Lucknow, May 14: Uttar Pradesh is attracting defence and aerospace units to set up their infrastructure in the ‘Defence Industrial Corridor’ in the state. The state government will be reimbursing 25% cost of the land of the project along with other benefits. Prime Minister Narendra Modi has recently announced to establish ‘Defence Industrial Corridor’ in the state.
According to a report published in The Economics Times, nearly 3,000 hectare of land is notified by Uttar Pradesh between six nodes in the Bundelkhand region after PM announced the Rs 20,000 crore worth of defence corridor at the Investors Summit in Lucknow this February. The proposed defence corridor will be passing through Aligarh, Agra, Jhansi, Chitrakoot, Kanpur and Lucknow.
The government is offering reimbursement up to 25% of the cost of land to units investing over Rs 300 crore, or the units need to create 1,000 direct job opportunities in the notified area of the corridor. UP Industrial Development Minister Satish Mahana told ET, “We are ready to do anything to attract industry to UP. Nothing was thought on this by earlier governments. The defence and aerospace manufacturing policy of UP for the defence industrial corridor will perhaps be the most attractive in the country. The land is most expensive part of any project, and we are for the first time planning to offer a major concession on land in the defence corridor announced by PM.”
With the aim to attract private sector investments and to develop export-oriented bases, the 25 % reimbursement will also apply to ‘anchor units’. These units will be global or Indian defence and aerospace manufacturing companies with investment over Rs 200 crore. This companies also need to bring along ten vendor units, which should be located in the same cluster as anchor unit. Vendor units need to supply 75 percent of their end product to the anchor unit. The state government is also offering 10-15 percent to smaller companies. As per draft policy, defence public sector units will be given land on lease basis at subsidised rates.
In addition to the various subsidies, concessions will also be provided the already operational UP Industrial Investment and Employment Promotion Policy of 2017. Under this policy concession on interest up to five percent on loans taken by these companies for capital, infrastructure and industrial research will be given to the industries. Full stamp duty exemption and 70-90 percent state GST reimbursement will also be provided under the policy. Initially, the state government will be giving a 50 percent reimbursement of transportation cost on the imported equipment or machinery from ports to the production site in UP and for finished goods vice-versa.
Three private ‘defence parks’ at Kanpur, Agra and Jhansi and three ‘aerospace parks’ at Lucknow, Agra and Kanpur of 100-150 acre each on the corridor are also being proposed by the government. Each park will have at least five units.
The defence corridor is expected to create nearly 2.5 lakh jobs, according to the state government. The Prime Minister’s Office, Union Defence Minister Nirmala Sitharaman and UP Chief Minister Yogi Adityanath are monitoring the entire project.