• Punjab is a Largest agricultural area under irrigation in India
  • It has an excellent network of irrigation facilities.
  • It has 1.5% of India’s land area but contributes 2.5 % to India’s GDP. It ranks at 12th position in attracting FDI. 

There are following reason of investing in the Punjab state in various sectors

  • 3rd largest producer of wheat and rice in India
  • Largest producer of machine, hand tools and bicycle components in India 
  • Leading producer of horticulture crops – mandarin, carrots, muskmelon, honey
  • Land cost is counted under Fixed Capital Investment for incentives under Punjab’s Industrial & Business Development Policy 2017.
  • 100% exemption or reimbursement on purchase or lease of land and building.

Following sectors are the thrust sectors in Punjab:-

  1. E vehicle, NRSE equipment, Energy storage devices and Medical equipment manufacturing enterprises.
  2. Textiles including apparel and made-ups, technical textiles
  3. Footwear and accessories
  4. Electronics
  5. Aerospace and defence
  6. Agri & food processing Industries
  7. Bio-technology, Pharmaceutical
  8. Processing of Agro waste into energy        
  9. Bicycle and its parts
  10. Alloy steel
  11. IT and ITES
  12. Life Science
  13. Media and entertainment
  14. Logistics

The List of sector wise Incentives and rebates in Punjab are as follows:-

Anchor Units

  • 100% reimbursement of Net GST* Incentive for 15 years up to 200% of FCI
  • 100% exemption from CLU /EDC charges
  • 100% exemption from Electricity Duty for 15 Years
  • Exemption from payment of extra 2% over MSP to food processing units for setting up private marketing yards

Startups

  • All incentives, which are available for MSME units
  • Interest subsidy @ 8% per annum for 5 years up to Rs 5 lakh per annum
  • Reimbursement of 25% of lease rental subsidy upto Rs 3 lacs for 1 year.
  • Seed Grant up to Rs 3 lakh per start-up .

Incubator

  • Capital Subsidy up to 1Cr
  • Recurring Expenses reimbursement up to 3 lac / year for 5 years
  • Mentoring Assistance up to Rs 3 lac / year for 5 years.
  • Assistance for startup competition annually upto Rs 5 Lac per event

Border Zone Industry

  • Exemption from CLU
  • 100% exemption from EDC charges
  • 75% exemptions of all the State duties, taxes and fees to the first unit
  • First unit will also be entitled to 40% additional FCI in the maximum limit prescribed for reimbursement of Net GST* Incentive

MSME

  • Reimbursement of 100% of Net GST* Incentive for 7 years upto 100% of FCI.
  • 5% pa Interest subsidy in Border Districts and Kandi Area and SC/ Women Entrepreneurs upto 10 lakh/year for 3 years
  • 100% exemption from Electricity Duty for 7 years
  • 100% exemption/reimbursement from stamp duty
  • Reimbursement of 50% of expenses upto Rs. 5 lakh under ZED scheme of GOI

Large Units

  • 75% of Net GST* Incentive for 7 years upto 100% of FCI
  • 100% exemption from Electricity Duty for 10 years
  • 100% exemption/ reimbursement from Stamp Duty
  • 50% exemption from Property Tax for 10 years

Thrust Sector

  • 100% of Net GST* Incentive for 10 years upto 125% of FCI.
  • 100% exemption from Electricity Duty for 10 years
  • 100% exemption/ reimbursement from Stamp Duty
  • 100% exemption from CLU/EDC
  • 100% exemption from Property Tax for 10 years
  • Other incentives provided to MSME units

Early Bird

  • 100% reimbursement of Net GST* Incentive for a period of 12 years

Sector Specific Special Incentives for Units in Thrust Sectors

Food Processing Industries

  • Exemption from all taxes and fees paid for purchase of raw material for food processing units up to 10 years

ESDM

  • Top up of Capex support provided by MEITY, GOI, to first 10 Anchor units upto INR 10 Cr. per unit

IT /ITeS

  • 50% of Fixed Capital Investment .(Subject to some specific conditions)

Tourism & Hospitality

  • 100% exemption from entertainment tax
  • Apparel and made-ups, Technical textiles
  • Interest subsidy for MSMEs

Conclusion:-

Punjab government is focusing on the trust sectors for investments and providing various incentives to investors. Sectors like  E vehicle , NRSE equipment, Energy storage devices and Medical equipment manufacturing enterprises, Textiles including apparel and made-ups, technical textiles, Footwear and accessories, Electronics, Aerospace and defence, Agri & food processing Industries, Bio-technology, Pharmaceutical and alloy steel are some of the thrust sectors. Detailed list of Thrust sectors is mentioned above.