Vijayawada: The state government has finally taken a decision to release Rs 955.41 crore towards industrial incentives and subsidies against pending Rs 1,800 crore.
The Industries department had to pay around Rs 1,800 crore towards incentives to entrepreneurs last year itself. However, the government kept mum on the same till now.
Keeping in view the election year and also growing resentment from the industry, the government has taken this decision to release half of the pending incentives.
Following the delay in sanctioning of incentives, entrepreneurs and industrialists were disappointed a lot. Meanwhile, the Vigilance department has started the exercise of finding out the root cause for the diversion of those funds.
Opposition YSR Congress and Congress had leveled allegations over diversion of funds related to incentives during the last Assembly sessions.
In order to encourage setting up of industries in the state, the state government has announced several incentives in the form of subsidy in capital investments, full discount on stamp fee to be paid to the registration department, full discount on mortgage fee, and discounts in sales tax and power charges to the entrepreneurs.
Several NRIs had expressed interest to set up industries and units in the state, following the incentive support from the government.
But following drastic cuts in the budget allocation, the Industries department is not in a position to address incentive needs of entrepreneurs, a senior bureaucrat in Secretariat told this newspaper.
Applications routed through the state government for incentives would have to be cleared by the Industries department.
Ironically, due to poor allocation of funds in the budget — Rs 273 crore — to meet this expenditure for the year 2016-17, the Industries department was able to address the incentives’ needs of 1,200 applicants only.
The department cleared around 7,700 applications before March 15, for which it needs to pay Rs 1,090 crore to the applicants. “But, the department’s financial condition is too bad and we cannot spend even a single penny anymore towards incentives,” a senior rank officer of the Industries department said.
