INDIAN STATE : RAJASTHAN

Investment Incentives

Investment Incentives as under the "Rajasthan Investment Promotion Scheme" (2003)

• 100 percent exemption of luxury tax for seven years.
  
• 50 percent exemption of entertainment tax for seven years.
  
• 50 percent exemption of electricity duty for a period of seven years.
  
• 50 percent exemption from mandi tax for seven years.
  
• 50 percent exemption from stamp duty.
  
• 50 percent exemption from conversion charge.
  
• 5 percent interest subsidy.
  
• Wage/ employment subsidy set off against sales tax.

Major incentives for information technology units (Under IT Policy 2000)

• Commercial buildings which are fully dedicated to Software / IT industry will be exempted from Land & Building Tax on a case to case basis by the Empowered Committee on investment chaired by the Chief Secretary. If the use of building changes, this exemption would automatically get revoked.
• Software units have already been permitted to be set up in urban areas. To further liberalize this aspect, Software units will be permitted to be set up in residential plots without change in land use.
• Property transactions in designated IT Parks will be exempted from Stamp Duty.
• Rajasthan State Electricity Board (RSEB) shall endeavor to ensure uninterrupted supply of power. There will be no requirement of taking permission from RSEB regarding installation of DG sets of any capacity for captive use up to 50% of the industry's demand.
• IT Software and IT Services companies, being the constituents of the knowledge industry, shall be exempted from routine inspection by inspectors like those for Factory, Boiler, Excise, Labor, Pollution, Environment, Industry, RESB etc. in line with the approved policy of Government of India.
• IT Software and IT Services shall be deemed as manufacturing activity for the purpose of incentives for the industry in line with the approved policy of Government of India. Depreciation norms and Loan for capital investments and working capital requirements will be in line with the approved policy of Government of India.
• State Fls and the banks will be allowed to invest in the form of equity in line with the approved policy of Government of India.
• All promotional and liberalized policy instruments available to the IT Software and IT Services shall be made available to the IT enabled Services including the Information Content Industry by classifying IT enabled Services as tantamount to IT Software and IT Services in line with the approved policy of Government of India.
• The State Government would encourage flow of investments including FDI and would provide full support wherever required. The State Government will offer customized package of incentives for prestigious investment proposals, e.g., projects where total investments are more than Rs. 10 Crores or a Fortune 500 company is implementing the project. All such proposals shall be received by BIP and would be put up to Board of Infrastructure Development & Investment Promotion for approval on case-to-case basis on merit. Before putting up the case to BIDIP recommendations of Directorate of Information Technology (DoIT) will be obtained.
• The State FIs will provide term loans and equity on priority to units at a reduced rate of promoter's contribution that will not exceed 30% of the total project cost considering merit of the case.
• The State FIs will consider security margin of 30% of the total assets on case-to-case basis.
• 12. Software industries will be treated as industrial (and not commercial) consumers and electricity tariff applicable to the industrial consumers will be levied on such industries.

Special land package to It industries in IT parks/ designated IT Zones

• Very Prestigious Investment - in IT Software, ITES and IT Hardware - For the industry which is set up on the allotted plot by any company with a minimum fixed investment of Rs. 10 crores or by a fortune 500 company, within a period of 3 years, entitled land rebate shall be @ 60% of the plot allotment rate.
• Prestigious Investment - in IT Software, ITES and IT Hardware - For the industry which is set up on the allotted plot with a minimum fixed investment of Rs. 1 crore within a period of 3 years, entitled land rebate shall be @ 50% of the allotment rate for the plot upto maximum of 5 acres area.
• General Investment - in IT Software, ITES and IT Hardware - For the industry which is set up on the allotted plot with a minimum fixed investment of about Rs. 10 lacs per 500 sqm. land and Rs. 2 lac for every subsequent 100 sqm. within a period of 3 years, entitled land rebate shall be @ 25% of the allotment rate for the plot upto maximum of 2000 sqm. area.
• Advanced IT Institutes- For the institute which is set up on the allotted plot with a minimum fixed investment of Rs. 5 crores within a period of 3 years, entitled land rebate shall be @ 25% of the allotment rate for the plot upto maximum of 5 acres area.
• Advanced IT Institutes would mean institutes offering exclusive IT courses at least of the level of MCA /BE / M.Tech (IT) /MBA (IT) /MSC (IT) or of a recognized equivalent.
• General Computer Training Institutes- No rebate in the allotment rate shall be allowed. However, RIICO may consider land allotment upto maximum of 2000 sqm. On prevailing rate provided unit makes fixed investment of about Rs. 5 lacs per 500 sqm. land within 3 years period.

Notes-

a) Production activities will need to be started within three years from the date of possession or from the date of lease deed execution, whichever is earlier.

b) The minimum fixed investment should be made within 3 years from the date of possession or from the date of lease deed execution, whichever is earlier.

c) An undertaking / certificate shall also be submitted by IT unit every year for the use of land for the purpose the land is allotted.

d) Fixed investment shall mean investment in land, building, computers, printers, scanners, plotters, licensed software's, EPABX, networking equipment, UPS, DG-Sets, CVT"s, AC, LAN Cable and other equipment and furniture.

e) In case of failure to observe the terms and conditions regarding investment and time schedule mentioned in the package, the concessional amount shall be recovered from allottee with interest from the date on which concession amount has been reimbursed.

f) In each case the decision of RIICO shall be final as to what qualifies as IT Industry/ Institute for the purpose of above said incentive.

g) For reimbursement of the concessional amount, the plot allottee would be required to inform RIICO office by a registered AD letter sent prior to the scheduled date regarding the building construction. After verification by the Unit Head, the Cheque or rejection letter, as the case may be, will be sent by RIICO within 30 days by registered AD letter

Incentives Available for Establishment of Tourism Industry

State government has declared tourism as an industry and has designed a lucrative investment package to promote the tourism industry.

