Andhra Pradesh lured Hero MotoCorp with free land: Siddaramaiah

‘We offered maximum concessions in the form of tax holidays & excise duty exemption, among others’

Hero MotoCorp Ltd. dropped Karnataka as its destination for a project as the two-wheeler major was offered free land by the Andhra Pradesh government. It does not reflect on any “laxity” on the part of the State government, said Chief Minister Siddaramaiah, who also holds the Industry and Commerce portfolio.

“Our government offered maximum concessions in the form of tax holidays, excise duty exemption, concessions in entry tax, and interest-free loan of Central Sales Tax (CST) to the company. But, we cannot give them free land, because other companies will also ask for it. We cannot compete with Andhra Pradesh on this,” said Mr. Siddaramaiah

Land offered

The company had proposed to invest Rs. 1,115 crore and the government had offered 500 acres of land for a lease period of 99 years. The cost per acre of land was Rs. 32 lakh at Mammigatti Industrial area in Dharwad, Mr. Siddaramaiah told presspersons here on Friday.

While the State government did its best, Andhra Pradesh enjoys the support of the Centre.

This made the difference, he claimed. The Centre has offered a special package to Andhra Pradesh post-Telangana formation, he added.

Incentives aplenty

Hero MotoCorp was offered more incentives compared with Honda Motorcycle and Scooter India Ltd., which has established its plant at Narasapura in Kolar. Honda Motorcycle and Scooter Ltd. had purchased 97 acres of land by paying Rs. 47 lakh per acre in 2011 at Narasapura, he said. While Hero MotoCorp agreed to offer 70 per cent of total workforce to locals, Honda Motorcycles provided 80 per cent of jobs to local people, Mr. Siddaramaiah said.

Other offers

The government offered water at Rs. 35 per kg litre for the first five years and several tax and loan benefits, including 100 per cent entry tax exemption on input components and raw material for 10 years from the date of commencement of production; 100 per cent exemption on stamp duty for registration of land and loan documents; cent per cent exemption on electricity duty/tax for the first five years, Mr. Siddaramaiah said.

He said there had been no delay in taking decisions by the government.

Approval in March 2014

Hero MotoCorp’s proposal was approved in March 2014. Later, a Cabinet subcommittee, headed by him, had agreed to offer several concessions to it, he said.