Industrial Policy of Goa State

Information source: Small Industries Service Institute, Margao, Goa

Goa the 25th state of India lies in the Konkan Coast 600 Kms south of Mumbai and 300 Kms North of Mangalore. The bounty of nature has bestowed the state with a beautiful environment of lush green hills and forest, flowing rivers and rivulets and some ofthe most beautiful environment of lush green hills and forest, flowing rivers and rivulets and some of the most of beautiful beaches of southeast Asia. The state has an area of 3702 sq Kms and a population of 11.67 lakhs as per 1991 Census. It has one of the highest literacy and per capita income among all the states of India. During the past one decade, Goa state has transformed from a tourist destination to an emerging industrial giant of Western coast of India.

After liberation and with the introduction of planned Economic Development, the state has made rapid strides in the field of Industrial Development. The growth of large, medium and small scale industries are spectacular during the last 2 decades. As on March 1997 there are 95 medium and large scale units in the state manufacturing variety of products like Chemical fertilizers, Automobile Tyres, Pesticides, Pharmaceuticals formulation, Telecommunications equipments, Electronic products, Transport equipments, Ocean going Vessels etc. The Total investment in plant & Machinery of the units is Rs.35000 lakhs, have total installed capacity to produce goods worth Rs.1,30,000 lakhs. Total employment in DGTD units in Goa state is more than 15000 Nos. Annual production is to the tune of Rs. 80,000 lakhs.

The growth of S.S. units in the state in also and quite phenomenal. Almost from scratch during the pre-liberation period, the number of registered S.S. Units rose to 5300 as on March 1997. Investment in Machinery & equipments of the S.S.sector in Rs.7,500 lakhs and total capital investment is about 13,500 lakhs. Installed capacity of the units are to produce goods & services worth Rs. 60,000 lakhs at current prices. Estimated annual production in the S.S. sector is valued at Rs.35,000 lakhs during 96-97. Total employment in this sector is about 36,000. The Industrial growth of the state during the recent past is attributed to the realistic industrial policy formulated by Goa State Government.

The industrial policy of Goa aims to hardness the human resources of the state, improve the quality of life of the citizens and preserve the pollution free environment of Goa. It aims to provide an efficient system of approvals wherever needed and give thrust to export oriented industries while encouraging foreign investments in the state. There is tremendous scope for promoting the tourism and service sectors and there is a constant effort to upgrade educational institutions to synergise with the increased sophistication in industrial growth.

The selective approach to new industrial approval is the salient feature of the industrial policy of the state. The setting up of large and medium industries policy requires approval of high power coordination committee headed by the chief minister. The committee examines the type of unit proposed to be set up from the view point of environment and the existing infrastructure. This simplifies the process considerably and entrepreneurs need not pursue their goals with several departments. Power intensive units are not encouraged in the state. As far as S.S Units are concerned provisional registrations are issued within 24 hours on receipt of applications and permanent registration is given once the units starts production. Cottage Industries ie. Industries with investment of less than Rs. 50,000 in plant machinery and using less than 5 HP Electrical power are exempted from obtaining license from Municipality, Panchayat and NOC from Health Department.

The objective of new industrial policy of the government of Goa is to encourage setting up of industries which are non polluting and employment oriented. With the liberalization of economy, the new thrust areas in industrial growth are electronics and pharmaceuticals. In order to encourage setting up electronics industries, Goa state government has set up an electronic city in Verma Indl. estate. Another growth centre is proposed in Pernem in North Goa. Agrobased, food processing including fisheries, electronics, software development, telecommunication, bio technology, light engineering goods, wood carving, automotive parts etc. and industries having scope or backward and forward linkages and ancillarisation are encouraged. More thrust is given for tourism based industries and service industries. Pisciculture, floriculture, Tissue culture, Mushroom cultivation and processing etc. are also being encouraged in Goa state.

Medium and large industries will be encouraged in villages and rural areas with a view to achieve dispersal of industries and to reduce unemployment in rural areas. All the 16 industrial estates are located in rural areas and are classified as rural industrial estate. As per the new industrial policy, major thrust is given for infrastructure development. Goa industrial development corporation has so far setup 16 industrial estates, constructed more than 600 industrial sheds and developed more than 1200 industrial plots. There is at least one industrial estate in all the talukas of the state.

