J&K adopts Ind Policy 2021-30 Attractive packages of incentives for new, existing, expanding units

TNN Bureau. Updated: 4/20/2021 10:47:23 AM Jammu and Kashmir

JAMMU: The Jammu and Kashmir Union Territory administration has adopted the Industrial Policy 2021- 30 with an ambition to create a robust industrial environment in ten priority sectors which go well with local supply-demand dynamics, topography, and consumption.
The policy while attracting investors to set up mega units also goes on to reach the rural areas with area specific support to the prospective entrepreneurs.
The adoption of industrial policy, along with the land allotment policy, is in the backdrop of the Central Sector Scheme for Industrial Development of Jammu & Kashmir approved by the Cabinet Committee on Economic Affairs earlier this year.
In the backdrop of the approval of Industrial Development Policy, the guidelines from the Jammu and Kashmir administration was much awaited.
The government has made the package of incentives in the new industrial policy to both upcoming and existing industrial units. This allays the concerns of local industrialists as the policy had earlier suggested that the incentives may be available only to the new units.
The government has made it clear in the preamble of the policy that the existing units as also the existing units desiring to go for expansion shall also be covered. However, those industrials units which have been availing incentives and other concessions under the earlier industrial policy of 2016 shall continue to enjoy the benefits till 2026.
The policy has enlisted 16 focus sectors which include manufacturing, IT & ITeS, agriculture and food processing, infrastructure and real estate, herbal and medicinal plants, milk, poultry and wool production, education and skill development, tourism and hospitality, film tourism, horticulture and post-harvest management, renewable energy, handloom and handicrafts, mulberry and silk production, export oriented units and any other sector that is notified by the government. In the 16 priority area, the policy makes sector eligible for the package of incentives.
These sectors include: tourism and hospitality services; services promoting film tourism; ropeways, entertainment parks and rides; heritage property restoration services; healthcare services; IT and ITeS services; maintenance and repair services; freight terminals logistics parks and warehousing; testing, R&D, analysis and certification, and education and skill development services.
The policy has put 12 sectors in the negative list which will not be eligible for the package of incentives.Under the new policy the District Industries Centers have been declared competent to approve and disburse incentives up to Rs five lakhs through district level committees, incentives from Rs five to fifty lakhs are to be approved by the divisional level committees headed by Director Industries and Commerce.
Incentives above Rs fifty lakhs shall be approved by the UT level committee headed by the Secretary, Industries and Commerce.The policy allows subsidy of 100% on purchase and installation of Diesel Generator set from 10KW to 2000KW.
The policy further allows 60% subsidy on installation of pollution control devices. The policy has a number of other green environment protection initiatives. Earlier, in January this year the Cabinet Committee on Economic Affairs had considered and approved the proposal of Department for Promotion of Industry and Internal Trade for Central Sector Scheme for Industrial Development of Jammu and Kashmir.
The scheme has a total outlay of Rs. 28,400 crore upto the year 2037.Government of India had formulated New Industrial Development Scheme for Jammu & Kashmir as Central Sector Scheme for the development of Industries in the UT of Jammu & 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 Reorganisation 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 scheme has broadly following incentives: 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) is 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 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).GST Linked Incentive: 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.
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% for maximum 5 years, maximum limit of incentive is Rs 1 crore.
The Scheme is seen 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 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 UTScheme 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.

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