New Delhi: The Central government has given a much needed boost to the process of industrial development in Jammu and Kashmir. The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Shri Modi on Wednesday considered and approved the proposal of Department for Promotion of Industry and Internal Trade for Central Sector Scheme for Industrial Development of Jammu & Kashmir. The scheme has been approved with a total outlay of Rs 28,400 crore up to the year 2037.
The Government of India has formulated New Industrial Development Scheme for Jammu & Kashmir (J&K IDS, 2021) as Central Sector Scheme for the development of industries in the UTs of Jammu and Kashmir.
The main purpose of the scheme is to generate employment which directly leads to the socio economic development of the area. Considering the historic development of reorganization of Jammu & Kashmir with effect from 31.10.2019 into UT of Jammu & Kashmir under the J&K Reorganization Act, 2019, the present scheme is being implemented with the vision that industry and service led development of J&K needs to be given a fresh thrust with emphasis on job creation, skill development and sustainable development by attracting new investment and nurturing the existing ones.
The 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 buildings and other durable physical assets in the service sector is available. Units with an investment up to Rs 50 crore will be eligible to avail this incentive. Maximum limit of incentive is Rs 5 crore and Rs 7.5 crore in Zone A and Zone B respectively.
CAPITAL INTEREST SUBVENTION: At the annual rate of six per cent for maximum seven years on loan amount up to Rs 500 crore for investment in plant and machinery in manufacturing or construction of building and all other durable physical assets in service sector.
GST LINKED INCENTIVE: Three hundred 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 for ten years. The amount of incentive in a financial year will not exceed one-tenth of the total eligible amount of incentive.
WORKING CAPITAL INTEREST INCENTIVE: All existing units at the annual rate of 5 per cent for maximum five years. Maximum limit of incentive is Rs 1 crore.
KEY FEATURES OF THE SCHEME
The scheme is made attractive for both smaller and larger units. Smaller units with an investment in plant and machinery up to Rs 50 crore will get a capital incentive up to Rs 7.5 crore and get capital interest subvention at the rate of six per cent for maximum seven years
The scheme aims to take industrial development to the block level in UT of J&K, which is first time in any Industrial Incentive Scheme of the Government of India and attempts for a more sustained and balanced industrial growth in the entire UT
The scheme has been simplified on the lines of ease of doing business by bringing one major incentive- GST Linked Incentive- that will ensure less compliance burden without compromising on transparency.
Scheme envisages greater role of the UT of J&K in registration and implementation of the scheme while having proper checks and balances by having an independent audit agency before the claims are approved
It is not a reimbursement or refund of GST but gross GST is used to measure eligibility for industrial incentive to offset the disadvantages that the UT of J&K face. Earlier schemes though offered a plethora of incentives. However, the overall financial outflow was much lesser than the new scheme.
MAJOR IMPACT
The scheme is to bring about radical transformation in the existing industrial ecosystem of J&K with emphasis on job creation, skill development and sustainable development by attracting new investment and nurturing the existing ones, thereby enabling J&K to compete nationally with other leading industrially developed States/UTs of the country.
It is anticipated that the proposed scheme is likely to attract unprecedented investment and give direct and indirect employment to about 4.5 lakh persons. Additionally, because of the working capital interest subvention the scheme is likely to give indirect support to about 35,000 persons.
The financial outlay of the proposed scheme is Rs 28,400 crore for the scheme period 2020-21 to 2036-37. So far, the amount disbursed under various special package schemes is Rs 1,123.84 crore. /BI/
