Procurement from small sector may be made mandatory for mega projects

The Telangana Government would make it mandatory for mega industrial projects to procure a certain part of their requirements from the local small-scale industry. The proposed new industrial policy is likely to provide for such a provision.

During his six-hour long interaction with the industry representatives and associations, Telangana Chief Minister K Chandrasekhara Rao announced some measures which included a safety net for small and medium enterprises, removal of anomalies in the VAT rates vis-à-vis neighbouring States, payment of subsidy dues of ₹800 crore and a single-window for giving permissions.

While asking the Industry Department to study the anomalies in a week, he said the tax rates would be a tad lower than in the neighbouring States.

The decision was made after representatives from manufacturing, cotton and other sectors highlighted the flight of business to neighbouring States of Karnataka, Tamil Nadu and Maharashtra due to high rates or no VAT on different commodities.

To address the increasing mortality rate and distress in the small-scale sector, the Chief Minister said the Government would contribute matching funds if the industry came forward to set up a corpus fund. “There are about 70,000 small and tiny firms in the State. If we can set up a corpus fund, we can quickly come to the rescue those in distress,” he said.

On the ₹800 crore dues to the industry in various subsidy schemes, Rao said the dues were a legacy the new State inherited from the combined State. “But we will pay the dues in phases,” he assured the industry.

He also announced waiver of penalties to the tune of ₹50 crore imposed on firms by the power utilities for drawing more power above the prescribed levels.

He said the Government has taken up a survey of land that is available for allocation to industry. “The Government has about 35 lakh acres. Of this, 20 lakh acres are not arable and about 3 lakh acres can be spared for the industry,” he said.

The Chief Minister said the Government would reserve 10 per cent of water to the industry in all future irrigation projects. “This will help avoid delays in according permissions to the industry,” he said.

The Government would soon start a web site to offer standardised applications to entrepreneurs, aspiring to start industries in various sectors. This would be connected to the single-window system. “We will give permissions from all the 26-36 departments in 21 days for all the eligible projects,” he said.