The government of Chhattisgarh has introduced a new industrial policy to provide a special incentive package for investment in mega and ultra-mega projects in the sponge iron and steel sector. Under this policy, new units starting commercial production with a long-term capital investment of INR 100 crore will be eligible for economic investment promotion.
To avail the benefits of this new policy, it is mandatory for proposed units to start commercial production on or before October 31, 2024.
Also, the region-wise subsidy limit has been increased from 60% to 150% for the sponge iron and steel sector, and an investment incentive of a maximum of INR 500 crore, and for Bastar, INR 1,000 crore, has been offered.
At the time of writing this news, INR 35,000 crore worth of memoranda of understanding (MoUs) have been signed so far under this policy.
Bhupesh Baghel, the Chief Minister of Chhattisgarh, said the plants will source raw material like iron ore and coal, locally, but if the raw material is not available in the state only then plants can source the same from outside. Directives to NMDC and CMDC have been given for supplying raw material to new plants, he said.
The government has also given assurance on availability of iron ore, coal, land (for setting up new plants), and water. Core sector industries in the state are eligible for subsidy in electricity charges.
Kawasi Lakhma, Minister of Commerce and Industry, government of Chhattisgarh, has asked industry players who have signed MoUs to ensure they take effective steps over the next 6 months.
With the implementation of this policy, Chhattisgarh’s steel production is expected to increase by 2.5-3 million tonne (mnt) by 2024. It is also estimated that under this policy, it will be possible to increase steel production in Chhattisgarh’s secondary steel sector by 10-12 mnt in the coming 10 years.
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