Investment Climate in Punjab

Investment Climate inPunjab

ContentsEconomic and Demographic Profile 1Economic Profile 1Demographic Profile 2Physical Infrastructure 3Power 3Roads 4Railways 4Dedicated Freight Corridor 4Airports 4Telecom 4Social Infrastructure 5Health 5Education 5Industrial Profile 5Land Availability 6Industrial Land 6Agricultural Land 7Manpower Availability 7State Policies and Incentives 7Investments in the State 8Looking Ahead 9Annexure : Policies 10• All data is at constant (2004-05) prices unless explicitly stated otherwise• GSDP stands for Gross State Domestic Product• CSO data accessed on 18 October, 2012

EXECUTIVE SUMMARYKnown as the land of five rivers, Punjab is endowed with rich, fertile and productive agricultural land. This has beenthe bulwark of agricultural growth, making the state a leading food producer in the country as well as an attractivehub for the agro based industry. Historically, an agrarian economy, it is the entrepreneurial spirit of its people thattransformed Punjab into a state with a strong industry base, especially MSMEs. Today, Punjab is one of the mostprogressive states in the country, with a strong tradition of entrepreneurship and business acumen.Advantage Punjab:• Leading producer of foodgrains in the country, second largest contributor of wheat to the Central Pool• One of the country’s largest producers of cotton, blended yarn and mill-made fabrics• High propensity to consume, giving impetus to the retail sector. Cities of Ludhiana, Jalandhar, and Amritsaremerging as key retail markets of north India• Well established export-base• Well-developed infrastructure, including a well-connected intra-transport system, and excellenttelecommunication set-up• Availability of a large talent pool• Enabling policy framework and facilitation mechanisms creating a favourable investment climate• Strong tradition of entrepreneurship• Thrust on knowledge-based industries such as IT/ITeS, biotechnology and traditionally strong manufacturingindustries such as textiles, agro-based and light engineering industries.

1Economic & Demographic ProfileEconomic profileThe GSDP of Punjab was Rs 1,565 billion in 2011-12 against Rs 968billion in 2004-05, registering a CAGR of 7.1 percent. The GSDPcontribution of the state in the national GDP was 3 percent in2011-12. 1The state achieved the average growth rate of 6.9 percent duringthe 11th plan as against the target of 5.9 percent 2 .Figure 1: GSDP of PunjabFigure 2: Key Economic Indicatorsin billion1,8001,5001,2009006003001,0265.910.29.01,130 1,2321,3045.81,3866.31,4816.81,5655.712963in percentKey Component (2011-12)ValueGSDPRs 1,565 billionGrowth in GSDP5.7 percentPer Capita Income Rs 46,788National Per Capita Income Rs 37,851-0Source: CSO2005-062006-072007-082008-092009-102010-112011-12Source: CSO1CSO2Economic Survey, Punjab, 2011-12

2Punjab, primarily an agrarian economy, is diversifying intoindustrial and services sectors. This has resulted in an increase inthe shares of the secondary and tertiary sectors.Figure 3 : Contribution of different sectors towards the economy of Punjab2004-052004-052011-12Demographic profilePunjab, with a population of 27.7 million, constitutes 2.3 percentof the national population and ranks 15th in terms of size of thepopulation. The population density of Punjab is 550 persons persq km. The decadal population growth stood at 13.7 percent. 3Figure 4: Key Demographic IndicatorsKey IndicatorsValue42.632.742.632.745.522.8PopulationPopulation Size (Male)27.7 million14.6 millionPopulation Size ( Female)13.1 million24.724.731.7Rural Population17.3 millionPrimaryPrimary SecondarySecondary TertiaryTertiaryPrimary Secondary TertiarySource: CSOUrban PopulationLiteracy RateMale LiteracyFemale Literacy10.4 million76.7 percent81.5 percent71.3 percentDensity of Population (persons persq km)550Sex Ratio (females per 1000 males) 893Source: Census (Provisional) 20113Census 2011 (Provisional); www.punjabcensus.gov.in

