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Centre announces investment & manufacturing zone norms

To promote manufacturing in the country, the government on Friday issued norms for setting up of National Investment and Manufacturing Zones (NIMZs) with host of benefits, including exemption from capital gains tax. There will be exemption from capital gains tax on sale of plant and machinery of a unit located in a NIMZ, the guidelines issued by Department of Industrial Policy and Promotion (DIPP) said.

The tax break will be granted in case of re-investment of sale consideration within a period of three years for purchase of new plant and machinery in any other unit located in the same National Investment and Manufacturing Zones or another National Investment and Manufacturing Zones , it said.

Besides, NIMZs will be eligible for Viability Gap Funding, which cannot exceed 20 per cent of the project cost. As per the norms, the developers of NIMZs will be allowed to raise funds through external commercial borrowing (ECBs) for developing the internal infrastructure of the NIMZs.

Soft loans from multilateral institutions will be explored for funding infrastructure development in NIMZs it said.Assistance would be provided for negotiating non-sovereign multilateral loans by providing back-to-back support, if necessary.

NIMZs are conceptualised as integrated industrial townships of at least 50 sq km (5,000 hectares) with state-of- the-art infrastructure.

At least 30 per cent of the total land area would be devoted to manufacturing units.With regards to labour policy, the guidelines said, the central government will put in place a scheme for a job loss policy to enable units to pay suitable worker compensation in the eventuality of closures, through insurance.

The compensation under this instrument would be equivalent to 20 days' average pay for every completed year of continuous service, or any part thereof in excess of six months, it said.Under the National Manufacturing Policy, the government has proposed to set up NIMZs. The policy aims at enhancing the share of manufacturing in GDP to 25 per cent within a decade and creating 100 million jobs.

The NIMZs are envisaged as integrated industrial townships with state of the art infrastructure; land use on the basis of zoning; clean and energy efficient technology; necessary social infrastructure, etc, to provide a productive environment for persons transitioning from the primary to the secondary and tertiary sectors.

The policy is based on the principle of industrial growth in partnership with the States, it said, adding that state governments will be encouraged to adopt the instrumentalities provided in the policy.


PHARMA FIRM CLARIS OTSUKA, DECATHLON SPORTS, 10 OTHER FDI PROPOSALS GET GOVT’S NOD


The government on Friday said it has approved 12 FDI proposals, including that of pharma firm Claris Otsuka, totalling over Rs 2,609 crore.

The Foreign Investment Promotion Board (FIPB) headed by Economic Affairs Secretary Arvind Mayaram, also cleared the proposal of Decathlon Sports India’s proposal for induction of foreign equity worth Rs 700 crore to engage in single brand retail.

‘Based on the recommendations of FIPB in its meeting held on 13 February, Government has approved 12 proposals of foreign direct investment amounting to Rs 2,609.27 crore approximately,’ the Finance Ministry said in a statement.

The biggest proposal that was cleared was Ahmedabad-based Claris Otsuka Ltd’s plan to hive off its Infusions business into a new JV with FDI worth Rs 1,050 crore.

The board also cleared Mumbai-based Glynwed Pipe Systems’s proposal to receive foreign investment worth Rs 800 crore for making downstream investment.

The proposal of Pramod S.A.S, France, to induct foreign equity worth Rs 29.69 crore into an Indian JV company to be engaged in single brand retail trading was also approved.

FIPB clearance was also accorded to Fossil India and Le Creuset Trading’s for setting up of single brand retail stores as a wholly-owned subsidiary of a foreign company.
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