• How-to

With state domestic product of Rs.1,80,000 crore, West Bengal accounts for nearly 4.5 percent of Indian’s industrial production and contributes 16 percent to India’s GDP. Low cost of labor, low attrition rate and several government incentive schemes are attracting investments and entrepreneurs to the state. It has also been ranked the best in terms of power supply on the basis of tariff, availability and quality.

Thrust areas
The government’s industrial policy has identified thrust areas for special attention—petrochemicals; electronics and information technology; iron and steel, metallurgical and engineering; textiles; leather and leather products; food processing, edible oil, vegetable processing and aquaculture; development of medicinal plants, rubber, palm oil and tea; manufacture of basic drugs, chemicals and pharmaceuticals; optimal utilization of minerals and development of mine-based industries; gems and jewelry; and the promotion of tourism and other tourism-related activities. Prohibited sectors include gambling and betting, lottery business, atomic energy and retail trading, except single-brand product retailing.

Helping hand
Bodies such as West Bengal Industrial Development Corporation (WBIDC) and West Bengal Electronics Industry Development Corporation (Webel)—which is specific to the IT industry—are agencies set up to provide aid and support to aspiring entrepreneurs.

In the last financial year, WBIDC disbursed loans worth Rs.1,132.9 million to 71 units. WBIDC takes care of most requirements such as financing, facilitating investment proposals through the State Investment Facilitation Centre (SIFC) and managing and operating state incentive schemes. It carries out financial functions by term loans to medium-scale industries and short-term loans to assisted units.It also runs an equipment refinance scheme for existing profit-making units and provides bridge loan against admitted incentive schemes.

SIFC, or Shilpa Bandhu, acts as a single-window body for setting up industries. It offers assistance in the following areas:
1. Approvals from the Secretariat for Industrial Assistance as well as Foreign Investment Promotional Board in the state
2. Filing of application for IEM, LOI and clearance from Foreign Investment Procurement Board
3. Power-related clearances
4. Registration by the Directorate of Industries
5. Identification and allotment of land and other infrastructural requirements
6. Guidance on investment prospects about WBIDC projects
7. Clearances from the West Bengal Pollution Control Board.

SIFC is also equipped with project profiles for nearly 200 projects in sectors such as downstream of petrochemicals, electronics and IT, iron and steel, textiles, food processing, leather, drugs, dyes, chemicals and pharmaceuticals.

The long and short of it
After project identification, site selection, preparation of project profile and company incorporation, there are initial clearances and approvals to be taken care of. Land acquisition and registration also includes mutation/conversion of land.

With preparation of a detailed project report, the project needs to be sanctioned for term loan as well as working capital loan. The implementation process covers procurement and installation of P&M, procurement of raw materials as well as recruitment of power, commercial production and applying for incentives.

Clearances and approvals
In the large-scale sector, the unit has to be registered with the Directorate of Industries and have an eligibility certificate from WBIDC. In the small-scale sector, the unit needs to be registered with the District Industries Centre of the Directorate of Cottage and Small Scale Industries and also have the WBIDC eligibility certificate.

Apart from DI registration and eligibility certificate from WBIDC, one also needs approval of factory layout, IEM/Industrial license/approvals, FDI clearance and Foreign Technology Agreement, trade license/NoC from municipality/panchayat, RBI clearance for import/export, preliminary clearance from financial institutes, registration/licensing from the Factories Act, Boiler Registration and Explosive license where needed and service tax registration.

Apart from these, SIFC’s facilitation services include sales tax matters, liaison with authorities providing telephone and telecom facilities, district civil and police authorities as well as customs and excise, Directorate General of Foreign Trade, Kolkata and Haldia Ports, the Kolkata airport and the Reserve Bank of India.

©Entrepreneur December 2010

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District Industries Centre of the Directorate of Cottage and Small Scale Industries, How-to, set up, Shilpa Bandhu, SIFC, WBIDC, Webel, West Bengal, West Bengal Electronics Industry Development Corporation, West Bengal Industrial Development Corporation