3Figure 5 : Urbanisation trends in PunjabFigure 6 : Peak demand – supply position in the StateSource : http://punjabcensus.gov.in/pdf/Paper%20I.pdfSource: CEAPhysical InfrastructurePowerPunjab has a total installed power generation capacity of 7,143MW, which includes 5,130 MW under the state utilities, 1,876 MWunder central utilities and 137 MW under the private sector. Ofthe total installed capacity in the state, the contributions from thevarious sources are as follows 4 :• Thermal power – 49.5 percent• Hydro power - 42.2 percent• Renewable energy sources- 5.3 percent• Nuclear power- 2.9 percentTo address the growing demand for power, Punjab hasundertaken various power projects to augment the overallcapacity of the state. Steps have been taken to make Punjab selfsufficient by March, 2014.Figure 7 : Upcoming Power ProjectsOngoing Power ProjectsProjectsGoindwal Sahib Thermal PowerProjectTalwandi Sabo Thermal PowerProjectMWExpectedCompletion Date540 May, Nov, 20131,980Aug, Nov, 2013,Mar,2014Rajpura Thermal Power Project 1,400 Jan, May, 2014Proposed Power Projects in 12th PlanGiddherbaha Thermal Power Plant 2,640 Allotted to NTPCMukerian Thermal Power Plant 1,320 In state sectorShahpur Kandi Hydel Project 206 Not available4Central Electricity Authority, August 2012, including allocated shares inSource: Annual Plan 2012-13, Government of Punjab, Planning Commissionjoint and central sector utilities

4RoadsThe state has an excellent network of 64,037 km of roads. 12national highways pass through Punjab accounting for 2.1percent of the total national highways in India 5 . Punjab is the firstIndian state with 100 percent connectivity to the rural areas.Figure 8: Key Road NetworkRoad TypeRoad Length(in km)National Highways 1,739State Highways 1,503Major District roads 2,107Rural Roads (includingVillage link roads)58,688Source: Economic Survey 2011-12, Government of PunjabProjects completed during 11th Five Year Plan:• 405 km road length of key national highways upgraded to fourlanes• 520 km on nine roads upgraded on Build Operate Transfer (BOT)basis at a cost of Rs 6.2 billion.• 705 km of state roads were upgraded under the World BankFunded Road Sector Project at the outlay of Rs 15 billion• Under Pradhan Mantri Gram Sadak Yojana, 3,193 km ofrural roads were upgraded at a cost of Rs 11.8 billion.Proposed projects during the 12th Five Year Plan:• The work of four laning 400 km of four national highways -Shambhu-Jalandhar highway, Pathankot-Amritsar, Ludhiana-Talwandi Bhai and Bhogpur-Mukerian is under progress and islikely to be completed by July 2013• 893 km road length on 5 national highways of Zirakpur-Bathinda, Jalandhar-Dhilwan, Amritsar-Shri Ganga Nagar,Jalandhar-Jind road and Kharar-Ludhiana road shall beupgraded to 4/6 laning under Public Private Partnership• Proposal to construct and upgrade 575 km of road length underBuild Operate Transfer (BOT) basis at an estimated cost of Rs 24billion• 3,200 km of rural road length at a cost of Rs 16 billion to betaken up, in addition to the upgradation of 2,000 km of ruralroads in border belt• 27 Road Over Bridges (ROBs)/ Road Under Bridges (RUBs)and 10 High Level Bridges and construction of bye-passes inmajor towns will also be taken up over the next few years• 204 km of state roads will be upgraded through long term 10year tenure under Output and Performance Based RoadContracts.RailwaysPunjab has a total rail length of 2,134 km and has the fourthhighest rail density amongst all states and Union Territories inIndia.A Metro Rail project has been proposed at Ludhiana at aninvestment of Rs 103 billion. The project is to be completedover the next five years. It will have 2 corridors - 15.8 kms longCorridor-I and 13 km long Corridor-II. Altogether, there will be 27stations.Dedicated Freight CorridorAbout 88 kms of the total 1,839 kms of the Dedicated EasternFreight Corridor will transverse through Punjab. The corridor,starting from Ludhiana, will connect the state to the eastern portat Dankuni providing connectivity to the eastern coalfields ofIndia – which is very important for thermal power projects in thestate.AirportsThe major airports in Punjab are located at Amritsar (Internationalaiport), Chandigarh, Ludhiana and Pathankot (operational civilenclave). New airports have been proposed at Mohali, Bathindaand Ludhiana. The proposed Greenfield airport at Ludhiana to bedeveloped as an aerotropolis, with an investment of Rs 180 billion.For upgradation and extension of air terminals and aerodromes,a sum of Rs 240 million was earmarked in the annual budget ofFinancial Year 2012 6 .TelecomPunjab has 33.3 million subscribers and an overall teledensity of113.1. 7Figure 9: Key Telecom IndicatorsKey IndicatorsSubscribersValue33.3 millionWireless subscribers 31.9 millionWireline subscribers 1.4 millionTeledensity 113.1Urban Teledensity 180.9Rural Teledensity 64.6Source: The Indian Telecom Services Performance Indicators (January - March 2012)Telecom Regulatory Authority of India5www.nhai.org/statewise1.asp6Annual Plan 2012-13, Department of Planning, Government of Punjab7The Indian Telecom Service Performance Indicator (January-March 2012), Telecom Regulatory Authority of India

