- (1.) What cannot possibly be disputed that ail the States, including the State of Punjab, are presumed to be the welfare States, by the people, of the people and for the people, in the regime and democratic set up, as enshrined in the Constitution of India. Article 154 postulates that the executive power of the State shall be vested in the Governor and shall be exercised by him either directly or through officers subordinate to him in accordance with this Constitution. Article 162 further posits that the executive power of a State shall extend to the matters with respect to which the Legislature of the State has the power to make laws.
(2.) Perhaps, in exercise of these powers, conferred by the Constitution, the Governor of Punjab was pleased to formulate the new Industrial Policies from time to time, inter-alia, in order to, strengthen the economy, attract fresh investment, further boost the. growth of industry, increase annual present industrial growth rate from 8% to 12% in the next two years, to increase the present share of industry in Gross Domestic Product (GDP) from 17% to 25% in the next five years and to divert 15% of the present rural population to manufacturing & related occupations through rapid industrialization in the State of Punjab.
(3.) Not only that, the object of the publication of Industrial Policies was also to diminish the stress of agricultural sector, which predominates the State of Punjab being predominantly an agricultural State, occupying once a pride place in India. Subsequently, the agriculture sector witnessed the heavy losses, debt and stress on the farmers. So, with an eye to meet the hopes of the people and to engage them in a variety of larger, medium and small scale industrial units, based on agricultural produce to generate the required GDP, the State notified the different Industrial Policies, promising to grant various incentives, concessions, subsidies, interest, tax exemptions and other benefits indicated therein, such as:- a) Scheme of interest subsidy @ 5% of the total interest payable on the term loan from financial institutions/banks for industrial units in small scale sector, which would be sanctioned alongwith investment incentive on the basis of certificates to be issued by the financial institutions/banks after the units have gone into production. However, units have the option to avail either the interest subsidy or the sales tax concession. b) To encourage the growth of existing industrial units, benefit of investment incentive and sales tax concession shall be allowed on expansion, provided the fixed capital investment (FCI) is increased at least by 50% or the installed capacity as recorded in the industrial licence/certificate of the Department of Industries is increased minimum by 50%. c) The investment incentive (capital subsidy) shall be available only in case of small scale units graduating to medium/large category as mentioned in (vii) above and for new units in the small scale sector and for large and medium units in 'A' category incentive areas. d) With a view to encourage the rehabilitation of sick industrial units purchased by entrepreneurs from the Punjab Financial Corporation or other Corporations or agencies of the Central or State Government, the same shall be treated as new units for the purpose of incentives provided they are located in the areas eligible for incentives. Following incentives shall be provided to such units:- i) The investment incentive to the extent the same has not been availed or earlier by the original promoter. This incentive would also be available on new machinery purchased by the new entrepreneurs. ii) Sales Tax incentive for the remaining period which has not been availed of by the original promoter. However, the maximum prescribed limit on the FCI (including new investment) shall be adhered to. iii) These incentives shall be as admissible in 'B' category under 1992 package of incentives. Likewise, some other concessions were also announced as described therein in the Industrial Policies of 1996 and 2003. In order to implement these Policies, the State of Punjab framed the relevant rules in this respect.;