Sops to four firms to lure more

Sops to four firms to lure more

Govt set to grant special incentives to showcase State as investment destination

Sops to four firms to lure more

The State government is all set to grant special incentives in the form of concessions to four major companies that have set up shop in Karnataka, in a bid to seem investor-friendly besides attract more investors.

The companies – Tata Motors, Dharwad; Nestle, Nanjangud; MRPL, Mangalore; Associated Décor Ltd, Kolar - which had signed MoUs with the State government in 2010 during the Global Investor’s Meet - have sought relief in VAT, land rates, fuel prices, etc.

These companies have sought the incentives as they will be making more investments. It is learnt that Hero Moto Corporation, which too had sought special incentive/concessions, may not be accommodated by the government. A final decision in this regard will be taken by the Cabinet sub-committee on Saturday.

The committee, which has already considered grant of incentive in the form of ‘deferment mode,’ is likely to decide the percentage of deferment at the meeting. According to officials, a company paying a VAT of 14.5 per cent annually, amounting to several hundred crores of rupees, will remit the entire amount to the Commercial Taxes department, and then appeal to the government to give it an incentive in the form of concession.

The government will return to the company a certain percentage of the amount, which the owner will have to repay in instalments within the stipulated time. This way, the working capital of the company will be reduced, while the government earns in the form of employment generation and an increase in local consumption of the product.

Officials said the companies have been considered because they are “global brands apart from being cash surplus companies with continuous growth plans”.

They said the government had given the companies an assurance that they would get a special incentive if they invested in the State during GIM I. By granting the special incentive, the government aims to send a message to new investors, besides showcasing Karnataka as the preferred destination for investments.

Chief Minister D V Sadananda Gowda, on Monday morning, chaired a meeting to discuss the matter, after which he told reporters that no consensus had been arrived at.

“Five companies have sought incentives. The matter is under consideration,” he said. Industries Minister Murugesh Nirani refused to comment on the subject in view of the model of code of conduct.

Officials said the four companies were considered also because they had met the targets. Tata Motors, which had signed an MoU for Rs 2,044 crore, has invested Rs 1,500 crore so far; Nestle has invested all of Rs 320 crore; MRPL, which had signed an MoU for Rs 15,798 crore, has completed its investment; while Associated Décor Ltd is said to have invested around 90 per cent of the amount for the Rs 495-crore project.

The cabinet sub-committee headed by the chief minister comprises the small scale industries minister, medium and large scale industries minister and the labour minister as members.

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