5Social InfrastructureHealthThe healthcare infrastructure in the state is quite robust.Figure 10 : Key healthcare infrastructure in the State (2010-11):Industrial profilePunjab State Industrial Development Corporation and PunjabSmall Industry and Export Corporation are the state nodalagencies for the promotion of industries and development ofindustrial infrastructure.Key Infrastructure IndicatorNumbersFigure 12 : Number of large and medium scale industrial units and growth inproductionHospitals 91Primary Health Centres 444Community Health Centres 130Dispensaries 1,412Ayurvedic and Unani Institutions 529Homeopathic Institutions 111Source: Economic Survey, Punjab, 2011-12A sum of Rs 7.2 billion was allocated for the development ofhealth infrastructure in the annual budget for the Financial Year2012.Figure 11 : Key Health Indicators in the StateNumber of Industrial UnitsNumber of working large and medium scale industrial unitsGrowth in production (in percent)50022.345042540040037335517.120.015.9300 17.720010002007-08 2008-09 2009-10 2010-11 2011-12 (P)Source: Economic Survey of Punjab 2011-122520151050Growth in percentKey Heath IndicatorNumbersFigure 13 : Number of small scale industrial units and growth in productionPopulation served per bed (2010) 1,281Birth Rate* 16.6Death Rate* 7Infant Mortality Rate** 34Source: Punjab Planning Board; Sample Registration System, December 2011Note: * per 1000 population** per 1000 live birthsEducationPunjab has a well-developed school education networkconsisting of 13,950 primary, 3,792 middle and 5,657 high/senior secondary schools. It has 6 Universities and 234colleges. Some of the premier higher education institutions inthe state are:• Panjab University, Chandigarh• National Institute of Technology, Jalandhar,• Thapar University, Patiala• Indian School of Business, Mohali• Rajiv Gandhi University of Law, Patiala• Punjab Agricultural University, Ludhiana• Guru Angad Dev Veterinary and Animal Sciences University,LudhianaNumber of Industrial Units172,000170,000168,000166,000164,000162,000160,000158,000167,7229.515.0 14.6162,559Source: Economic Survey of Punjab 2011-12Number of working small scale industrial unitsGrowth in production (in percent)164,732168,000170,500Punjab has a strong industrial base. The state has 425 large andmedium scale industrial units with a fixed investment of Rs 400billion and turnover of Rs 820 billion providing employmentopportunities to 2,35,000 people as on 2010-11(Provisional) 8 .small scale industries constitute around 40 percent of theproduction, 60 percent of the exports and 15 percent of theinvestment made in Punjab. These industries generate 4.3 timesthe employment generated by the medium and large scaleindustries.The Government of Punjab has given top priority to industrialdevelopment in the state. The Industrial Policy, 2009 focuseson development of industrial clusters to provide a competitiveadvantage to the industries.12.511.12007-08 2008-09 2009-10 2010-11 2011-12 (P)1614121086420Growth in percent8Economic Survey of Punjab 2011-12

