Out to make Haryana a thriving hub of the globally competitive aerospace and defence manufacturing industry, the Manohar lal Khattar Government has come out with its draft Aerospace and Defence Policy 2017 to provide investors with an enabling eco-system in the State.
Stitched with the warp and woof of incentives and concessions, the policy seeks to provide investors the vision and mission of making Haryana a prominent aerospace and defence manufacturing hub and preferred Maintenance, Repair and Overhaul (MRO) and Fixed Base Operator (FBO) destination in the Asian region, said a spokesman of the Civil Aviation Department.
The policy aims at attracting investment of Rs 25,000 crore, creating direct employment for 32,000 people by 2020,and increasing the share of industry in Gross State Domestic Product (GSDP) from 27 per cent to 32 per cent by leveraging the A and D sector. It also aims to attract 50 per cent by value of MRO activities the market size of which in India is estimated to be around US$ 700 million.
The draft policy provides strategic direction for development of this sector in Haryana in the next five years. Suggestions have been invited from various stakeholders which would be duly factored in while cobbling up the final policy, said the spokesman.
The concessions and incentives offered would include land at concessional rates, reimbursement of stamp duty and registration charge paid on sale or lease deeds on first transaction, exemption from open access charges up to Rs 1.77 per unit of power for five years besides subsidy on the cost of land, building plant and machinery.
The spokesman said the policy objectives aimed at attracting orders for at least 15 per cent of all offset obligations discharged by companies in India by leveraging the existing ancillary base, and promoting new micro small and medium enterprises (MSMEs) dedicatedly for the A and D sector.
It also seeks to attract 10 per cent by value of the orders in defence industry in India by attracting investors to set up mega and ultra-mega anchor units and attract investment of over Rs 25,000 crore throughout the value-chain, including research, design, development, manufacturing, maintenance, quality control and training, he said.
The State Government’s endeavour would be to create world class infrastructure to provide an enabling ecosystem for the upcoming units, he said.
Under the policy, it is proposed to set up a world class MRO as part of Hisar Aviation Hub. This would be a state-of-the-art facility to provide full aircraft base maintenance services which would also cater to the maintenance needs of regional and global airline customers. The state would incentivise the units setting up operations in the earmarked cluster or hub.
Facilities of MRO and FBO would be built in the upcoming Aerospace Park in Hisar on public private partnership model where players with expertise in MRO, FBO and ware-housing would be invited to participate, the spokesman added.
The policy also proposed that mega units would be given preference in government land allotment. Ten per cent concession would be given for land in Gurugram district, whereas 25 per cent concession would be given for land outside Gurugram district. land would be made available by the HSIIDC, HUDA and the State Government on a long lease of 33 years with annual increase of five per cent further extendible by 33 years.
Aerospace and defence units would be eligible for reimbursement of stamp duty and registration charge paid on sale or lease deeds on first transaction. While there would be 100 per cent reimbursement for units investing in districts outside Gurugram, it would be 30 per cent for units investing in district Gurugram, stated the policy.
Referring to the power subsidy, the policy proposed that all units would be eligible for exemption from open access charges up to Rs 1.77 per unit for five years. Besides, graded interest subsidy would be provided for the projects outside district Gurugram at different rates specified for this purpose.
Total 100 per cent exemption in electricity duty would be provided for a period of 10 years to the units producing captive power. However, the exemption would be limited to the power consumed for its own operation only, it stated.
Apart from this, all units would be allowed reimbursement to the extent of 100 per cent of the net value added tax or central sales tax or state goods and services tax paid, for a period of 10 years or up to the realisation of fixed capital investment whichever is earlier.
Similarly, freight subsidy of 100 per cent would be given for the export of components or products being manufactured in designated aerospace and defence park or cluster or zone, the policy said.
Also, three aviation training centres at Hisar, Karnal and Pinjore would be leveraged and Aerospace University would be located nearby. There would be zero VAT for MRO activities for 10 years.
Under the new policy, airport royalty and additional charges would not be levied on MRO service providers for a period of five years. In addition to this, the State Government would reimburse this charge for further five years.