In the new industrial policy 2007 announced by chief minister M Karunanidhi yesterday, the government has said it would create a land bank of 10,000 acres over the next five years for industrial parks.

The policy aims to develop quality infrastructure including social infrastructure like skill development centres, housing, business centres, restaurants, financial services, schools and hospitals.

The government will also review and update its Tamil Nadu SEZ Act 2005 and Tamil Nadu SEZ Policy 2003.

According to the new policy, in order to have equitable regional development, proposals for special economic zones (SEZ) in industrially backward areas will be given priority.

The policy also stipulates that promoters of private industrial parks would be required to purchase land directly. The land for private parks / SEZs should, as far as possible, be barren, non-irrigated and dry land and the government will not allow proposals for industrial park involving more than 10 per cent cultivable land.

Under the new policy, all approved industrial parks are eligible for the Industrial Park Infrastructure Grant of Rs2 crore or 25 per cent of the investment in eligible fixed assets provided (a) the park is located 50km away from Chennai and (b) attracts at least 20 new manufacturing units providing direct employment to 2,000 people.

According to the policy, 10 per cent of the area in the new industrial parks promoted by State Industries Promotion Corporation of Tamil Nadu Ltd (Sipcot) and Tamil Nadu Industrial Development Corporation (Tidco) should be set aside for social infrastructure.

Similarly 20 per cent of the allot-able area in new industrial parks / special economic zones (SEZ) or expansion of existing ones promoted by the Sipcot / Tidco would be reserved for small and medium enterprises (SME) including SME vendors to major industries in the same park.

The new policy also provisions the setting up of a 2000 acre nano-technology park by Sipcot to house hi-tech manufacturing in semiconductor foundries, chip assembly and testing, opto-electronics, solar cell technologies and nano-technology.

The proposed Nanotechnogy Park will have both SEZ and domestic tariff area (DTA) zones.

The state by giving fiscal incentives encourages development of industrial estates/SEZs in industrially backward areas and more particularly away from Chennai, Tiruvallur and Kanchipuram districts.

Thrust on agro processing industries
In order to increase the farmer''s income the new policy gives thrust to food processing sector.

The state would promote agro processing clusters - meat and seafood (Ramanathapuram), poultry products (Namakkal), Turmeric (Erode), Sago (Salem), Bananas (Trichy), Mangoes (Krishnagiri) and others.

A comprehensive infrastructure development plan will be drawn up and implemented over five years to provide road and air connectivity to marketing centres, agro food parks and agri export zones.

The policy also states setting up of special agro economic zones for value added activities like food processing.

According to the new policy agro industries can also enjoy the same incentives given to manufacturing units in the state.

Spate of SEZs
Apart from the nano-technology SEZ, the Tamil Nadu government in its new industrial policy has announced setting up of several SEZs in the state.

" To promote engineering goods exports, the government has announced setting up of a 250-acre engineering goods SEZ near Coimbatore as public-private-partnership project.

" A foot wear SEZ with design centre and training facilities is being set up in Sriperumbudur by Sipcot on 150 acres.

" A leather products SEZ would be set up in the Chennai-Ranipet corridor by State Industries Promotion Corporation of Tamil Nadu.

" A specialised drugs and pharmaceutical cluster would be developed as a part of the Nanguneri SEZ.

" A pharma SEZ would be set up on the east coast with hi-tech environmental control systems to enable zero pollution.

" In order to attract auto component industries, the government plans to set up a SEZ near Chennai in about 300 acre.

" For the textile sector, the Tamil Nadu will shortly come out with a policy for integrated textile units.

Life sciences
The policy states the government would come out with a new Life Sciences Policy and Tidco will create a Life Sciences Innovation Fund.

Corridors of excellence
Under the new policy, Chennai-Manali-Ennore corridor and the Chengalpattu-Sriperumbudur-Ranipet corridor will be developed into industrial corridors of excellence with SEZs, industrial and IT parks, research and development institutions.

Similarly the Madurai-Thoothukkudi and Coimbatore-Salem corridors will also be developed.

The state government has requested the Ministry of Railways to take up early implementation of a dedicated freight corridor connecting Chennai with New Delhi.

Similarly the Tamil Nadu government wants the centre to operationalise soon the first container terminal in Ennore Port and multilevel car parking facilities at Chennai port.

Incentives galore
New manufacturing facilities set up in places other than Chennai, Thiruvallur and Kanchipuram with an investment in eligible fixed assets of over Rs250 crore in a period of three years would be eligible for structured package of incentives to be decided on case to case basis.

In the case of units set up in Chennai, Tiruvallur and Kanchipurm the investment limit is Rs350 crore.

According to the policy, new manufacturing facilities set up by an existing company in a new site or adjacent to its existing plant would be treated as a new unit for the purpose of incentives.

The incentives for project expansions will be decided on case to case basis. The investment threshold for expansions will be Rs350 crore for units in Chennai, Thiruvallur and Kanchipuram and Rs250 crore for units in other places.

For electronic units the threshold investment limit is lower at Rs250 crore in the case of units in Chennai, Thiruvallur and Kanchipuram districts and Rs150 crore for units in other places.

New of expansion manufacturing facilities with investments in eligible fixed assets over Rs1500 crore will be treated as super mega projects and eligible for incentives for over and above the normal structured package.

Developers of desalination plants for industrial parks/SEZ, dedicated railway projects, container terminals or ports for industrial parks/SEZs, high technology stand alone industrial research and development centres, new roads leading to industrial parks/SEZ, common hazardous waste treatment and disposal facilities for a industrial cluster and common effluent treatment plant- will be offered an industrial infrastructure subsidy of Rs2 crore provided the investment is of Rs300 crore in three years.

The developers of such projects are exempted from entry tax, tax on works contract and input taxes.

Additional incentives will be given to investors giving preference to local employment and follow the government''s policy on reservation.

Services sector
As the services sector is the second largest generator of employment potential after agriculture, the Tamil Nadu government has announced that it would identify the bottlenecks and remove the same.

For the construction sector a single window clearance system would be put in place for all major construction projects. An e-governance package will be developed.

A pilot construction cluster park will be set up for large construction industries as well as SMEs involved in related industries.

Developing skill sets
In order to address the problem of skill shortage the policy states that polytechnics in and around Chennai, Hosur and Coimbatore would be oriented for the automotive sector.

Similarly a group of polytechnics and industrial training institutes (ITI) around Chennai would be converted into special skill development centres for electronic hardware manufacturing in collaboration with industry.

A 10-year programme to harness the potential of education institutions in Tamil Nadu to generate high quality life sciences students will be developed involving academia, industry and overseas experts.

According to the new policy the government hopes to create an additional 20 lakh jobs by 2011 and raise the contribution of manufacturing sector to the gross state domestic product (GSDP) to 27 per cent from 21 per cent.

On the exports front, the state hopes to double annual exports to Rs.140,000 lakh crore.