6Ludhiana, Jalandhar, Amritsar, Mandi Gobindgarh and Mohaliconstitute the main industrial centres in Punjab. Ludhiana has thelargest number of large and medium units and is a major exporterof textiles, light engineering products including machines tools,hand tools and sewing machines, bicycles and bicycle parts andauto components. Jalandhar is known for leather goods, sportsgoods and sewing machines and Amritsar for food processingand textiles industries. Mandi Gobindgarh, is the “Steel Town ofPunjab”, a cluster of 275 operational rolling and re-rolling millsrelated to the iron and steel industry. Mohali is host to IT/ITeSsector and electronics manufacturing.With the abundant resource endowments in the state, thepotential industries include tractors and auto components, agrobasedindustries, bicycle manufacturing, chemical products, foodproducts, pharmaceuticals, textiles, paper products and lightengineering goods.Punjab has a rich and productive agricultural base combinedwith a conducive Agro Industrial Policy, 2009 making it an idealdestination for setting up agro & food processing industries.The state has the highest cropping intensity in the country 9 andcontributes 45.4 percent of wheat and 25.3 percent of rice toCentral Pool 10 . Punjab is a leading producer of milk with diaryproduction of 25,600 tonnes. The state accounts for 10 percent offertiliser consumption and one third of all the tractors operationalin the country.The Punjab Agro Industries Corporation has been encouragingprivate sector investments in agro‐processing units. The AgroIndustrial Policy, 2009, provides special incentives to the agroindustry investors based on the size and projects with minimumfixed capital investment of Rs 250 million under mega projectscheme. In addition, Punjab Agri Export Corporation providesa subsidy of 25-30 percent on waxing/grading, packing andfreight for distant marketing and export of fresh and processedvegetables. The total storage facility of foodgrains in the state is22.6 million tonnes in 2010-11.The state has set up a Permanent Perishable Cargo Centreat Amritsar international airport to boost farm exports andagricultural machinery service centres to provide agriculturaltools on custom hiring bases. The total budget outlay by Punjabgovernment for the year 2011-12 for agriculture and alliedsectors was Rs 4.53 billion, out of which Rs 3 billion was for crophusbandry and Rs. 450 million for animal husbandry 11 .IT/ITeS sector is another key potential sector in the state withMohali as the hub of electronics and IT industry. The stategovernment has also identified suitable land parcels at Railmajraand Kapurthala for the development of world class IT/ITESinfrastructure. The software exports doubled to Rs 14 billion in2010-11 from Rs 7 billion in 2009-10. 12Punjab is one of the leading producers of cotton, blended yarnand mill-made fabrics in the country.Light engineering goods industry, consisting of bicycle andbicycle parts, hand tools, sewing machines and machine tools isan important sector of the state. A significant share of bicyclesand bicycle parts produced in the country come from Punjab.Total exports from Punjab during the year 2010-11 were valuedat approximately Rs 174.3 billion displaying a 9.1 percent increaseover exports in the year 2009-10 13 .Figure 14 : Export trendsSource: Statistical Abstract Punjab 2010; Government of PunjabHosiery and readymade garments constitute about 31 percentof the total exports from Punjab followed by yarn and textilecontributing 23 percent. The districts of Ludhiana, Gurdaspur andJalandhar accounts for around 95 percent of the total exportsfrom Punjab.Figure 15 : Sector wise distribution of goods exported from Punjab (2009-10)Source: Government of PunjabThe key sectors in the state include textiles, light engineeringgoods, automotive, IT and electronics and agro-based industries.Land AvailabilityIndustrial LandThe state government proposes a cluster approach to boostindustrialisation. Some of the proposed industrial areas/themeparks include 14 :1. Mohali-Chandigarh is a hub for IT/ITeS, electronics andpharmaceuticals industry. The proposed plans include:• Information and Knowledge City at Mohali over an area of1,500 acres9http://www.pbindustries.gov.in/strengths.htm10Economic Survey of Punjab 2011-1211Economic Survey of Punjab 2010-1112Economic Survey 2011-12, Government of Punjab13Government of Punjab14Economic Survey of Punjab 2011-12; KPMG Research

72. Investment Corridor Ludhiana-Jalandhar-Amritsar is a hubfor Textile and Light Engineering goods. The proposed plansinclude :• World class IT/ITeS infrastructure at Railmajra/Kapurthala• Industrial clusters to promote cotton and woollen textiles• Mega Tourism Project for integrated development ofAmritsar city3. Growth Centres of Bathinda-Sangrur-Patiala-Rajpura are hubsfor light engineering goods, petrochemicals, and foodprocessing. The proposed plans include:• Global Industrial Knowledge City at Rajpura spread over anarea of 1,359 acresAgricultural LandAround 83 percent of the available geographical area is used foragricultural purposes (i.e. the net sown area) and approximately 6percent of the total geographical land is under forests.Figure 16 : Land Utilisation pattern in PunjabLand TypeGeographical area 5,036Area for land utilisation 5,033Forest area 294Net sown area 4,158Net irrigated area 4,070Gross irrigated area 7,724Not available for cultivationArea put to non agriculturaluseSource: Statistical Abstract of Punjab, 2011Area (‘000 hectares)508Barren and uncultivable land 24Other uncultivated land excluding fallow landPermanent pastures andother grazing landsCultivable waste land 4Manpower Availability4Punjab’s growth is fuelled by the availability of a large talent pool.The state government has taken a number of steps to improve thequality of education, including encouraging private participationin technical and vocational education.The state is currently upgrading 35 Industrial Training Institutes(ITIs) into Centres of Excellence at a cost of Rs 1.28 billion and76 ITIs at Rs 25 million per ITI under PPP scheme. In addition, 11technical institutions have been upgraded into multipurposeacademies under National Bank for Agriculture and RuralDevelopment (NABARD) project.Some of the key skill development initiatives taken by the stateare:• Draft Technical Education Policy – a pioneering initiative toencourage skill training in the state• Under the National Skill Development Mission, 73 new ITIs and2,500 Skill Development Centres will be opened by 2017• 50,000 candidates to be provided skill development training inone of the 1,400 courses by Vocational Training Providers(VTP), every year• A Construction Skill Development Centre has been setup invillage Abul Khurana of Lambi Block in Sri Muktsar Sahibdistrict, in collaboration with L&T• A centre for providing training in the trades of driving andautomotive skills setup in collaboration with Tata Motors invillage Mahuaana of Lambi block in Sri Muktsar Sahib district• Establishment of Entrepreneurship Development Centres atPTU Colleges• Establishment of Incubation Centre at LPU campus, Jalandharand Mohali• Skill Gap Study by CII• Skill Centre in the retail sector set up at Amritsar, incollaboration with Bharti Walmart.State Policies and IncentivesIn order to position itself as the destination of choice in manydiverse sectors and to encourage the overall growth of itseconomy, the Government of Punjab has implemented severalpolicies. These policies provide a roadmap to boost the industrialclimate and remove various road blocks which hampered theindustrial expansion of the state. These policy documents alsoencompass investment incentives and schemes for investors.Please refer to Annexure for various policies and tax structure inplace in Punjab.Figure 17 : ITIs/ITCsInstitutesNumbersNumber of Government 97ITIsSeating Capacity 20,260Number of Private ITCs 243Seating Capacity 28,784Total ITIs/ITCs 340Total Seating Capacity 49,044Source: Directorate General of Employment & Training (DGET),Ministry of Labour & Commerce

