New Delhi: In an attempt to attract investments, Capt Amarinder Singh-led Punjab government on Monday announced industrial power tariff at Rs5 per unit.

The announcement, as part of Punjab’s new industrial policy, comes at a time when the centre and states are working for electricity tariff slab rationalization to make them uniform across the country. This will help in reduction of cross-subsidies borne by the industry, and make tariffs more competitive for businesses thereby pushing the government’s “Make in India" drive.

“In order to boost industrialization and revive economic activity in the state, the Punjab Cabinet today approved the new Industrial and Business Development Policy-2017, paving the way for fixing of industrial power tariff at 5 per unit w.e.f (with effect from) November 1," Punjab chief minister’s office said in a statement on Monday evening.

Electricity has been used as a sweetener by various state governments to kickstart industrial activity. For instance, subsidized electricity is being offered as part of the industrial policy announced by Yogi Adityanath-led Uttar Pradesh government in July allowing electricity duty exemption.

“A Cabinet meeting, chaired by chief minister Capt Amarinder Singh, put its stamp of approval on various important salient features of the policy, including provision of fixed tariff for five years to the existing and new industries," the statement added.

The Punjab government’s move comes in the backdrop of India’s clean energy tariffs reaching a record low. While wind power tariff fell to Rs2.64 per unit in an auction conducted by state-run Solar Energy Corp. of India earlier this month, India has also witnessed record low solar tariffs of Rs2.44 per unit in May which firmed up to Rs2.65per kWh in an auction conducted by the Gujarat government last month.

Experts lauded the initiative.

“This has been contemplated for some time in Punjab with a view to attract industry and provide tariff predictability and stability," said Anish De, partner at infrastructure and government practice at consulting firm KPMG in India.

The other highlights of the new Industrial and Business Development Policy are a one-time settlement of industrial loans taken from the Punjab State Industrial Development Corp., the Punjab Financial Corp. and the Punjab Agro Industries Corp. Ltd and a Rs100 crore fund to promote start-ups.

“While the manufacturing thrust sectors include e-vehicle, medical equipment, apparel, footwear, electronics, food processing industries, aerospace and defence, and biotechnology, among others, the service industry thrust sectors identified by the government are IT and ITES, life sciences, skill development centers, healthcare, tourism and hospitality, media and entertainment, as well as logistics," the statement added.

After coming to power in March, Amarinder Singh has been trying to attract investors from India and overseas. China’s Zhuhai Yinlong New Energy Ltd plans to set up an electric vehicle manufacturing plant in Punjab, Mint reported on 5 July.

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