State Policy

The state policy aims to facilitate the creation of foreign and local ventures through investor friendly and transparent decision-making processes, harmonious industry relations and attractive incentive packages. The state is keen to consolidate its existing manufacturing strength and tap the business opportunities emerging in the IT/ITES and biotech sectors.

The objectives of the policy framework are:

• To achive a growth rate of 8 per cent during the Tenth Plan (2002-07)

• To encourage new manufacturing capacity based on improved competitiveness, thereby promoting foreign direct investment towards the manufacturing sector

• To consolidate the existing industrial base and promote their growth

• To increase focus on infrastructure construction by establishing strategic public-private partnerships

The state has sought private participation in the infrastructure sector. An 'Infrastructure Fund' has been set up in order to facilitate public-private partnerships in this sector. The fund has been endowed with an initial corpus of US$ 4.1 million and will finance a number of infrastructure development initiatives.

Investment Climate: Reaching out by facilitating business

The state has taken a number of measures to enhance its image as a favourable destination for investment. Various steps have been taken to ease entry of investors in the state. Some of the steps taken are:

• Tailor made packages for investment over US$ 62 million in fixed assets

• Exemption on entry and sales tax on imports of manufacturing units

• Capital subsidies and exemption in Electricity Tax to companies investing in fixed assets. Subsidies increased to 150 per cent for new industrial units located in government industrial parks

• Incentives for patent registration through a one-time reimbursement for the process

• Infrastructure subsidy, particularly to attract investment in water treatment

Source: KPMG analysis

The Government of Tamil Nadu has established single window system to accord all pre-project clearances at the state level. The investor is merely required to file an application to a ‘guidance’ unit that subsequently secures state approvals from various agencies. The single window system is two-tiered with:

• State Level Investment Promotion Board (SIPB) to monitor and expedite all mega projects exceeding investment of US$ 20.5 million

• Project Approvals Authority (PAA) to monitor the projects with investment less than US$ 20.5 million

e-Governance

A 'Special Working Group' (SWG) on e-Governance, under Tamil Nadu Information Technology Council (TNITC) has been set up to streamline government functioning. Transparency is to be sought by linking government databases to public domains. A legislation has been introduced to make inter-operability between governments mandatory. Biotech Policy. A number of measures have been undertaken to attract investment in these areas:

IT Policy

The Government of Tamil Nadu is keen to tap the opportunities in IT/ITES. Tamil Nadu is one of the first states in the country to bring out an ITES and Biotech Policy. A number of measures have been undertaken to attract investment in these areas:

• Destination of Choice Fund’ to highlight the advantages of investing in these sectors

• Relaxation of the Floor Space Index regulation for IT parks

• 50 per cent exemption on stamp duty and the registration fee for purchase of land/building

• A scheme of cash per job created for ITES companies

Biotech Policy

Biotechnology is also an emerging sector in the state. The Government has envisioned the creation of Biotechnology Enterprise Zones (Bio-Valleys similar to Silicon Valley). The state proposes to forge alliances between industry and centres of research to enhance and consolidate existing knowledge. It is setting up an 'Emerging Technology Fund', which would target biotech companies within and outside the park.

Content Source: www.ibef.org