerospace manufacturing |
| Rs 1,000 crore fund to be game changer for the sector |
| Nagpur MRO to be developed as top choice for low-cost carriers |
| Units to get industrial promotion subsidy, exemption in electricity duty, stamp duty, entry tax & local body tax, waiver in VAT, CST |
| Units allowed to use up to 20% of designated land for residential and commercial purposes to promote walk to work |
Parrikar said the Centre will also contribute its share to the proposed fund and added that the fund will be a game changer for the defence and aerospace sector to boost the Make In Maharashtra.
The policy proposes to leverage the strategic location and existing maintenance, repair and overhaul (MRO) facility of Nagpur to develop it as a global hub for airlines. The government plans to provide incentives on VAT on service parts at the Nagpur MRO to make it as preferred choice for low-cost carriers.
Further, the indigenous technology and R&D will be promoted and the government will provide need-based support to R&D institutions set up with the approval of the state government. Fiscal and non-fiscal incentives will be provided to investors who set up aerospace and defense related R&D.
Incentives will be provided to units for training cost to develop skilled human resources. Focus will be laid on imparting vocational training and provide support in up-gradation of industrial technology institutes (ITIs).
As far as anchor units are concerned, the state will provide special incentives and other support needed to such units in the form of fiscal and non-fiscal incentives.
Fadnavis said the defence and aerospace policy pays special attention on MSMEs that will form a critical cluster of suppliers to anchor units located in the region. Incentives will be given for their market development, quality certifications and patent registration.
The government will give special support to units established in collaboration with public enterprises of defense sector/units under the Ministry of Defence. Those benefits will be applicable to joint ventures too.
This list of incentives also includes industrial promotion subsidy, exemption in electricity duty, stamp duty, entry tax and local body tax, waiver in VAT and CST.
In order to promote walk to work, all mega and ultra-mega anchor units (those with investments between Rs 500 crore and Rs 1,000 crore-plus) will be allowed to utilise up to 20 per cent of the designated land for residential and commercial purposes.
Moreover, defence and aerospace units will be entitled for relaxation under the Shops & Establishment Act with regard to working hours, work shifts and employment of women. These units will be exempted from maintaining records for attendance and salary. They will also enjoy the option of self-certification and filing of consolidated annual returns under 13 Acts administered by the Labour Department.
Defence and aerospace units will be entitled for relaxation under the Contract Labour Act applicable to special economic zones. These relaxations will be subject to the approval of the state legislature.