State’s industrial policy draft grants special status to Vidarbha

Nagpur: With elections closing in, the state’s draft industrial policy for 2019 brings a major fillip for Vidarbha granting it a special status among rest of the less industrialised areas of the state.
The draft policy document has eased the criterion for considering a unit as medium enterprise. The earlier policy categorized any unit with a fixed capital investment of Rs10 crore as a medium unit. The limit has been hiked to Rs50 crore.

The document which had gone viral on social media on Wednesday also has a pro-Vidarbha tilt. The region has been classified as a special zone for calculating the incentives payable for the units here.

The benefits under PSI are capped at a certain percentage of the fixed capital investment in a unit. Even as the percentage has been decreased throughout the state, it has been retained at 80% for units in Vidarbha and Marathwada regions apart from Ratnagiri, Sindhudurg and Dhule districts.

Areas are classified as zones from A to D+ for allowing the incentive. Earlier, Vidarbha came under D+ category. The new policy has reduced the percentage of incentives available for industries in D+ areas to 60%, except for units in Vidarbha and Marathwada regions giving the regions apart from Ratnagiri, Sindhudurg and Dhule districts a special status.

Chartered accountant and industrial consultant Julfesh Shah said, “Close to 100 units in Nagpur will now come under the definition of medium units. Under the policy, micro, small and medium enterprises (MSMEs) will get refund of the gross liability towards state goods and services tax (SGST).”

This means even the input tax credit (ITC), which can be adjusted against the final liability, will be considered for calculating the refund amount. Large units are only eligible for refund on net liability, which means the amount after deducting ITC. Now, with the hike in capital investment limit, industries which were earlier large units would become medium units for the purpose of calculating incentives and get the benefit on gross tax liability, he said.

Shah said this will make good the loss on account of discontinuation of refunds paid on central sales tax liability in the pre-GST regime.

The policy has also increased investment threshold for classifying an industry as mega or ultra-mega unit. As against an earlier minimum capital investment of Rs250 crore or 500 jobs created to get mega or ultra mega status in Vidarbha, the threshold has been hiked to Rs350 crore or 500 jobs. Earlier, in Naxalite-hit areas the limit was investment of Rs100 crore or 250 jobs, which has now been hiked to Rs200 crore or 350 jobs.

“This is an indication that there has been industrial growth in the region during previous years considering which the threshold limit has been hiked,” said a source.

Atul Pandey of Vidarbha Industries Association (VIA) said, “Increasing the limit of investment to Rs50 crore for calculating the incentives is the biggest benefit. The industrialists are also enthused with the move on providing equity to start-ups and setting up of state-level export development agencies.”

The scheme includes chief minister employment generation programme aimed at motiviating local youth by providng easy access to bank finance. The policy targets promoting one lakh micro units and creating 10 lakh job opportunities.