Topics In Demand
Notification
New

No notification found.

NASSCOM Feedback: Punjab’s Draft Industrial and Business Development Policy, 2022
NASSCOM Feedback: Punjab’s Draft Industrial and Business Development Policy, 2022

October 21, 2022

230

0

We submitted our feedback on state of Punjab’s Draft Industrial and Business Development Policy (Policy). In our submission, we noted the following:

  • In order for the State to grow the presence of IT industry in a significant manner, there is a need for a policy approach which recognises the asset light and talent centric nature of the IT industry. The incentives and infrastructural enablement need to be designed keeping this in perspective. The IT/ITeS industry has the potential to create several high-quality jobs to meet the aspirations of youth in Punjab. The IT and the electronics industry in Punjab had witnessed a significant growth in the financial year 2021-22, attracting investments worth Rs 770 crore.[1]
  • Carving out an IT industry specific chapter or IT industry specific policy: While we appreciate the intent of Punjab government to have an industrial policy and boost the industrial ecosystem in Punjab, we note that the IT industry is significantly different from the manufacturing industry in terms of manpower, power usage, electricity consumed etc., and therefore, we suggest that a separate chapter for IT industry be carved out in the draft Policy. Alternatively, the state of Punjab can consider releasing a separate IT industry policy for the IT/ITeS companies.
  • Incentives to existing units for expansion, diversification and modernisation: We note that Clause 12.2 of the draft Policy specifies that all existing “manufacturing” units undertaking expansion, diversification or modernisation shall be eligible for incentives at par with new units. However, for the “service industry” units, Clause 12.2. states that only new units shall be entitled to the incentives. We note that no rationale has been provided as to why existing service industry units shall not be eligible for incentives similar to existing manufacturing units.
    We suggest that in the absence of any intelligible differentia for extending benefits to existing services units, the eligibility for incentives should be allowed for the service industry including the IT/ITeS companies as well.
     
  • Investment subsidy by way of reimbursement of net SGST on intra-state sales: The draft Policy extends the incentive to reimbursement of 100% of net SGST for 7 years from the date of commercial production with a cap of 100% of FCI. No rationale has been provided as to why this has been limited to intra-state sales.  We note that in the last policy, reimbursement of net SGST was provided on total sales.[2]
    We recommend that in line with the previous policies, this be extended to “total sales” i.e., both inter and intra state sales.
     
  • Anchor unit eligibility criteria: We note that in Clause 12.11.2 of the draft Policy, it has been stated that every month companies shall have to employ minimum 500 employees to be eligible for the categorisation as “anchor units”. This shall translate into employing minimum 6000 direct employees on an annual basis. However, we note that there may be situations where it may not be possible to directly employ 500 employees due to resignation, suspension, lack of talent availability etc. Therefore, it may be feasible to instead allow minimum direct employees to be 6000 every year instead of minimum direct employees to be 500 every month. 

For more information, kindly write to apurva@nasscom.in and tejasvi@nasscom.in.

 

[1] See, Tribune, Boost to Punjab’s IT Sector, private firms commit Rs 770 cr investment in FY22, available at https://www.tribuneindia.com/news/punjab/boost-to-punjabs-it-sector-private-firms-commit-rs-770-cr-investment-in-fy22-404746.

[2] See, Amendments IBDP Net SGST dated 17.10.2018, available at http://investpunjab.gov.in/assets/docs/Amendments_IBDP_Net_SGST_17_10_2018.pdf.


That the contents of third-party articles/blogs published here on the website, and the interpretation of all information in the article/blogs such as data, maps, numbers, opinions etc. displayed in the article/blogs and views or the opinions expressed within the content are solely of the author's; and do not reflect the opinions and beliefs of NASSCOM or its affiliates in any manner. NASSCOM does not take any liability w.r.t. content in any manner and will not be liable in any manner whatsoever for any kind of liability arising out of any act, error or omission. The contents of third-party article/blogs published, are provided solely as convenience; and the presence of these articles/blogs should not, under any circumstances, be considered as an endorsement of the contents by NASSCOM in any manner; and if you chose to access these articles/blogs , you do so at your own risk.


images
Apurva Singh
Senior Policy Associate

Write to me for all things related to FinTech, Drones, Data and Gaming

© Copyright nasscom. All Rights Reserved.