Madhya Pradesh becomes first state to formulate defence products investment policy

On 5th November 2014, Madhya Pradesh state government approved its ambitious Defence Products Investment Policy. Madhya Pradesh has become the first state to formulate such a policy in the country. The cabinet meeting was chaired by Madhya Pradesh Chief Minister Shivraj Singh Chouhan.

Key facts of the policy

  • This policy will help those investors who are willing to invest Rs 500 crore or more for setting up public and private sector defence manufacturing units near Katni, Itarsi, and Jabalpur.
  • 50-acre undeveloped government land will be provided and even land belonging to the closed down and sick units would be purchased for setting up defence equipment manufacturing units.
  • Subsidy will be provided for creating infrastructure and dedicated escort officers would be provided for special units, besides offering a special package to those units making a permanent investment of Rs 500 crore.
  • Besides, vendor units of defence manufacturing plants will be allotted land on sub-lease. Facilities like mother units will be provided to vendor units of big industries if vendor units sell 75 per cent of their products to mother units.
  • Subsidy: Provision for providing subsidy for transporting goods and raw material to and fro the ports.

Under the policy, 50 per cent subsidy will be given on expenditure on power, water and road infrastructure to be created on undeveloped land by defence equipment manufacturing units.

  • Units making permanent investment of Rs. 500 crore will be exempted from entry tax and 2 years exemption from power tariff. They will be given benefits under investment promotion assistance scheme.
  • Road and power to these units will be developed and made available by government.
  • Stamp duty will be reimbursed on purchase of closed, sick or acquired units for setting up defence manufacturing units.



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