Gujarat Industrial Policy 2020

On August 7, 2020, the Gujarat State Government launched the “Industrial Policy 2020”. The policy aims to provide Rs 40,000 subsidies to the industries in the state in the next five years.

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The policy will help to lease lands to industrialists and also provide incentives to industrial parks. Under the policy, the Gujarat State Government will appoint dedicated “relationship managers” to host Vibrant Gujarat Summit in January 2021.

The Gujarat Industrial Policy, 2015, came to an end in 2019 and the government had extended it till 2020.

Success of previous Industrial Policy

Gujarat stands first in terms of number of Industrial Entrepreneurship Memorandum (IEM). This is 51% of total IEMs filed in the country. The subsidies being allocated to the current policy is three times as that of the previous policy.

Focus on China

The policy will help industries willing to relocate from China through “Relocation Incentives”. The Gujarat State Government has held joint meetings with countries such as Japan, Germany, USA and UK in this regard.

Key Features of Industrial Policy, 2020

  • The new policy provides an average outlay of Rs 8,000 crores under which incentives are to be provided to the industries in the state.
  • The policy delinks incentives from SGST. Gujarat is the first state to do so under the new policy.
  • The policy provides 12% Fixed Capital Investment (FCI). The State Government will provide 65% of cost of acquiring foreign patented technologies by MSMEs. This will be up to Rs 50 lakhs.
  • In order to encourage MSMEs to use rooftop solar power, the state government will pay 50 paise to every solar unit of solar power bought from MSMEs. Thus, the new purchase price stands at Rs 2.25 per unit.
  • The policy has increased seed support from Rs 20 lakhs to Rs 30 lakhs.
  • It provides incentives to private developers to set up private industrial parks in the state. The incentives will be 25% of Fixed Capital Investment. The upper limit for this has been set to Rs 30 crores.

The policy focuses on 15 different sectors. They have been divided into core sectors that include waste management projects, electric vehicles and green energy.

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