Industrial Park Scheme – the embrace widens

It was not very long ago when the drawing-rooms of upscale, urban India echoed the sardonic, stale and cynical banter like “If you want to start a new venture or get an industrial plan/project expedited just go to the nearest Government Department…and then go off to a Rip Van Winkle sleep…because the Department would be sleeping too!” Of course this was an exaggeration but then like all satire, such self-deprecatory humour had more than a little ring of truth to it.

Indeed we have come a very long way from the strangle-hold of the ‘license-permit-quota-raj’ where the ‘babu-dom’ tried every trick in the book to thwart or at least delay economic enterprise in the country. Refreshingly, the new watchwords are ‘Enable’ ‘Empower’ and ‘Facilitate’ Industry-(manufacturing as well as other sectors). The latest step forward in this direction is the notified amendments dated 2nd July 2008, issued by the Central Board of Direct Taxes (CBDT) to the Industrial Park Scheme 2008. (Refer sub-section (4) of section 80IA, IT Act1961) According to the amended scheme, the ambit of “industrial activity” has been expanded to include three additional types of industrial activity viz. (i) Research and Experimental development on natural sciences and engineering as defined in section K, division 73, group 731 of the National Industrial Classification, 2004 Code, issued by the Central Statistical Organisation, Department of Statistics; (ii) Development of computer software; and (iii) ITES covered under notification S.O. 890(E),dt.26th September 2000 (pertaining to sections 10A, 10B and 80HHE of the IT Act)

Moving ahead in this direction, the amendments provide for further easing the eligibility under the scheme through the following:

• a reduction in the minimum constructed floor area requirement from the earlier 50,000 to the current 15000 sq. metres;
• the area allocated or to be allocated to industrial units reduced to 75% of the allocable area (from earlier 90%); and
• Provision to allocate area for commercial activity with a cap of 10% of the allocable area.

The original scheme was notified on 8th January 2008.