Hyderabad|India: The new AP Electronic Hardware Policy--2012-2017 released by the Chief Minister Mr N Kiran Kumar Reddy stipulates that the State will allocate 20 per cent of order value in Government-promoted projects in electronic hardware to the small and medium enterprises. The Chief Minister said that there are many incentives in the new Policy.

According to the AP Electronic Hardware Policy--2012-2017 released at the inaugural session of IT Summit Advantage AP 2012, many incentives would be offered to both start-ups and existing units. The State Government will extend the start-ups and micro enterprises a 10 per cent subsidy on capital equipment for technology up-gradation besides 25 per cent subsidy on lease rentals of up to Rs.5 lakh a year for three years. Besides, in tier II locations including Visakhapatnam, Vijayawada, Warangal, Tirupati and units located close to seaports, 100 per cent reimbursement of stamp duty, transfer duty and registration fee paid on sale/lease deeds on the first transaction would be offered.

Besides extension of industrial power category tariff, a power subsidy of 50 per cent to micro, 40 per cent to small, 25 per cent to medium and 10 per cent to large scale industry units is offered on power bills for a period of five years from the date of commencement of operations. The electronics industry adds the most value among all manufacturing industries and generates massive indirect employment in the ratio of 1:6 for every employee. The Department of Information and Communication Technology has been aggressive in pushing the cause of the electronic industry. Last year the government shifted the subject under ICT from the Industries Department.

In line with the ICT Policy 2010-2015 initiatives in force for the promotion of IT/ITES Industry - in order to have specific focus on the promotion of Electronic hardware sector - a comprehensive mention of all the Incentives and facilitation initiatives are proposed now which will be in force for a period of 5 years from the notification of the Electronic Hardware Policy 2012-2017.

General Incentives of ICT Policy automatically applicable to all in the Electronic hardware Industry: Electronic Hardware Industry units are regulated and governed as per the provision of the Air Act, Water Act, and E(P) Act 1986. The Electronic Hardware Industry companies are exempt from the purview of statutory power cuts on similar lines of IT/ITES Industry; Electronic Hardware Industry is exempt from inspections/ certifications under the following Acts and the Rules administration by the Labour department framed there under, barring inspections arising out of specific complaints.

The Electronics Industry (units) are permitted to file self-certificates, in the prescribed formats. General permission on similar lines of IT/ ITES Industry for three shift operations with women working in the night for Electronic Hardware Industry and Electronic Hardware Industry is declared essential service under AP Essential Services Maintenance Act.

Common Incentives for all Electronic hardware companies would be: 100% reimbursement of stamp duty, transfer duty and registration fee paid on sale/ lease/deeds/mortgages & hypothecations on the first transaction; 50% reimbursement of stamp duty, transfer duty and registration fee paid on sale/ lease deeds/mortgages & hypothecations on the second transaction; Admissibility of Industrial Power category tariff; 50% to micro, 40% to small, 25% to medium and 10% to large-scale industry limited to Rs.30 lakhs Power Subsidy on power bills for a period of 5 years from the date of commencement of commercial operations;

Other common incentives are: Reimbursement/Grant of 50% exhibition subsidy for participating in national/international exhibitions limited to 9 sq.m space and 20% investment subsidy limited to Rs.20 lakhs for micro & small industries and an additional 5% incentive subsidy for women, SC, ST entrepreneurs. 30% interest rebate limited to Rs.5 lakhs per year for 5 years, 10 % subsidy on capital equipment for technology upgradation, 50% subsidy on expenses incurred for quality certification limited to Rs.4 lakhs (Conformity European(CE), China, Compulsory Certificate (CCC), UL Certification, ISO, CMM Certification, SA, RU etc.), 25% subsidy on cleaner/green production measures limited to Rs.10 lakhs, 100% tax reimbursement of VAT/CST or CGST, for new units started after the date of issue of this policy, for a period of 5 years from the date of commencement of production for products made and sold in AP, 25% rebate in land cost limited to Rs.10 lakhs in industrial estates, industrial parks, SEZs, hubs, parks & clusters, 50% reimbursement/grant of cost involved in skill up-gradation and training local manpower limited to Rs.2,000 per person.

Specific Incentives to Focus Areas in Electronic Hardware Sector are: Allocation/reservation of 20% of order value to electronic hardware SMEs in State Govt., promoted projects and Sector Specific Incentives are: Various segments in the electronics hardware sector need to be promoted to enable them to compete with the global markets as well as domestic consumption. Keeping this in view, specific incentives are offered to focus areas in the electronics hardware sector. Allotments of government land to the electronic hardware industry are made subject to availability, fulfillment of certain eligibility criteria by the applicant company, and on payment of land cost and development cost, as determined from time to time by the allotment agencies, i.e., APIIC/HMDA and the concerned local statutory authorities.

The State Government will create a nodal wing within IT&C Department in line with the Single Window Act, 2002 which will act as a single window to deal with Customs/Excise and other State and Central Government agencies. The agency will also liaise with the Department of Information Technology (DIT), Government of India for expediting the release of Special Incentive Package Scheme (SIPS) applicable to mega projects of national importance.

Government of Andhra Pradesh will also strive to implement the recommendations made by the National Skill Development Programme (NSDP) and State programmes such as REECAP and REEMAP. It will create an institutional mechanism similar to JKC which will coordinate with engineering colleges, ITIs etc. to implement NDSP, REECAP and REEMAP recommendations. The State Government will set up New Electronic Hardware Park in 150 acres with options of SEZ and non-SEZ giving greater discretion to Electronic Hardware industry. State-of-the-art in infrastructure with all basic amenities such as internal roads, water, power and other common facilities will be made available to the investors. The State Government will encourage units using Renewable Energy. Units using renewable source of energy with minimum 40% of their power requirements coming from renewable sources for their operations and manufacturing will be eligible for additional incentives such as Electricity Tax exemption for 5 years. The State Government will also explore opportunities of tying up with major electronic clusters located globally to give Marketing and Technology access to local electronic design and manufacturing companies based in Andhra Pradesh.

-June 2012