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New Industrial Scheme: Employment to 4.5 lakh, industrial development to reach far flung areas of J&K

Last Updated on January 7, 2021 at 3:47 pm

In a major decision of far reaching consequence, Government of India has approved the new Industrial Developmental Scheme for Jammu and Kashmir. The Scheme will go a long way in ushering an era of socio-economic development of the region as also catering to the aspirations of people.

While giving details of the scheme, Lieutenant Governor, Manoj Sinha, in a press conference, visualized the scheme as a major push to the economy of the region and providing huge opportunities of employment to the people of J&K.

The main purpose of the scheme is to generate employment beyond government jobs in both manufacturing and service sectors which directly leads to the socio-economic development of the region. The 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. It will provide a major support to local industry, besides creation of new business opportunities, the Lt Governor observed.

The scheme is approved with a total outlay of Rs. 28,400 crore upto the year 2037.

The following incentives would be available under the scheme:

1.  Capital Investment Incentive at the rate of 30% in Zone A and 50% in Zone B on investment made in Plant & Machinery (in manufacturing) or construction of building and other durable physical assets (in service sector) will be made available. Units with an investment upto 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 & Zone B, respectively.

2.  Capital Interest subvention: At the annual rate of 6% for maximum 7 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).

3.  GST Linked Incentive: Financial incentive based on Gross GST. This will incentivize output upto 300% 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 10 years. However, the amount of incentive in a financial year will not exceed one-tenth of the total eligible amount of incentive.

4.  Working Capital Interest Incentive: All existing units at the annual rate of 5% for maximum 5 years. Maximum limit of incentive is Rs 1 crore.

Key Features of the Scheme:

1.    Scheme is made attractive for both smaller and larger units. Smaller units with an investment in plant & machinery upto Rs. 50 crore will get a capital incentive upto Rs. 7.5 crore and get capital interest subvention at the rate of 6% for maximum 7 years.

2.    The scheme aims to take industrial development to the block level in UT of J&K, which is the 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. Remote areas of J&K will see a major impetus through the scheme.

3.    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.

4.    Scheme envisages a 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.

5.    Earlier schemes though offered a plethora of incentives. However, the overall financial outflow was much lesser than the new scheme. Whereas, the earlier schemes have provided about Rs 1120 crores in all these years, this scheme shall provide an outlay of Rs 28,400 crores.

Major Impact and employment generation potential:

1.    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.

2.    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 Lt Governor expressed gratitude towards the Hon’ble Prime Minister for approving the New Central Sector Scheme for Industrial Development of Jammu & Kashmir.

New Industrial Development Scheme for J&K will give a boost to domestic manufacturing in the region & help J&K in becoming AatmaNirbhar. The Scheme will encourage new investment, substantial expansion and also nurture the existing industries in J&K, he maintained.

The Lt Governor, while giving out the details of the scheme, emphasized that 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. It will be ensured that entrepreneurs from within J&K and outside find a smooth and progressive ecosystem for their business plans, he added.

Further, the Lt Governor emphasized that “With our transparent policies, investments in developing infrastructure, market oriented policy environment and skilled human capital, we aspire to become a growth pillar for India in the current decade”.

He further said that Government and Industry will work closely to achieve the vision of the holistic and balanced development of Jammu and Kashmir.

The Lt Governor also appreciated the Industry and Commerce department for working hard to materialise this scheme in continuous consultation with the Government of India. He also thanked the business associations and all who contributed through their valuable suggestions.