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India By State - Orissa - Taxation & Legalities

Taxation & Legalities


Policies & Incentives

Agricultural Policy

Orissa is blessed with a wide range of fertile soil and climate suitable for agriculture. Agriculture has been a prominent sector in developing the state. Majority of the population is dependent on agriculture for livelihood. The state agricultural policy emphasises agriculture for agro-based industries, biotechnology-based industries, commercial purposes, food processing industries and modern farming techniques. The policy aims at formation of Kisan Sahayak Kendra (KSK). The Kisan Sahayak Kendras are dedicated for counselling prospective to entrepreneurs on agriculture projects.

Salient Features of the State Agricultural Policy

  • To generate employment opportunities and enhance the status of agriculture from the present level of subsistence agriculture to a profitable and commercial venture
  • To utilise agriculture as the main tool for poverty eradication and promote entrepreneurship
  • To make available knowledge of modern farming systems
  • To Adopt integrated programmes to solve problems, such as water logging, soil erosion, wasteland, saline soil
  • To create skilled labour for management of modern agriculture and help mechanisation of agriculture to increase productivity
  • To establish agro-based industries and food processing industries for higher value addition and reorient agriculture towards exports
  • To achieve self-sufficiency in the production of fruits, flowers, vegetables, potato, onion, milk, egg, fish and meat and increase area under tea, coffee, rubber, cashew and other plantation crops;
  • To provide irrigation facilities to 50 per cent of cultivable land through completion of incomplete irrigation projects and promotion of individual and group enterprise
  • To promote private enterprise in the marketing of agricultural produces.

State Industrial Policy

Orissa government is committed to transform the state into a vibrant industrial state. The state industrial policy has been reformulated in March 2007 with broader vision and commitment toward attaining the goal. The state has identified tremendous potential in sectors, such as steel, aluminium and petrochemicals, mineral processing and value addition, chemicals and fertilisers, agro and food processing industries, handicrafts and handloom, export oriented industries and IT industries.

  • To create a business climate to accelerate investment in industry and infrastructure projects
  • To raise income, employment and economic growth
  • To reduce regional disparities in economic development within the state
  • To deregulate the business environment in the state
  • To implement and make operational single window mechanism for industrial clearances
  • To ensure balanced utilisation of natural resources for sustainable development

Power Policy

  • To issue license for transmission and distribution and set tariff
  • To prevent monopolistic behaviour by operators
  • To safeguard the interests of the consumers
  • To take measures conducive to an efficient electricity industry in the state

Tourism Policy

Orissa Tourism Policy has created an environment for planned and sustained development of tourism. It also welcomes and encourages non-government sectors to participate in development of the state of tourism in Orissa. Special Tourist Police has already been deployed at Puri, one of the most visited tourist destinations in the state.

The Government proposes:

  • To maintain and improve existing roads and start the planning of new roads to the tourist centres will be given due priority
  • To develop the operation of charter flights while improving the air service to the state;
  • To establish Water sports and water transport services
  • Incentives to hotels and other tourism-related activities
  • To establish a convention complex and golf course at Bhubaneswar
  • Marketing and publicity of tourism potential and the facilities will be stepped up

Information and Communication Technology (ICT) Policy

The Information and Communication Technology (ICT) Policy encourages widespread use of information technology for offering good governance to the citizens. It is aimed at developing a faster and transparent decision making system through an e-governance system.

  • A combined application form to obtain clearances would be developed to centralise statutory/ non-statutory clearances and time bound clearances with provision of deemed clearances would be created for ICT industries
  • All IT/ ITES industries will be exempted from the payment of Sales Tax for a period of five years from the date of their first billing
  • Electrical energy consumption by IT/ ITES units shall be charged at industrial rate subject to approval of the Orissa Electric Regulatory Commission
  • Important building infrastructure such as IT Parks, STPI Complex shall be free from power cuts
  • Interest subsidy on loans from financial institutions/ banks at 5 per cent per annum to new units in IT/ ITES
  • IT and ITES units are declared as public utility services
  • IT/ ITES units are exempted from the clearance and routine inspections of the controlling and regulatory authorities of the State Government and are eligible for self-certification to the labour, ESI and EPF authorities
  • IT/ ITES units will be exempted from clearance from electrical inspector for approving contract demand of load and appliances to be fitted in an IT unit
  • IT/ ITES units will be exempted from the payment of electricity duty
  • No stamp duty will be charged on land allotted by government to IT/ ITES units
  • Price preference of 10 per cent will be available to local IT units participating in the e-Governance projects of the State Government.