8Single Window Clearance Mechanism - Udyog SahayakThe state government has implemented the Punjab Industrial Facilitation Act, which aims at expediting industrial approvals in a timebound manner. Udyog Sahayak in the Directorate of Industries & Commerce and District Industries Centres in the state have beendesignated as State Nodal Agency and District Nodal Agencies respectively under this Act. The following committees have beenconstituted under the Act:• State Board under the Chairmanship of the Chief Minister to review and monitor industrial approvals and grant exemption orrelaxation from the provision of any law made by the Punjab State Legislature relating to industrial development.• Empowered Committee on Industrial Facilitation under the Chairmanship of Industries & Commerce Minister to review and monitorthe status of applications for clearances and resolve inter-departmental matters• District Level Single Window Clearance Committee under the Chairmanship of Deputy Commissioner to review and monitor thestatus of applications received at the district level.Time schedules for various approvals required by an entrepreneur have been notified under the Industrial Facilitation Act. Notificationhas also been issued to the effect that in case the application for approvals is kept pending by the department concerned withoutassigning any reason, and approval is not granted within the notified time schedule; deemed approval shall be granted to the applicantby the Nodal Agency.Investments in the StateThe state received industrial investment proposals amounting to Rs 1,232.8 billion during the period August 1991 to May 2012. Duringthe year 2011 the state has attracted investment intentions of Rs 135.7 billion.Figure 18 : Investment Intentions in the stateYearNumbersFiledProposedInvestment(Rs billion)Share of state inNorthern Regionproposed investments(percent)2009 68 97.3 18.5 14,449ProposedEmployment(Numbers)2010 102 67.8 9.2 39,1662011 112 135.7 13.7 29,8152012(May) 39 21.8 9.0 10,539Source: SIA Statistics, Department of Industrial Policy and Promotion, Ministry of Commerce& IndustryNote: Investment in terms of Industrial Entrepreneur Memoranda (IEMs) filed, Letters ofIntent (LOIs) issued and Direct Industrial Licenses (DILs) issuedNorthern Region includes the states of Delhi, Haryana, Himachal Pradesh, Jammu &Kashmir, Punjab, Rajasthan, Uttar Pradesh, Uttarakhand and UT ChandigarhForeign Direct InvestmentAccording to the Department of Industrial Policy and Promotion, FDI inflows from April 2000 to July 2012 amounted to US$ 1.2 billion inthe state (including Chandigarh, Haryana and Himachal Pradesh). For the period April 2012 to July 2012, FDI inflows amounted to US$ 7million. 1515Department of Industrial Policy and Promotion, Ministry of Commerce & Industry

