Jharkhand Automobile & Auto Component Policy, 2016- JPSC/JSSC

JHARKHAND AUTOMOBILE & AUTO COMPONENT POLICY, 2016

The automobile industry currently is the sunrise industry in the non-core sector. The automobile industry in India accounts for 22% of the country's manufacturing GDP. This is a major sector generating direct and indirect employment. Jharkhand is one of the leading states of the country in respect of the automobile industry. The leading automobile company of India Tata Motors is located in Jamshedpur (Jharkhand) where commercial vehicles are being produced right from the 1950s. At present, Tata Motors is one of the major companies in the world producing commercial vehicles and is one of the top 3 companies producing passenger vehicles in India. There are more than 600 auto and ancillary industries running in Jamshedpur-Adityapur Industrial Cluster.

All kinds of auto-grade steel are being produced in Jamshedpur since the 1980s and all necessary infrastructure facilities are available for auto ancillaries in the Jamshedpur-Adityapur region. Tata Steel & Bokaro Steel under SAIL (Steel Authority of India Ltd.) are major steel producing plants in the state and new steel plants like Electro Steel & Jindal Steel are in the process of being commissioned; steel required by the automobile industry will be provided by all of them.

Jharkhand has a favorable environment for the establishment of auto & auto-components industries, like:

• Availability of raw materials

• Large market of South-East (SE-Asia)

• Production of CR sheets by Tata Steel & Bokaro Steel Plants.

• Large-scale production of engineering goods in Jharkhand by Usha Martin, Timken, Cummins, TRF, Tinplate, HEC, Indal, ICI, TAYO, etc.

• Proximity to Kolkata-Haldia ports facilitating exports.

Considering the above advantages, 

The Jharkhand Automobile & Auto-Component, 2016 has been implemented to create a favorable atmosphere for the automobile industry in the state. The Policy aims to develop infrastructural facilities, create skilled manpower and encourage capital investment and technology upgradation for this industry. 

The main objectives of the Jharkhand Automobile & Auto-Component Policy, 2016 are as follows:

• To develop Jharkhand as the preferred destination for the automobile & auto-component manufacturing units in Eastern India.

• To generate additional employment opportunities for 50,000 personnel in this sector by 2020.

• To establish mega automobile projects in the state, establish new auto-cluster and expand the capacity of golf auto-cluster.

• To encourage the establishment of Tier-I, Tier-II, and Tier-III auto-component units in the stage.

• To identify the gaps in existing infrastructure.

The policy shall remain in force for 5 years i.e. until 2021. The policy covers the following automobile and auto-component manufacturing units located in Jharkhand:

• Automobiles
• Earthmovers & mining and construction vehicles
• Tractors and other agricultural utility vehicles
• Defense vehicles
• Railway equipment, wagons, and coaches
• Tier-I, Tier-II, and Tier-III auto components.

The following manufacturing organizations have been treated as eligible under the Policy:

• Proprietorship firm
• Registered proprietorship firm
• Private limited company
• Limited liability registered partnership firm

A long-term strategy has been drawn up for an expansion of the Jharkhand automotive sector. Availability of land with close proximity to road and rail networks has to be ensured. Emphasis is being placed on developing a new Auto Vendor Park. A new unit of Auto Cluster at Adityapur is being developed as a new Auto Vendor Park in Jamshedpur. World-class engineering and machinery goods are produced by the automotive industry and arrangements are being made to supply cheap and quality power for the same. Facilities are being developed at Adityapur Auto-Cluster for state-of-the-art testing for world-class components and vehicles. In this regard, a branch of the Automobile Research Association of India (ARAI) shall be opened in Adityapur Industrial Area. Solid waste and effluent treatment plants have been set up in Adityapur Auto Cluster and the hazardous waste management facility is under development.

The Jharkhand Automobile & Auto-Component Policy, 2016 also provides for fiscal incentives. Provisions have been made for financial assistance of 50% for the establishment of Auto Cluster, Auto Vendor Park, and Automotive Parts Distribution Centre. This 50% shall be based on capital costs towards building construction and common infrastructure and shall be limited to a maximum of Rs. 20 crores. 

• Manufacturing units shall be given 100% CST concession for 10 years. 

• New small & micro-units will be given incentives of 80% of the Net VAT for 5 years. 

• New large units will be given incentives of 75% of the Net VAT for 7 years.

• New mega projects will be given incentives of 70% of the Net VAT for 12 years.

• 100% exception from electricity duty will be provided for 10 years from the date of commencement of production.  

Provisions have been made for benefits to micro and small units under this policy in accordance with the Jharkhand Export Policy, 2015.

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