Port Policy

Ports are a critical infrastructure for exports and imports. Orissa has a coastline of 480 km with conducive, strategic and natural port locations. Paradeep, one of the major ports in India, offers tremendous opportunities for international trade. The state government has declared the Port Policy to develop the ports. The policy acts as a single window agency for development of ports and inland waterways.

Salient Features of the Orissa State Port Policy

  • To decongest the existing major ports by developing minor ports on the Eastern Coastal region, so as to cater to the needs of increasing volumes of traffic
  • To encourage shipbuilding, ship repairing, and ship breaking and to establish manufacturing facilities for heavy industries, in and around ports
  • To establish connectivity of the ports with the riverine systems to increase the transportation of cargo through inland waterways;
  • To increase Orissa's share in the export and import sector, in national and international trade and commerce
  • To provide facilities for coastal shipping of passengers and inter-state cargo traffic and further extension of these services to West Bengal, Andhra Pradesh, Tamil Nadu etc;
  • To take up suitable facilitating measures as well as policy initiatives for attracting private sector investments in the development and operation of existing and new minor ports

State Reservoir Fishery Policy

Salient Features of the state reservoir fishery policy are:

The State wants to increase investments from private sector and to augment fish production from the reservoir resources through scientific management and to develop skills among fishermen and fisher women and stimulating entrepreneurship for fishery sector.

Orissa Public Private Partnership Policy

The Public Private Partnership (PPP) is a suitable approach in the infrastructure sector. It aims at supplementing scarce public resources, creating a more competitive environment and helping to improve efficiencies and reducing costs. The infrastructure sectors covered by the policy include airports, airstrips and heliports, inland container depots and logistics hubs, ports and harbours, railways roads, bridges and bypasses and urban infrastructure. It also includes facilitating the development of industrial parks, theme parks like IT and biotechnology parks, knowledge parks, special economic zones, townships and trade fairs.

Salient Feature of Orissa Public Private Partnership Policy

  • To leverage State and Central Government funds, support private investment and to create a conducive environment so as to utilise the efficiencies, innovativeness and flexibility of the private sector to provide better infrastructure and service at an optimal cost
  • To set up a transparent, consistent, efficient administrative mechanism to create a level playing field for all participants
  • To put in place an effective and efficient institutional mechanism for speedy clearance of the projects
  • To provide necessary risk sharing framework in the project structure so as to assign risks to the entity most suited to manage them
  • To create a robust dispute redressal mechanism and regulatory framework for PPP projects;
  • To provide the required viability gap funding where the essential projects are intrinsically unviable;
  • To facilitate implementation of the objectives of the policy by the creation of Orissa Infrastructure Development Fund.


Doing Business in Orissa

Approvals and clearances required

Departments to be consulted

Incorporation of the company Registrar of companies
Registration/Industrial licence/Industrial Entrepreneurs Memorandum (IEM) District Industries Centres for SSI/Secretariat for Industrial Assistance (government of India) for Large and Medium Industries
Allotment of land IDCO
Permission for land use in case industry is located outside an industrial area IDCO
Department of Town and Country Planning Local Authority/District Collector
NOC and consent under Water and Air Pollution Control Acts Orissa State Pollution Control Board (OSPCB)
Forest & Environment Clearance Ministry of Forest & Environment, Government of India
Approval of construction activity and building plan Developmental Authority
Sanction of Electricity Distribution Companies-Central Electricity Supply Utility of Orissa(CESU), NESCO, SOUTHCO, WESCO Transmission Company- GRIDCO
Water Supply Water Resources Department
Factory & Boiler clearance Chief Inspector of Factories & Boilers
Finance OSFC/Commercial Banks like IDBI, ICICI Limited, SBI etc.
Orissa VAT Act, and Central and State Excise Act Commercial Tax Department and Central and State Excise Department

Source: Team Orissa and Directorate of Industries, Orissa


Cost of setting up business


Cost Estimate

Industrial land (per sq mts) USD 2 to USD 10
Office space rent (per sq ft per month) USD 0.2 to USD 1.2
Residential rent (for a 2,000 sq ft house, per month) USD 95 to USD 200
5-star hotel room (per night) USD 95 to USD 150
Commercial & Industrial Electricity 7.5 cents/kWh to 10 cents/kWh


More Information on Orissa

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