9LOOKING AHEADPunjab, a progressive state withenterprising people, has a strong industrialbase. The traditional industries in the stateinclude agro-based & food processing,textiles, light engineering, auto parts,sports goods, tractor and bicycle & bicycleparts.The Industrial Policy of the state aims tobroaden the industrial base. It envisagesgreater role for the industry and servicessectors in the economic development ofPunjab. Some of the focus areas identifiedby the policy include IT & ITeS, valueaddedagro-based & food processing,entertainment, hospitality, healthcare,biotechnology, telecommunication andresearch and development services. Thepolicy also lays emphasis on promotingPPPs.The policy addresses land-related issues byspecifying measures to facilitate land useconversion. It provides fiscal incentives formega projects (projects with fixed capitalinvestment of Rs 1,000 million and above,and Rs 250 million for border districts).In order to create an enabling environmentfor the industry, Punjab aims to becomea power surplus state by March 2014 andis making substantial investment in thepower sector. Skill development is anotherkey focus area, with the state planningto implement the Technical EducationPolicy. The focus is to improve the qualityof education. Many specialised skilldevelopment institutions are being set upin the State and the existing ones are beingupgraded in Public Private Partnerships. Toimprove connectivity, the state is focusingon improving road infrastructure by 4and 6 laning of existing national and statehighways seeking greater participationof private players through Public PrivatePartnership mode.With a favourable policy environment, anenabling infrastructure and the enterpriseof its people, Punjab is an attractiveinvestment destination.

10Annexure : PoliciesIndustrial Policy 2009 16The New Industrial Policy 2009 aims at infrastructure development, lesser number of regulations and speedy clearance of new projects.The key initiatives under this policy include:• State-level monitoring committees set up to oversee the implementation of the industrial policy in a time-bound manner• Easy and quick clearance for projects through one-time settlement schemes and Udyog Sahayak• Constitution of the empowered committee to grant special privileges for projects of significance• Special incentives for industries proposed to be set up in border areas• Infrastructure development through private sector participation by setting up Special Purpose Vehicles (SPVs), exemption toprivate investors from the Punjab Apartment and Property Regulation Act 1995, and exemption from payment of stamp duty onthe first sale/ transfer of developed infrastructure by the developer• Power sector reforms, including permission for power generation for captive use, use of non-conventional sources of energy,electricity duty exemption for captive power generated for self-use• Implementation of VAT and replacement of octroi and entry tax with a single point local area development tax• Enhancement of competitiveness of existing industrial units through capital subsidy and freight subsidy• Automatic clearance for sugar industry units for co-power generation, setting up of distilleries and sale of power to other industries• Revival of sick industrial units through various subsidies• Incentives to agro-based industries like permission for direct purchase of agricultural products from farmers, minimal sales tax onpackaging materials, no market fee and rural tax on commodities other than wheat and paddy.Agro Industrial Policy 2009 17Agro Industrial Policy 2009 aims to explore the vast untapped potential in agro industrial sector and make Punjab, the destination ofchoice for investors and processors, both global and domestic.Key features of the policy include:• To increase the flow of investments in agriculture and agro industries so as to establish backward and forward linkages• To accelerate a close interface between research, extension mechanisms, industry, farmers, markets and consumers• To increase value addition thereby increasing income of farmers, traders and delivering better quality products to consumers• To create modern supply-chain infrastructure needed for agro industrial development and marketing of agri produce• To create employment opportunities, thus, improving the quality of life• To assist small-scale agro based units to remain competitive in a globalized market• To increase export of fruit and vegetables and value added agri products• 5 percent back ended subsidy for 5 years on the interest on term loan subject to a ceiling of Rs 2 million per year per unit i.e.maximum of Rs 10 million in five years, will be provided subject to the conditions specified• Interest subsidy will be available to agro industrial units making fixed capital investment ranging from Rs 100 million to less than Rs250 million and availing term loan upto Rs 150 million. The cost of land for the computation of fixed capital investment will not bemore than 20 percent of fixed capita.16http://pbindustries.gov.in/pdf/Industrial_Policy_2009__48%20-%2006%20Oct2009.pdf17http://pbindustries.gov.in/pdf/Industrial_Policy_2009__48%20-%2006%20Oct2009.pdf ; The policy is a partof Industrial Policy 2009