Two state financial corporations ie. Economic Development Corporation of Goa Ltd. and Maharashtra State Financial Corporation Ltd. are functioning in the state extending termloan assistance to S.S entrepreneurs through a number of schemes. GHRSSIDC Ltd. caters to the raw materials as well as marketing needs of the S.S.Units of the state. KVIB is also functioning in the state extending financial assistance to village and cottage industries.

Almost all the national level industrial promotional agencies are functioning in the state. SIDBI, SISI, NSIC, KVIC, IFCI, IDBI, ET&DC and CIPET have offices in the state of Goa. Goa has an UNDP assisted Tool room and Training center. Further the state has a network of more than 250 branches of various commercial banks and co-operative banks supplementing the efforts of EDC and MSFC in extending financial assistance to trade industry, tourism and service sectors.

In the new liberalized environment, a new thrust is being given to encourage private sector investment in infrastructure projects like roads, ports, power and water. A PPA has been signed for setting up a 40 mw power plant in the private sector to augment the power availabilities in the state.


The following are the package of incentives offered to industries as per the new industrial policy.

One of the most attractive incentive offered by Goa State Government is the 25% subsidy on fixed capital investment limited to Rs.25.00 lakhs.

The sales tax exemption facility available to the new small scale units will be linked to investment also as an alternative and not as a substitute. Sales Tax exemption facility is thus available for a period of 15 years for small scale units and 12 years for large and medium scale units or upto sales tax liability amount equal to the capital cost of the project which ever is reached later. Theexisting Sales tax deferment schemes will also continue except that it will be modified to operate on the same parameters as mentioned above. The Government has decided that the benefit of sales tax exemption is allowed upto the last point of sale.

Electricity and water will be supplied to customers less than 25% below the commercial tariff.

The State Government is remitting 50% of the stamp duty paid under Stamp Duty Act in respect of bonds or mortgage deeds executed in favour of EDC, MSFC and scheduled commercial banks and lease deed documents in respect of allotment of plots and sheds by GDDIDC.

Price preference at the rate of 15% on the purchase made by the Government Departments is available to the registered small scale units with effect from June, 1970.

Ready built industrial sheds and plots on rental as well as purchase basis are made available by GDDIDC to prospective SSI entrepreneurs as well as women entrepreneurs on preferential basis.

Goa Industrial Development corporation is offering subsidy to the extent of 50% of the cost of preparation of feasibility studies prepare by the Government industrial consultancy organisations.

Loans are given by the Directorate Industries and Mines under the Goa State Aid to Industries act. Bridge loan to the extent of 50% of the margin is also given by Industries and Mines Department.

Subsidy upto 50% of the cost of power generating sets (limited to a maximum of Rs. 1 lakh purchased by small scale units is given by the State Government.


New units are totally exempted from payment of Income Tax for the first 5 years.

The Small Industry Development Bank of India provides concessional financial assistance to small scale industries through its scheme of refinance loan granted by scheduled commercial banks, Economic Development Corporation and Maharashtra State Financial Corporation to the extent of 90% of loans sanctioned by financial institutions.

Seed capital or margin money loan scheme is also operated by Small Industries Development Bank of India through EDC and MSFC to the extent of 20% of the cost of the project depending upon the merit of each case.

Composite loan scheme to the artisans upto a maximum of Rs.50,000/- is operated by EDC and MDFC for purchase of machinery and equipments as well as for working capital requirement.

Small Industries Service Institute has been granting 50% concession on its prescribed charges for the various consultancy services rendered by the Institute or the prospective and existing entrepreneurs. 50% concession is also available to the job charges of its common facility workshop in general engineering located at the Institute's premises of Quepem Road, Margao.

Indigenous as well as imported machinery have been supplied to small scale entrepreneurs on hire purchase basis by NSIC. Being a backward area, terms and conditions are liberalized.

Non-resident Indians can import capital goods and raw materials without indigenous clearance and other formalities.

With a view to give fill upto production in the small scale sector, certain products are totally exempted from payment of excise duty and partial relaxation has been made for a number of products. The policy is being reviewed from time to time.