UP eyeing Rs 500 billion investment in defence manufacturing sector

Yogi Adityanath government on Tuesday announced its much-awaited UP Aerospace and Defence Manufacturing Policy 2018, which is projected to spur investment of Rs 500 billion and generate 2,50,000 jobs by 2023 in the proposed Bundelkhand Defence Corridor.

The Corridor would span 6 districts viz. Aligarh, Agra, Jhansi, Kanpur, Lucknow and Chitrakoot and a notification would be issued soon. The policy, which was approved at the state cabinet meeting chaired by chief minister Adityanath, offers a host of sops for the public and private sector companies investing in the Corridor.

UP chief secretary Anul Chandra Pandey said UP defence manufacturing policy was one of the best such policy in the country and offered various financial incentives to the domestic defence manufacturing sector. 

About 3,000 hectares would be acquired for Bundelkhand Defence Corridor by nodal agency UP Expressway Industrial Development Authority (UPEIDA). “The defence manufacturing unit would be offered land on plug and play model,” he said hinting that top-notch companies had evinced interest in the project. 

The land is likely to be acquired by September 2018 so that the actual groundwork could begin. PricewaterhouseCoopers has been engaged to prepare a report on the state defence manufacturing potential.

The Centre had earlier announced to invest nearly Rs 30 billion in the proposed Corridor. The central government investment would be made for creating necessary infrastructure such as ammunition blast testing centre to facilitate ‘plug and play’ model by the private sector companies in setting up their facilities.

The state policy bifurcates two categories of investments; first mega project worth over Rs 10 billion, wherein companies could build aircraft, tanks, helicopters etc; second anchor units with investment profile of Rs 2 billion in Bundelkhand and Purvanchal (Eastern UP) regions, Rs 3 billion in Madhayanchal (central UP) and Rs 4 billion in western UP.

The state would provide 25% on the circle rate of land purchased by the investors, while transport subsidy of 50% or Rs 20 million per year would be given for importing equipment. Pandey said transport subsidy would also be given on finished goods for export to the tune of 30% or Rs 10 million per year.

Besides, the state would offer subsidy on technology transfer, effluent treatment plant, quality control labs and patenting. The government would provide 100% on quality certification and trademark. The state would offer 100% subsidy for stamp duty in Bundelkhand and Purvanchal, 75% in other areas, while in Gautam Budh Nagar and Ghaziabad districts, it would be 50%.

Meanwhile, the Adityanath government also approved a proposal to seek bank loan to the tune of Rs 120 billion for another mega project, Purvanchal Expressway. In first phase, the state had earlier announced its roadmap to take Rs 78 billion in bank loan from a consortium led by PNB at the rate of 8.30% interest for 15 years.

The fresh loan would be repaid in 48 installments with 3 years moratorium and the installments would met through toll collections at the expressway. Awasthi informed almost, 93% of the land for the expressway had been acquired and 11,800 pillars erected to mark its boundary.

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