11IT/Knowledge Industry Policy 2009 18The Information Technology & Knowledge Industry Policy 2009 endeavours to delineate a strategy for harnessing the opportunitiesand the resources offered by the Information Technology and Knowledge Industry for the comprehensive social and economicdevelopment of the state of the IT policy.Key features include:• IT and other knowledge units notified by PICTCL will be exempt from the purview of the Punjab Pollution Control Board (PPCB) oncompliance of basic minimum norms/standards defined by PPCB for green industries• VAT on all IT products rationalized to be at par with minimum floor rate of 4 percent• No stamp duty and registration fee will be levied in respect of land allotted by PICTCL to the IT Parks/units• IT Units/Parks will have permissible FAR of 300 percent on gross area of the project• Power would be available to IT units/knowledge industrial units at industrial tariff irrespective of their location/zoning• IT/Knowledge Industry Parks shall be exempted from the Punjab Apartment and Property Regulation Act (PAPRA) 1995, inaccordance with the power vested with the state government under Section 44 (2) of the Act• Special Incentives for mega projects - government may consider special package of incentives for all mega projects on a case-tocasebasis, based on the gestation period of projects, pioneering nature of projects, locational aspects, state-of-the-art technology,profitability, scope for further related investment etc. Empowered Committee, under the Chief Minister shall be competent toapprove the special package of incentives and modalities for the same• Special Incentives for Small and Medium Enterprise (SMEs) - Capital subsidy at 20 percent of fixed capital investment in a project,subject to ceiling of Rs 2 million, to be available to first 10 approved SME units in the IT Parks notified by PICTCL• Punjab Venture Capital Fund has been created by Government of Punjab with a corpus of Rs 200 million contributed by SIDBI andvarious state corporations. The fund has already mobilized contributions to the tune of Rs 50 million and the management of thefund is going to be entrusted to a private partner. The state government will contribute an additional sum of Rs 5 million to thecorpus.Eco Tourism Policy 2009 19Punjab is endowed with a very rich spectrum of landscapes, forests, wildlife, wetlands, community reserves, conservation reserves andcultural diversity. It is also home to several endangered species including the Indus Dolphin.The Government of Punjab has implemented Eco Tourism Policy 2009 to promote ecotourism in the state. It has been developed inharmony with the broad framework outlined in the Tourism Master Plan for the state. The focus of the policy is on conservation ofnatural resources through awareness building, diversification of tourism activities and destinations, and local community participationand synergy with general development of the tourism sector. This policy is aimed at informing and sensitising the general public andrelated government departments towards ecotourism and laying down the framework for its growth in the state in an environmentally,socially and economically sustainable manner.Key features include:• Building environmental and cultural awareness and respect and provide positive experience for both visitors and hosts• Ecotourism would involve a selective approach, scientific planning, effective control and continuous monitoring• It should be planned as part of the overall area development strategy guided by an integrated land-use plan and associated withcommensurate expansion of public services• Emphasis will be given to actively involve local communities and enhance their economic conditions• The type and scale of tourism development should be compatible with the environment and socio-cultural characteristics of thelocal communities and would lead to sustainable development of the area• Only activities and facilities having least impact on the natural resources and the local culture to be permitted. Preference should begiven to use the already existing infrastructural facilities available in the area rather that creating a new one• Adhering to the principles of carrying capacity to avoid overuse of natural resources18www.punjabinfotech.org, The policy is a part of Industrial Policy 200919punjabtourism.gov.in/Punjab%20Eco-tourism%20Policy%202009.rtf

12• Capacity building of local communities and other stakeholders shall be ensured• State shall ensure that certain part of project cost/economic returns of such activities are ploughed back in conservation anddevelopment of natural resources of that area.Textile Policy 2006 20The government initiated Textile Policy (2006) to facilitate and promote the growth of the industry, achieve global standards in productquality, contribute to exports and to encourage textile clusters so as to improve business processes.Textile Policy key features include:• Maximum investment to be attracted under the Technology Upgradation Fund Scheme (TUFS) of the central government• Creation of sound infrastructure in the form of textile clusters, apparel parks and integrated textile parks, having all necessaryfacilities at one place, developed mainly through private sector participation• Setting up of new educational and training institutes for making skilled technical workforce available to the industry, withassistance from the Government of India as well as private sector participation• Reduction in electricity duty to half the existing rate for mega textile projects for a period of five years and full waiver of electricityduty for a period of seven years for mega textile projects in the districts of Patiala, Sangrur, Mansa, Bathinda, Faridkot, Moga,Muktsar and Ferozepur;• Assistance in land acquisition by the state government for setting up of mega textile units, with provisions to offer flexible labourregime for these units.New & Renewable Source of Energy (NRSE) Policy 2006 21Punjab formulated the NRSE Policy 2006 to develop and promote new technologies based on renewable sources of energy and focus onenergy conservation measures.NRSE Policy key features include:• Power generation though small/ micro hydro projects, co-generation of power in industries like sugar, paper, chemical andfertilisers and power generation from bio mass, agricultural waste and solar energy• Clearances for all projects related to NRSE, in a time-bound manner through a single window mechanism within a period of 60 days• Exemption of octroi on energy generation and NRSE devices/ equipment/ machinery for NRSE power projects• Maintenance of a ‘Renewable Energy Corpus Fund’ by the Punjab Energy Development Agency to assist and undertake activitiestowards commercialisation of NRSE projects and programmes• Provision for purchase of electricity in whole or part (as required by the power producer) by Punjab State Electricity Board to ensurefull utilisation of NRSE• Provision of government land, if available, for setting up NRSE projects at a nominal lease rent of rupee one per sq m for a period of33 years.20http://www.pbindustries.gov.in/downloads/NotificationTextilePolicy2006.pdf21http://www.ireda.gov.in/Compendium/Data/Punjab/NRSE%20POLICY-2006.pdf

