INDIAN STATE : BIHAR

Policy Framework

Industrial Incentive Policy 2006

Under the Industrial Incentive Policy- 2006, provisions have been made for granting pre-production incentive of subsidy/exemption from stamp duty and registration fee and post production incentive of grant/exemption for preparation of project reports, purchase of land/shed, technical know-how, captive power generation/diesel generating set, quality certificate, VAT, luxury tax, electricity duty, conversion fee, market fee etc.

With the implementation of this Industrial Incentive Policy- 2006, it is expected that there will be growth in the per capita income of the state as well as the industrial growth.

Strategy of the policy

• Create favorable circumstances in order to establish industries in the State so that among the investors, there may be positive communication.
  
• Bihar Single Window Clearance Act - 2006: To promote all round development of the state and industrial growth rapid clearance procedures for establishing industries, to issue license and certificates, to provide a congenial atmosphere to the investors of Bihar state and in this regard and for other concerned subjects Bihar Single Window Clearance Act - 2006 has been enacted.
  
• Bihar Infrastructure Development Enabling Act- 2006 - To provide for rapid development of physical and social infrastructure in the State and to attract private sector participation and to provide for a comprehensive legislation for designing, financing, construction, operation, maintenance of infrastructure projects, so that administrative and procedural delays are reduced, for identifying generic project risks, Bihar Infrastructure Development Enabling Act, 2006 has been enacted.
  
• In order to simplify the inspection of factories, provision of self-certification will be made.
  
• Industrial growth is adversely affected due to the complicated labour laws. Such labour laws will be made simple and development oriented.
  o Human resources will be developed in such a way, which can promote and create industrialization of high degree. Besides existing different institutions will be strengthened to improve skill.
  
• Land Bank- To meet the requirement of land for industries and development schemes, Land Bank will be established in the state. By this Bank, Land will be made available according to the requirements to different industries and for development schemes.
  o Marketing arrangements will be made for small, tiny, cottage industries, handloom and handicraft.
  
• For the creation of the basic facilities of international level, to enhance capital investment in the industrial areas and invite the private sector for investment and to encourage public private partnership for this purpose.
  
• Development of Infrastructure.
  
• In order to revive sick units, to identify such units and to suggest necessary remedial measures and to prevent sickness by developing a district level monitoring system.
  
• To develop handicraft, handloom, khadi, silk and village industries.

Full text of the policy

Investment Incentives

Pre-Production Incentives

Stamp duty and registration fee: Tiny, small, medium and large scale industries which are to be established in the industrial area / shed and outside the area of the Authority will enjoy the full (100%) exemption in stamp duty and registration fee in lease /sale/transfer. This facility will be granted only for the first time and thereafter will not be granted.

Post-Production Incentives

• Project Report incentive: Reimbursement of the cost incurred in the project report preparation by the industrial units at the rate of 50% subject to a maximum of US$1622.26 will be made available provided, the project report is prepared by any of the firms recognized by the Industry Department. The reimbursement will be made to the unit after commencement of the production.
• Incentive Granted on Land/Shed: The Industrial Units located in Bihar Industrial Area Development Authority / Export Promotion Industrial Park / Food Park / Agri Export Zone would be eligible for the declared incentive / subsidy.
• Financial Assistance for Technical Know how If an entrepreneur obtains Technical Know-how from any recognized National research center / laboratory or institution to establish or to expand his industry, he/she will be reimbursed 30% (maximum Rs. 15.00 lacks) of the fee paid to the Institution/organization for the technical know-how.
• Incentive Grant for Capital Investment on Captive Power Generation/ Diesel Generating Set: 50 percent of the amount spent on plant and machinery in the establishment of Captive Power Generation/Diesel Generating set will be granted to the industry.
  
• New industrial units will be granted relief from payment of electricity duty under the Bihar Electricity Duty Act, 1948 for the generation and for own consumption of electricity from D.G. Set and Captive Power Units.
• Subsidy/ Incentive on VAT will be provided.
  
• 100% exemption in luxury tax for seven years.
  
• 100% exemption in electricity duty for seven years.
  
• 100% exemption in conversion charge.
  
• 100% exemption in market Fee for seven years.
  
• Incentive on quality certification: 75 percent of the cost incurred in obtaining certificate of ISO standard will be reimbursed by the state government.
  
• Several other incentives will be provide to Information technology and handloom sector.

Major Industrial Area

Proposals approved by State Investment Promotion Board

Useful Weblinks

• Official Website of Government of Bihar
  
  
• Bihar Industrial Area Development Authority