NEW DELHI, MAY 4:Going all out to woo investment, Arunachal Pradesh has drawn up a new industrial policy to grant land leases for 99 years to investors as against the current ceiling of 30 years.

With a slew of measures including relaxations, exemptions and subsidies in its new industrial policy, the country’s frontier state in the east hopes to dump the dubious distinction of the state with the least number of registered manufacturing units.

The state government also plans to allow 100 per cent equity ownership of an industrial unit to any entrepreneur. The current practice is that an investor from outside the state has to take a trading licence in the name of a resident of Arunachal Pradesh to set up any enterprise.

“We are set to bring in these changes through a new industrial policy which will come into force in a month’s time,” said Arunachal Pradesh Chief Minister Dorjee Khandu.

“Industries haven’t come to our state for many years now, and one of the main reasons why they don’t want to come is that they feel their investments cannot be recovered in a 30-year period. By increasing the lease period from 30 to 99 years, we are trying to inspire confidence in them. Other exemptions and subsidies are also being introduced to make the atmosphere more conducive for potential investors,” he said.

The Arunachal Pradesh government also plans to grant 99 per cent exemption from Value Added Tax (VAT) to industries. “This exemption will apply to both the entry of actual raw materials, plants and machineries and sale of finished products in the local market for a seven-year period from the date of commercial production,” said a senior state government official.

In addition, basic requirements like getting a regular electricity connection from the government’s power grid or wanting to set up a captive power generation plant will entitle investors to get subsidies worth 50 per cent on the equipment cost or Rs 10 lakh, whichever is less.

Further, investors having a Detailed Project Report (DPR) sanctioned from either a bank or other financial institutions for their projects will get a government subsidy on the cost incurred on getting the DPR prepared.

To enhance comfort levels of potential investors, the state government also plans to give preference to industries located within its borders while making procurements for its departments. “Government departments and other organisations will give preference to products manufactured within the state while procuring. Further, the state will give a price preference worth 7.5 per cent to its own industries when it comes to procuring products for government departments through a tendering process. Simply put, bids made by local industries will straightaway get a 7.5 per cent reduction in comparison to those made by players from outside,” said the official.

The state government plans to introduce a “Local Employment Promotion Grant” for footing a part of the wage bill of an investor who employs a certain minimum number of locals.

After setting up a single-window clearance facility at all levels, the state is set to offer special incentives for food processing industries, large and heavy industries and those to be set up through Foreign Direct Investments.

Arunachal Pradesh hopes to attract investors to set up industries based on agricultural, horticultural and plantation produce, bamboo, medicinal plants, tea and coffee, handlooms, handicrafts, minerals, electronics and IT.

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