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14AboutKPMG IN INDIAKPMG is a global network of professional firms providing Audit, Tax and Advisory services.We operate in 150 countries and have 138,000 people working in member firms aroundthe world. The independent member firms of the KPMG network are affiliated with KPMGInternational Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is alegally distinct and separate entity and describes itself as such.Our Audit practice endeavors to provide robust and risk based audit services thataddress our firms’ clients’ strategic priorities and business processes.KPMG’s Tax services are designed to reflect the unique needs and objectivesof each client, whether we are dealing with the tax aspects of a cross-borderacquisition or developing and helping to implement a global transfer pricingstrategy. In practical terms, that means KPMG firms work with their clients toassist them in achieving effective tax compliance and managing tax risks, whilehelping to control costs.KPMG Advisory professionals provide advice and assistance to enablecompanies, intermediaries and public sector bodies to mitigate risk,improve performance, and create value. KPMG firms provide a wide rangeof Risk Consulting and Management Consulting that can help clientsrespond to immediate needs as well as put in place the strategies for thelonger term.KPMG in India, a professional services firm, is the Indian memberfirm of KPMG International and was established in September 1993.Our professionals leverage the global network of firms, providingdetailed knowledge of local laws, regulations, markets andcompetition. We provide services to over 5,000 internationaland national clients, in India. KPMG has offices across India inDelhi, Chandigarh, Ahemdabad, Mumbai, Pune, Bangalore,Chennai, Kochi, Hyderabad and Kolkata. The firms in Indiahave access to more than 5,000 Indian and expatriateprofessionals, many of whom are internationally trained.We strive to provide rapid, performance-based, industryfocusedand technology-enabled services, which reflect ashared knowledge of global and local industries and ourexperience of the Indian business environment.kpmg.com/in

The Confederation of Indian Industry (CII) works to create and sustain an environmentconducive to the growth of industry in India, partnering industry and government alikethrough advisory and consultative processes.CII is a non-government, not-for-profit, industry led and industry managed organisation,playing a proactive role in India’s development process. Founded over 117 years ago,it is India’s premier business association, with a direct membership of over 7100organisations from the private as well as public sectors, including SMEs and MNCs,and an indirect membership of over 90,000 companies from around 250 nationaland regional sectoral associations.CII catalyses change by working closely with government on policy issues,enhancing efficiency, competitiveness and expanding business opportunitiesfor industry through a range of specialised services and global linkages. It alsoprovides a platform for sectoral consensus building and networking. Majoremphasis is laid on projecting a positive image of business, assisting industryto identify and execute corporate citizenship programmes. Partnerships withover 120 NGOs across the country carry forward our initiatives in integratedand inclusive development, which include health, education, livelihood,diversity management, skill development and water, to name a few.The CII Theme for 2012-13, ‘Reviving Economic Growth: Reforms andGovernance,’ accords top priority to restoring the growth trajectory ofthe nation, while building Global Competitiveness, Inclusivity andSustainability. Towards this, CII advocacy will focus on structuralreforms, both at the Centre and in the States, and effectivegovernance, while taking efforts and initiatives in Affirmative Action,Skill Development, and International Engagement to the next level.With 63 offices including 10 Centres of Excellence in India, and7 overseas offices in Australia, China, France, Singapore, SouthAfrica, UK, and USA, as well as institutional partnerships with223 counterpart organisations in 90 countries, CII serves asa reference point for Indian industry and the internationalbusiness community.Confederation of Indian IndustryThe Mantosh Sondhi Centre23, Institutional Area, Lodi Road, New Delhi – 110 003(India)T: 91 11 24629994-7 • F: 91 11 24626149E: info@cii.in • W: www.cii.inBlock No. 3, Dakshin Marg,Sector 31-AChandigarh - 160 030Tel : 0172- 6515505 / 5022522/ 2605614Fax : 0172-2614974sumanpreet.singh@cii.in