In a bid to attract investments, the Punjab government today announced a new industrial policy, offering tax incentives for manufacturing, agriculture, food processing and IT and electronics hardware sectors, assuring faster clearance to the projects. 

The SAD-BJP led state government also announced creating a land bank of 5,000 hectares to accommodate new projects and industry expansion across the state. 

"Our policy is the most industry friendly policy in the country... Incentives are being offered (for fresh investments and expansion) and single window system will be set up (for faster implementation of projects)," Punjab Deputy Chief Minister Sukhbir Singh Badal said here today. 

The government has divided the state into two zones wherein the maximum fiscal incentives are offered to areas falling in zone-I including Fazilka, Ferozepur, Hoshiarpur, Gurdaspur and Tarn Taran Amritsar to speed up industrial development in these least developed areas. 

With fiscal incentives being offered for 7-13 years, depending upon the scale of investments, the state has announced to offer exemption of VAT from minimum of 50 per cent to maximum of 80 per cent for new manufacturing including textiles and agro and food processing sectors. 

For electronics, hardware and IT sectors, the level of tax exemption goes up to 100 per cent. 

Besides, there will be 100 per cent exemption from payment of stamp duty, electricity duty and property tax and 75 per cent in payment of Central Sales Tax (CST). 

In case of Zone-II comprising Ludhiana, Moga, Patiala, Mohali and Jalandhar, the quantum of incentives has been restricted to maximum of 40 per cent in VAT exemption and 50 per cent in CST exemption. 

Moreover, there will be 50 per cent exemption in payment of stamp duty, electricity duty and property tax. 

Different slabs of investments including Rs 1-10 crore (SME sector), Rs 10-25 crore and Rs 25-100 crore, Rs 100-500 crore and more than Rs 500 crore have been set up to claim tax incentives, Punjab Principal Secretary Industry Karan Avtar Singh said. 

"(Under the policy)...you earn your incentives... Rather than depositing say VAT, you can retain the VAT (up to the exemption level) for setting up a factory here," explained Badal. 

Laying special focus on agro and food processing sector in line with state's ambitious crop diversification programme, the new policy will offer tax incentives of up to 90 per cent of VAT irrespective of the zone, besides 100 per cent exemption in electricity duty, stamp duty and property tax. 

"Our focus will be on agro and food processing sector... we will encourage investments in processing of maize, basmati, wheat and milk. Purchase tax exemption on wheat and milk purchased and processed within the state will be there," said Singh. (Economic Times)