Panaji: In a significant move to enhance the ease of doing business in the state of Goa, the Goa Industrial Development Corporation (Goa-IDC) proudly announces the notification of the Goa Industrial Development Corporation (Allotment, Transfer, and Sub-Lease Regulations), 2023. The Corporation initiated the comprehensive reforms of the laws and regulations governing the functioning of Goa-IDC th an objective to align with the Goa Logistics and Warehousing Policy 2023 and Goa Industrial and Investment Policy 2022.
The project was taken up in collaboration with Invest India in order to adopt the best practices from other states and countries in consultation with key government stakeholders such as Hon’ble Minister for Industries, Hon’ble Chairperson, Goa-IDC, Principal Secretary (Industries, Trade & Commerce) and Director (Industries, Trade & Commerce).
Additionally, consultations were also held with industry bodies, like Goa State Industries Association (GSIA), Goa Chamber of Commerce and Industries (GCCI), Confederation of Indian Industry (CII) Goa Chapter, Laghu Udyog Bharati Goa Chapter (LUB), Federation of Indian Chambers of Commerce & Industry (FICCI) – Goa Chapter and Associated Chambers of Commerce & Industry of India (ASSOCHAM) – Goa Chapter. Based on these comprehensive consultations with all stakeholders, the new Regulations were meticulously drafted to consolidate, simplify, and standardize the existing regulations of Goa-IDC, ensuring a more coherent and effective framework for industrial development in the region. Incorporating the insights garnered from these consultations, the Regulations were subsequently presented to the Board of Directors of Goa-IDC during the 386th Board Meeting on September 18, 2023. In a unanimous decision, the Board of Directors, through Resolution No. 28/2023, approved the new Regulations.
Minister for Industries, Mauvin Godinho stated that “The new Regulations 2023 is our commitment to promoting sustainability and transparency in the process of plot allotment. The incentives introduced for women entrepreneurs, start-ups and sustainability initiatives, we aim to create an enabling environment for businesses that champion inclusivity and environmental responsibility. The requirement for enterprises to submit a Commercial Operations certificate every two years, verified by a Chartered Accountant, is a proactive step aimed at enhancing our vigilance. This measure not only strengthens our ability to detect defunct units but also prevents any unauthorized sub-leases, ensuring the integrity of the allocated premises”.
Chairman, Goa-IDC Shri.Aleixo Reginaldo Lourenco stated that “The new Regulations place a strong emphasis on standardizing and simplifying all processes of plot allotment. This strategic move is designed to enhance efficiency and clarity in the management of allocated plots. These measures collectively reflect a commitment to promoting equitable, sustainable and accountable industrial development within the state”.
The Goa Industrial Development Corporation (Allotment, Transfer, and Sub-Lease Regulations), 2023 introduces several regulations and amendments pertaining to allotment, transfer, and sub-lease by Goa-IDC, aiming to provide investors with clarity and consistency when making investments in Goa.
The key highlights of the new Regulations are as follows:
1. In line with the Goa Logistics and Warehousing Policy 2023, logistics and warehousing has been accorded industrial status in the new Regulations and as such plots of IDC are now available for setting up of logistics and warehousing facilities.
2. The new Regulations provide for incentives to women entrepreneurs, start-ups and for industries which have adopted sustainable practices.
3. The new Regulations make it mandatory for industry to submit a certificate of commercial operations from a chartered accountant once in every two years. This will ensure that any instances such as illegal sub-lease, transfer or defunct status of the industries shall be known to the Corporation and will be an added layer of monitoring besides having reports from Field Managers.
4. Under the new Regulations, there is no ‘Transfer Fee’ imposed on conveyance of leasehold rights from one company to another. This will pave way for sick units to exit the industry and enable new investors to take up such units for revival or starting new businesses. It is expected that the liberalisation of transfer will not only make land available for new investments, but will also increase the revenue of the Corporation as the lease rent will be revised based on prevailing plot rate at the time of transfer.
5. In order to accommodate all corporate restructuring possibilities, the new Regulations introduce the concept of ‘Special Transfers’ that covers cases such as change in promoters, mergers, amalgamations, demergers etc. In such cases of special transfer there will be no revision on the lease rent at the time of transfer.
6. In the new Regulations in order to simplify the Sub-Lease process the limit has been removed to encourage creation of plug and play infrastructure through private investments. Further, this is conducive to IT companies. However, an entity which is sub-leasing shall not be permitted to acquire another plot.
7. Standardised application forms and model contractual documents are provided as schedules to the Regulations to ensure complete clarity of information for the investors.
The new Regulations introduce robust safeguards for the transfer of leasehold rights, aiming to prevent the speculative trading of unused land. In this proposed framework, transfer is only permissible after full construction and the acquisition of an occupancy certificate. The allottee is required to utilize a minimum of 30% of the plot area and settle all financial obligations, including Land Premium, Lease Rent, and any other dues payable to the Corporation, before being eligible for transfer. Notably, the transfer of leasehold rights is positioned as a legitimate exit mechanism, particularly beneficial for distressed units. Under the proposed Regulations, it allows for the acquisition of leasehold rights by new investors, facilitating the creation of job opportunities in the state of Goa. To incentivize this process and promote a more dynamic industrial landscape, no transfer fee is imposed, provided that all transfer conditions are met. This approach not only encourages the exit of distressed units but also fosters the development of plug-and-play infrastructure for new industries.
Furthermore, to fortify the financial resilience of Goa-IDC, there are untapped revenue-generating avenues. Recently, the Board of Directors embraced a ‘Strategy for value capture financing of infrastructure in industrial estates.’ Under this strategy, 20% of prime assets of Goa-IDC will be exclusively allotted through public auction. The Board specifically designated that land in Verna I.E., Latambarcem I.E., and Sancoale I.E. will be allocated solely through public auction.
In essence, the goal of this liberalized transfer policy is to maximize the utilization of limited industrialization space, fostering increased job creation and economic development. In tandem with the transfer process, the sub-leasing procedures have also been standardized and simplified. Robust safeguards, such as the mandatory submission of a commercial operations report by industries, are in place to prevent any illicit sub-leases. The restriction limiting an allottee to sub-lease only three units has been lifted, aligning with the logistics and warehousing policy. Furthermore, the new regulations include provisions to counter misuse of sub-leasing, stipulating that individuals completely sub-leasing built-up areas without engaging in any industrial activity will be disqualified from further plot allotments. These measures collectively ensure a balanced and accountable approach to industrial development within the state of Goa.
The anticipated impact of the new regulations is geared towards fostering investment in Goa while simultaneously streamlining administrative processes and alleviating documentation burdens for industrial units.