State Policy

The Government of Punjab aims to promote industrial and agricultural growth, create employment opportunities and make Punjab an attractive destination for domestic and foreign investment. Thus, the Government has identified three focus areas:

• Diversify the agriculture base and promote value addition

• Promote the development of industrial clusters to strengthen their competitive position

• Restructure and empower public sector units to maximise their potential value

The State Government's New Industrial Policy (2003) aims to create a conducive investment climate through infrastructure creation, reduced regulation and general facilitation. It also aims to rejuvenate and make the existing industry competitive through improved technology, product quality and marketing.

Key policies

• Diversification of agriculture base and promoting value addition

• Investment in technology through seeds and fertilisers to improve yields

• Adopt contract farming to introduce modern management into agriculture

• Concentrate on post harvest measures to improve crop utilisation efficiency

• "Second Push Programme" - setting up cold chain infrastructure and food processing units to maximise value addition

• Promote development of industrial clusters to strengthen their competitive position

• Development of clusters in areas according to raw material availability and competitive advantage

• Maximise utilisation of Central Government support for development of industrial infrastructure

• Restructure and empower public sector enterprises

• Promote public sector enterprises to attract investment in public-private partnerships

• Utilise public sector enterprises to achieve structural transformation in the economy

• Revival of sick units

Single window clearance

To maximise the potential benefits from wide-scale adoption of IT in the state, the State Government has devised an IT action plan that aims to:

• Provide citizen-centred governance

• Create a global, digitalised economy to attract foreign investment

• Use IT to make local industry cost competitive and sustainable by lowering barriers to entry in the global market

• Provide superior technical education to create a highly qualified labour force

The State Government has already started an Integrated Citizens' Service Project on a pilot basis in Ludhiana. Punjab's IT Policy also provides a range of incentives for IT firms located in the state. These include:

• Investment incentive at 30 per cent of the fixed capital investment

• Exemption from sales tax for a period of 10 years

• Exemption from electricity duty for a period of  5 years 

• Human resources development grant for a period of 5 years

• Exemption from stamp duty and registration fee

• A venture capital fund to support the growth of the IT industry 

e-Governance

Export promotion and facilitation

Public Sector Enterprise (PSE) restructuring and disinvestment

Of the units earmarked for divestment, the largest among them, Punjab Tractors, was divested in 2003. The Government of Punjab sold its 23.49 per cent stake to CDC Capital Partners for US$ 48 million. The divestment process of four other public sector enterprises is currently underway.

These include:

• Punjab Tourism Development Corporation

• Punjab Communication Ltd

• Punjab State Container and Warehousing Development Corporation

• Punjab Alkalies and Chemicals Ltd

The Government of Punjab has been actively pursuing private sector investment to create world-class infrastructure and to upgrade the present infrastructure in the state. Its recent initiatives include:

• Setting up the Punjab Infrastructure Development Board (PIDB) in 1998.This is the nodal agency for facilitating private investment in infrastructure across different sectors - roads & highways, urban infrastructure, industrial infrastructure, electricity, health and education

• Creating a US$ 4.25 million corpus called the Punjab Infrastructure Initiative Fund (PIIF) to finance project development through public private partnership

• Enacting the Punjab Infrastructure Development Act in 2002 and setting up the Punjab
  Infrastructure Regulatory Authority (PIRA). The State Government recognised that to attract private participation, there was a need for an over-arching legislation to secure a level-playing field for private players, and establishing a transparent regulatory framework governed by an autonomous regulator to grant various concessions and incentives to make projects and investment opportunities viable and attractive. The Act provides the necessary legal and policy framework to facilitate private investment in infrastructure projects

• Encouraging existing Small Scale Industries (SSIs) to undertake modernisation and technology upgradation to meet the challenges of the WTO regime. The Government has notified a scheme to provide capital subsidy

• A scheme of freight neutralisation assistance for export units has also been notified, which would neutralise the locational disadvantage of the state to some extent

Punjab announced a state-level Biotech Policy in 2003. The policy aims to ensure availability of trained manpower, develop quality infrastructure and provide special incentives and exemptions to the sector. The state has announced a series of fiscal incentives and a liberal regulatory regime to facilitate the growth of biotech industries in the state.

Punjab has also set up the Punjab Biotechnology Promotion Board (PBPB) and plans to develop infrastructure for R&D, data validation, commercialisation and public awareness in the area of biotechnology.

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