Telangana's new industrial policy to ensure right to timely clearances

HYDERABAD: The Telangana government has announced a new industrial policy, claiming it to be the world’s first to ensure the right to timely clearances through legislation and holding officials responsible for delays.

The policy prescribes a single common application form for all clearances to be accorded by a nodal agency within 15 days for mega projects akin to the Singapore Economic Development Board.

The policy encourages industrial applicants to seek self certification but makes them liable for penal action in case of fraud.

Chief minister K. Chandrasekhar Rao unveiled the industrial policy in the state assembly on Wednesday, pitting against that of rival and Andhra Pradesh chief minister N Chandrababu Naidu’s single-window clearance system of granting approvals within a week.

Rao promised minimum inspection and maximum facilitation, apart from pledging robust industrial infrastructure along with dedicated power distribution to counter Naidu, regarded as an investor-friendly politician, on the industrial investment front. Rao said at least 20 lakh acres of land has been earmarked for industrial parks, promising at least two for each district. Telangana has 10 districts, including Hyderabad.

The assembly unanimously passed the Telangana State Industrial Project Approval and Self Certification System, or TSiPASS, Bill, which identifies 14 thrust areas including life sciences, defence, aerospace, IT hardware, automobiles, food processing and engineering and capital goods.

Rao has promised tailor-made incentives to mega industrial projects with an investment of at least Rs 200 crore employing a minimum 1,000 persons, in addition to the standard large category industry incentives. The standard incentives include reimbursement of stamp duty, value added tax, power and skill development costs, and subsidies for costs including interest, land, land conversion and infrastructure development.

The Telangana government also proposes sector-specific incentives through separate orders from time to time aimed at retaining existing investments and attracting large fresh ones.

Referring indirectly to the tax incentives and special category benefits likely in neighbouring Andhra Pradesh, the Telangana government said it would focus on rationalisation of taxes since distortions could lead to loss of revenue. Accordingly, it proposes to introduce inter-state tax rationalisation on industrial inputs and outputs with neighbouring states.

Taking a cue from the NDA government at the Centre, the Telangana Rashtra Samithi-led state government also proposes to scrap obsolete and draconian laws affecting industry. Rao told the house that the government will review laws and rules as part of this exercise.

Apart from setting up new industrial cities for pharmaceuticals and chemicals, the state government also proposes to develop six large industrial corridors connecting Warangal, Nagpur, Bengaluru, Mancherial, Nalgonda and Khammam. It has promised to prepare detailed master plans shortly for each of these corridors to be developed in two phases.