Why Industrial Policy for NWFP?

With more than 700 units closed or sick and less than 60,000 people employed in the industrial sector: with the withdrawal of the Gadoon incentives and the changing international situation, it was a high point for the provincial government to adopt measures for he revival of sick units and create conducive environment for growth of industries.

After continuous interaction with the private sector especially Sarhad Chamber of Commerce and Industry, it was felt that the provincial government has to come forward for the relief and facilitation of the industrial sector.

In order to offset the location disadvantage some of the areas, which became part of the industrial policy, were considered crucial for rapid industrialization of the province.

In keeping with the new international realities and considering the private sector as engine of growth, the provincial government has embarked on a policy of facilitation.

It is evident that there is much more potential in the industrial sector of the province than has been exploited so far. The main resources of the province i.e. tourism, minerals and hydropower are yet to be fully tapped.

The present initiative of the provincial government will create the necessary atmosphere for an enabling environment to attract both local and foreign investment.

Salient Features of the Industrial Policy NWFP 2005

1.   5 years exemption from property tax in the Industrial Estates and for new industries.
2.   Exemption from labour inspections after compliance of labour laws.
3.   Exemption from Education Cess for Industrial Units.
4.   A new tiered-policy for ESSI contributions.
5.   Formation of Industrial Facilitation Council and Committee.
6.   25% rebate in electricity consumption for a period of three years to new selected Industries.
7.   Provision of 10MW cheap electricity from Malakand Hydel Power Project-III to be provided to selected Industrial units to be provided to selected Industrial units to be set up in Malakand Industrial Estate.

Industrial Policy NWFP 2005

1.   Property Tax

The Government of NWFP has decided to exempt the Industrial Units in the Industrial Estates of NWFP from the imposition of provincial property tax for a period of five years. Similarly all new units that will be set up in the NWFP will also be exempted from payment of property tax for a period of five years.

All arrears due from the Industries in NWFP have been waived off.

This relief is the most important step of the government to create a competitive environment for Industrial growth in NWFP.

2.   Labour Inspections

The Provincial Government is already pursuing investor friendly Industrial Policy. In order to provide a healthy and conducive environment to the industries, it has been decided to do away with the unnecessary labour inspections. Any Industrial Unit which ensures compliance of the labour laws (by filling a proforma to be provided by the Directorate of Labour) will be exempted from labour inspections for a period of three years. Further exemptions can also be obtained in the same manner. The units will, however, provided their production figures and other details to the Directorate of Industries and Labour every year.

3.   Education Cess

In order to facilitate the Industries and reduce the number of taxes that they have to pay, the provincial government has decided to exempt the Industrial Units in NWFP from the payment Education Cess which is recovered by the Worker’s Children Education Board.

4.   Employees Social Security

To provide further relief to the Industries in NWFP, it has been decided to introduce a tiered system for collection of the ESSI cess.

The Industrial Units will have the option to opt for the tiered-system as under:-

          No. of Labour  Amount

a)     1 to 10 employees                       Rs.10,000/- Per Annum
b)     11 to 20 employees                     Rs.20,000/- Per Annum
c)      21 to 50 employees                     Rs.50,000/- Per Annum

Units employing 51 or more persons will submit a simple declaration on monthly basis along with contribution.

5.   Industrial Facilitation Council and Committee

The Provincial Government has decided to set up an Industrial Facilitation Council to be headed by the Chief Minister, NWFP. This council will have members from both the public and private sectors. It will work as the apex body for facilitating investment in NWFP and will take high level decisions to address the problems of the Industrialists.

The Industrial Facilitation Committee under the Chief Secretary NWFP will meet more frequently to settle the problems of the Industrialists.

6.   25% Rebate in Electricity Consumption

The Government of NWFP has decided, in principal, to provide upto 25% rebate for a period of three years in electricity consumption to selected new industries.

The eligibility for the rebate will be determined by a high level committee having representation from the private sector.

7.   Malakand Hydel Power Project-III

10 MW Cheap electricity from Malakand III Hydle Power Project has been reserved fro selected new Industries to be set up in the Malakand Industrial Estate.

The modalities for eligibility will be determined by a high level committee with representation from the private sector.