Industrial Policy of Telangana

The vision for industrialization of the State is “Research to Innovation; Innovation to Industry; Industry to Prosperity”. The industrial policy framework is driven by the goal of “In Telangana-Innovate, Incubate, Incorporate”. The policy framework intends to provide a business regulatory environment for ease of doing business in the State.

Industrial Policy, 2015: Telangana is the first State in India to bestow on investors the right to get clearance for their projects within a set time-limit. It also makes the State liable for penal action if it fails to respond to investment proposals within the timeframe. All the mega projects (over Rs. 200 crore) will get clearance in 15 days, while the other projects will be approved in a month. There is also a provision of automatic approval system on submission of a self-certification.

Telangana State Industrial Project Approval and Self Certification System (TS-IPASS) Act, 2014: The “Telangana State Industrial Project Approval and Self Certification System (TS-iPASS) Act, 2014” was enacted to create investor friendly environment by repealing the AP Industrial Single Window Clearance Act, 2002. It provides speedy processing of applications for issue of various clearances at a single point. TS-iPASS is forward-looking and a model legislation in the country as it provides novel provisions such as automatic approval system on submission of self-certification by entrepreneurs.

• A single Common Application Form (CAF) for all departmental approvals
• All departments connected for establishing and operation of an Enterprise brought under purview of TS-iPASS
• Time limit set for each approval varying from 1 day to a maximum of 30 days depending upon the complexity of the approval.
• Pre-scrutiny of the applications at state level and district level to assist the entrepreneurs in proper submission of applications and to avoid delay in processing the files by the departments.
• Making mandatory for the competent authorities to seek shortfall/additional information required, if any, only once within three days from receipt of the application.
• Providing deemed approvals, in case of failure of according approvals by departments, within the set time limits.
• Empowering the entrepreneurs with right to clearances under TS-iPASS, to know the reasons for delay, if any, in getting the clearance within time limits and penalising the officers responsible for the delay.
• Provision for automatic approval system on submission of a self-certification.
• Providing all approvals within 15 days to mega projects by “Telangana State-Wide Investment Facilitation (T-SWIFT)” Board under the chairmanship of the Chief Secretary to Government, to enable implementation of the project swiftly.
• Proposals for setting up of 1,545 units were approved with an investment of Rs. 31,452 crore by end of January, 2016. The estimated employment generated from these units are 1.12 lakh.

Industrial Infrastructure Development Fund (IIDF) Scheme: Infrastructure like roads, power and water will be provided to the industry for standalone units by contributing 50 percent of the cost of infrastructure from IIDF with a ceiling of Rs.1.00 crore, subjected to location not extending 10 kms., from the existing Industrial Estates/IDAs having vacant land/shed for allotment and cost of the infrastructure limited to 15% of the eligible fixed capital investment made in the industry.

Incentives for setting up of new Industrial Enterprises
Apart from providing a business-friendly environment through above mentioned policy frameworks, Government of Telangana started various incentives for encouraging establishments of new industrial enterprises catering to the needs of different sections of society such as, T-IDEA scheme, special incentives for first generation entrepreneurs and women entrepreneurs, and T-PRIDE for developing entrepreneurship among SCs, STs, etc.

T-IDEA Scheme
A new industrial incentive scheme called Telangana State Industrial Development and Entrepreneur Advancement (T-IDEA) was launched to extend various incentives for setting up of new enterprises in the State. Incentives given to various enterprises to be set up under this scheme are given below:
Incentives given to micro, small and medium enterprises (MSME) are discussed in the MSME section.

Incentives to Medium and Large Enterprises: Major incentives being offered to medium and large enterprises are:

• 100 percent reimbursement of Stamp duty on purchase of land or lease of land/shed/ buildings,
• 25 percent rebate in land cost (limited to Rs.10 lakh),
• fixed power cost at @ Rs. 1 per unit for 5 years,
• reimbursement of 75 percent net VAT/CST or State Goods and Services Tax (SGST) for medium enterprises and 50 percent for large scale enterprises for a period of 7 years,
• 25% subsidy on specific cleaner production measures limited to Rs.5 lakh,
• provision of infrastructural facilities such as roads, power and water at door step for standalone units by contributing 50% of the cost of infrastructure from IIDF with a ceiling of Rs.1 crore, provided that the location should be beyond 10 kms from the existing Industrial Estates and cost of the infrastructure limited to 15% of the eligible fixed capital investment made in the industry.