I) The following incentives will be available to the new tourism units such as hotels and lodging houses

The prescribed authority, under the new Rajasthan investment promotion policy 2003, shall grant the following exemptions. The following exemptions will be available between the period of July 2003 to 31st March 2008.

• Exemption in Luxury Tax: 100 percent exemption of luxury tax for a period of seven years
  
• Exemption in Stamp Duty: 50 percent exemption in stamp duty for a period of seven years
  
• Other Incentives
  • 50% exemption of entertainment tax for seven years.
    
  • 50% exemption of electrical duty for seven years.
    
  • 50% exemption from conversion charge; and/or
    
  • 50% exemption from mandi tax for seven years
    
• Interest Subsidy to Tourism Units such as Hotel, Motel etc.: 5% Interest subsidy and wage/ employment subsidy would be made available to eligible investor during the operative period of the scheme. An additional interest subsidy of 1% shall be made available to SC/ST entrepreneurs.

II) Allotment/ conversion of land to tourism industry

• Under the Rajasthan Land Revenue (Conversion of agriculture land for non agriculture purpose) rule (1992), no land use conversion charges will be paid for establishment of tourism units up to the land of 2000 sq. mts. subject to the condition that 100% unskilled workforce will be employed from the local area.
  
• Under Rajasthan Land Revenue (Industrial area allotment) rule 1959 allotment of Govt. Agriculture Land up to 4 bigha in Rural Area on payment of 25% of the reserve price of the prevailing market price in the concerned area subject to the condition that 100% unskilled workforce will be employed from the local area.
  
• For Heritage Hotels in Rural Areas no land Conversion Charge are taken. In urban areas conversion charge are levied under the provisions of Rajasthan urban improvement trust rules 1974 on built up areas only.
  
• For Tourism units conversion / allotment of land is being done under Rajasthan Land Revenue (Industrial area allotment) rule 1959 and Rajasthan Land Revenue (Conversion of agriculture land for non agriculture purpose) rule 1992 on Industrial rates. (Other than point no. a & b above)
  
• Under Rajasthan Development Trust (Urban Land) rule 1974 - rule 15 & 15B tourism projects to be established in Rajasthan, the Land will be allotted on rates and basis of following investment: -

III) New Multiplex Cinema Halls, Drive in Theatres/ Cinemas

Films which have been 75% picturised in Rajasthan and having U- certificate are 100% exempted from Entertainment Tax (including additional Entertainment Tax) for one year from the date of its first exhibition.

For new Multiplex Cinema Halls, Drive in Theatres/ Cinemas in Rajasthan are exempted from Entertainment Tax for 3 years from the date of Commencement of their commercial exhibition as follow.

1. 75% for First Year,
2. 50% in Second year, and
3. 25% in Third Year.

Investment Opportunities

• Stone Sector
  
  • Job-work processing of imported marble & re-exports
    
  • Stone-craft items - Buy Back agreements and Technology transfer
    
  • Production facilities for consumable: Collaborations, joint ventures,
    
  • Joint venture for mechanized quarrying
    
  • Production of machinery: Collaborations, joint ventures, technology transfers
    
  • International marketing tie-ups for purchase of stones from Rajasthan
• Information Technology and IT enabled Services
• Bio Technology (BT)
  • Research and development in the cattle species improvement programme and Biotechnology incubation centers
    
  • Bio-pesticides and bio-fertilizers
    
  • Genetic improvement of seeds
    
  • Genetic improvement of animal breeds
    
  • Dry farming
    
  • Treatment of industrial effluents
    
  • Recycling/recovery of bio-products
    
  • Waste management
    
  • Bio fuels/energy
    
  • Industrial enzymes
    
  • Fermentation products for better yeast
• Agro Based Industries

  The agro and food processing sector offers scope for development of several industries such as solvent extraction, oleo- resins, kinnow/ orange juice, malt extracts, floriculture and a host of other items. Besides these, items like mushrooms, tomato processing, other processing industries based on mango, ber, pomegranate and other vegetable like onion, potato, garlic. Industries based on herbal and medicinal plants, sheep, goat, buffalo meat processing, poultry and poultry products and non-edible oil processing industries have bright export prospects. The state government on its part, is alive to the needs of this sector with regard to training, technology upgradation, improvement in infrastructural facility and a progressing Government policy with these measures, along with support from central government and the coordinated efforts of various institutions working in the filed of agro and food products. It is expected that this industries with come to occupy its due place in the agro industrial development of Rajasthan.

• Power Sector
  
• Education Institutes
• Urban Infrastructure
  
• Tourism Sector
  
• Handicrafts
  
• Gems & Jewellery
  
• Automobiles
  
• Garments and Textiles
  
• Road & Bridges

Useful Weblinks

Government of Rajasthan

Rajasthan State Industrial Development & Investment Corporation