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Andhra Pradesh's Automobile Industry Policy made more attractive Print E-mail
Written by Vijay   
Wednesday, 05 November 2008
HYDERABAD: The Chief Minister Dr Y S Rajasekhara Reddy, last month, decided to extend all incentives to the automobile industries as being extended by Tamil Nadu under the ultra mega integrated automobile policy to attract Automobile industries to Andhra Pradesh. This was decided at the 49th State Investment Promotion Board meeting chaired by the Chief Minister at Secretariat.

The incentives are for Automobile projects, either New/Expansion that will have Engine plant, Press shop, Body shop, Transmission line, Assembly line, Paint shop etc. either on its own or in consortium/Joint venture mode in the same location with an investment of  not less than Rs. 4000 crores to be made in 7 years from the date of MoU with the Govt. or any other date specified by the Govt.  Allocation of land on case to case basis on concessional price.  100% exemption of Stamp Duty  Power supply with dual feeder line duly meeting the cost by the State Govt.  Exemption from Electricity tax for 10 years for both State generated power and Captive Power.

Refund of Gross output Value Added Tax (VAT) and CST (without any set off) for 21 years or up to 115% of eligible Investment (made in 7 years) whichever is earlier, subject to fulfilling minimum limit of  Rs. 4000 crores.

Exemption from entry tax, VAT on capital goods, works contract tax, octroi ( if any) and other State levies. Wherever exemption cannot be given, it will be replaced by tax refund. Capital subsidy of  Rs. 100 lakhs

The policy also allows Industries located in Govt. promoted Industrial Parks will entitle up to 150% of the normal capital subsidy. One time reimbursement of patent registration up to Rs.50% of expenses or Rs. 1.00 lakh (whichever is lower) to production units.  Critical Infrastructure subsidy of 25%  of Capital cost or Rs.25 lakhs (whichever is lower) for setting up effluent treatment plants/ waste disposal sites.

As far as investment grounded (Up to July 2008) in Andhra Pradesh is concerned, it is Rs.17,581 crores (Rs.14,134 crores in Large and medium and Rs. 3,447 in micro and small industries) during 2004-08 compared to a toral of only Rs.5,391 ccrores (Rs. 4,366 in large and medium and Rs.1,025 in micro & small) during 2000-04.

The employment generated during 2004-08 is 2,17,786 (1,53,791 in micro & small sectors and 63,995 in large and medium industries) compared to only 1,27,922 (90,886 in micro & small industries and 37,036 in large & medium industries) during 2000-04.  The number of units show that during 2004-08 10101 industries ( 9,603 micro & small industries and 498 large & medium industries) were established compared to only 7,233 industries (6,950 micro & small industries and 283 large and medium industries) during 2000-04.

The meeting also discussed the Project Proposals of M/s. NSL Cotton Corporation for establishing modern cotton ginning mills at 38 locations in the State besides that of M/s Sentini Bio Products (P) Limited for producing Grain alcohol at Gandepalli(V), Kanchikacherla (M), Krishna District; M/s ITC Limited for producing Paper at Nellipaka Aswapuram (M), Khammam District; M/s Hinduja Foundaries Limited for establishing Foundry at Muppireddypalli(V), Toopran(M), Medak District; M/s Sri Rayalaseema Alkalies & Allied Chemicals Limited (Expansion) for producing Caustic Soda and Hydrochloric acid & Potassium Carbonate at Kunrool District; M/s DPM Textiles Ltd(Expn) for establishing Spinning Mills at Edlapadu(V), Guntur District and M/s JSW Aluminum Ltd., for producing Alumina at S.Kota(M), Vizianagaram District.

The Chief Minister agreed to provide 50% VAT reimbursement from the commencement of operation of each unit of the above industries as an additional incentive instead of 25% besides all other incentives under the industrial and investment policy including power subsidy. However additional subsidies to JSW Aluminium Ltd will be linked to their producing Aluminium as per the Memorandum of Agreement.

Minister for Finance, K Rosaiah, Minister for Industries Geeta Reddy, Minister for Revenue, D Prasada Rao, Minister for Health Sambhani Chandrasekhar, Minister for Marketing Mareppa, Minister for Energy, Shabbir Ali, Special Chief Secretary, Energy, A K Goel, Principal Secretary, Industries, Sam Bob, Commissioner, Industries, N K Prasad, Commissioner, Commercial Taxes, Ranjana Acharya, Commissioner, Excise, Samariya, MD, APIIC, B.P.Acharya, Principal Secretary, (R&B), T Chaatterjee, Principal Secretary, Finance, I V R Krishna Rao, Principal Secretary, Revenue, Sudhir, Principal Secretary, Finance, Ramesh Kumar and other officials attended the meeting.

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