Industrial policy reform – India


In tune with the economic reforms and liberalization by the Government of India the state governments have also taken initiative in giving incentives and relaxation of procedures to encourage investment and growth in their states. In this article we are giving below incentives of some of the states.

Andhra Pradesh

The capital city of Hyderabad is converted with excellent facilities and infrastructure to suit software technology which attracted foreign investments and the city is now nick named as ‘Cyberabad’. The state government also provided tax relief and various other incentives to attract leading software companies. Prestigious international management institutes like Kellog Wharton Business School have also set up their base in the city.


* Several steps taken to simplify procedures and ensure time bound clearances.
* Industrial Assistance Group as a single window service further extended to district level to ensure effective coordination among various government organizations.
* Power to allot, transfer, lease and rent industrial plots/sheds; sanction/disbursement of loans by Haryana Financial Corporation, sanction of electric load up to a certain limit delegated to district level.
* Time bound clearance/sanctions encompassing all aspects-Project Approval (15 days), registration as small unit (1day), NOC ( no objection certificate) by state pollution board (15days), allotment of plots/shed(10days) from receipt of application.
* All sales tax barriers through the state removed.
* High level coordination committee set up to ensure all clearances within the stipulated time. An empowered group (including representatives from various organizations) set up to revamp administration.
* High Powered Committee set up to take spot decisions on foreign investments, NRI projects and 100% export oriented projects.
* A state level grievance committee set up to address problems faced by entrepreneurs.
* Visits of inspectors has been streamlined and rationalized.


* Several steps are proposed/ have been undertaken for attracting more investments and procedural / rules simplification.
* State Industrial Development Committees will be formed for ensuring speedy clearance of applications of new SSI, within prescribed time limit, review and maintenance of good industrial relations and monitoring of Industrial Development activities.
* District development committees to be formed in each district.
* Industrial Relations Committee to be extended to all existing and potential industrial areas.
* A new Green Channel Scheme will be introduced for expediting all clearances and all unnecessary licensing and clearances will be abolished.
* An Industrial Infrastructure Development Authority will be established.
* A special cell will be created to coordinate activities relating to central projects.
* New units will be exempted from all state taxes for the first seven years.
* Investment subsidy will be increased to 15%, with certain ceilings


* A nodal committee constituted at the state government level for clearance of proposals, for providing infrastructural facilities and government assistance, and to recommend measures for rehabilitation of sick industrial units.
* The Foreign Investment Division in the Industrial Promotion and Investment Corporation of Orissa will act as single window for investments by Non-Residents Indians and foreign investors.
* Nodal committees constituted at the district level to resolve local problems faced by entrepreneurs.


* A new package of incentives to attract investments, avoid multiplicity of incentives and procedures, create new job opportunities and speedy clearance of new enterprises announced and made applicable from October 1992.
* A Committee constituted for providing land ‘off the shell’
* Udyog Sahayaka acting as a single window service for clearing projects.
* State government signed MOU with selected industrial units to upgrade Industrial Training Institutes.
* Privatization of public sector units to be undertaken.
* Develop selected industrial corridors as part of infrastructural development. Use private initiative for infrastructure development specially power.
* Procedures for providing credit by State Financial Institutions to be simplified. For promoting exports, foreign bank branches to be set up in Ludhiana.
* The state has initiated the process of formulating a policy to ensure granting of clearances for setting up industries within 24 hours of receipt of request.


* Several steps taken for expanding and strengthening infrastructure, simplifying rules and procedures, ensuring speedy availability of inputs/clearness, increasing role of the private sector, enhancing employment and investment.
* Power generation, telecom services, tourism and setting up hotels in the private sector encouraged
* Enabling legislation to put itself in place to allow private parties to collect tolls from roads / bridges constructed by them.
* Amendments made in rules relating to conversion and allotment of land for industrial purposes.
* 155 SSI exempted from obtaining No Objection Certificate (NOC) from State Pollution Control Boards. Power to grant NOC decentralized.
* Industries to be inspected under Factories Act reduced from 15 to three. Common inspection in accordance with a checklist prepared for the purposes. Even simpler procedure for SSI.

West Bengal

* State, wherever appropriate, welcomes foreign technology and investments.
* State recognizes the importance and the key role of the private sector in accelerating growth.
* An empowered Committee at the State level, under the Chairmanship of the Chief Secretary, to take quick decisions on investment proposals.
* The single Window Agency of the West Bengal Industrial Development Corporation Ltd., strengthened to provide effective ‘Escort Service’ to new projects.
* Committees in each district formed under the Chairmanship of District Magistrates to ensure quick decisions on land, employment and other related matters.
* Private sector investment in power generation encouraged to meet increased demand.

The above measures taken, direct by states has attracted more FDI and high technology companies into India. This has also developed a healthy competition between states resulting in overall benefit of the country as a whole. Every year the central and state governments are coming up with more and more incentives for high technology and Power generation sector.