Estimated to generate employment for 4.5 lakh people, the policy will exist for 17 years till 2037.
First ever scheme to provide incentives on the basis of geography of the area so as to promote industry at block level
Jammu: For the promotion of industry especially in far flung areas of Jammu and Kashmir, the Government of India has approved a new industrial development scheme for the Union Territory with a total outlay of Rs 28,400 crore.
Announcing this here on Thursday, UT’s Lt Governor Manoj Sinha said that the scheme will come into force from the date of its notification till 2037. Though the earlier industrial schemes announced for Jammu and Kashmir offered a plethora of incentives, the financial outflow was only Rs 1120 crore all these years, he added.
The new scheme aims at generating employment, skill development and attracting new investment while nurturing the existing ones in both the manufacturing and service sector so as to give a fresh thrust for sociology-economic development of the Union Territory, he said, anticipating it to attract “unprecedented investment” and “give direct and indirect employment to about 4.5 lakh persons”. This will be in addition to working capital interest subvention giving indirect support to 35,000 persons under the scheme, he added.
Offering incentives to industry and service sector on the basis of geography of the area of their location, the new scheme provides for capital investment incentive at the rate of 30 per cent in Zone-A and 50 per cent in Zone-B on investment made in plant and machinery (in manufacturing), or construction of building and other durable physical assets (in service sector).
The Zone-A includes far off areas of the UT, Lt Governor said, adding this has been done to provide an equal opportunities of growth to industry and service sectors in areas far away from capital cities and major towns of the UT. The units with an investment up to Rs 50 crore will be eligible for the incentive, he said, adding that the maximum incentive available in areas falling under Zone -A is Rs 5 crore and Rs 7.5 crore in Zone-B.
Apart from this, the new scheme also provides for 6 per cent capital interest subvention for a maximum of seven years on loan up to Rs 500 crore for investment in plant and machinery (in manufacturing), or construction in building and all other durable physical assets (in service sector) for ten years.
Simplifying the scheme on the lines of ease of doing business, the government has provided for GST linked incentive under the scheme under which financial incentive will be based on Gross GST so as to ensure less compliance burden without compromising on transparency.
This will incentivise output upto 300 per cent of the eligible value of actual investment made in plant and machinery (in manufacturing), or construction in building and all other durable physical assets (in service sector), LG said. However, the amount of incentive payable in a financial year will not exceed one-tenth of the total eligible amount of incentives, he added.
The existing units in the UT can also avail working capital interest incentive at the annual rate of 5 per cent fir a maximum of five years. The maximum limit of incentive in this case is Rs one crore, he added.
Pointing out that it has been the first ever industrial incentive scheme of the Government of India that aims to take industrial development to the block level in the UT of Jammu and Kashmir, Sinha said, adding that even smaller units with an investment upto Rs 50 crore in plant and machinery will get a capital incentive upto Rs 7.5 crore and capital interest subvention at the rate of 6 per cent per annum for a maximum of seven years.
Pointing out that the new scheme envisages a greater role of the UT in registration and its implementation while having proper checks and balances by having an independent audit agency before the claims are approved.
The UT administration has earmarked the land for setting up industry and land bank having 3000 acres of land in both Jammu and Kashmir divisions created. It will be ensured that the implementation of the new scheme shall be done in a manner which is friendly and hassle free to the investors and that entrepreneurs from with J&K and outside find a smooth and progressive eco system for their business plans.