New Delhi: The Cabinet Committee on Economic Affairs following its meeting on January 6, 2021 approved the proposal of Department for Promotion of Industry and Internal Trade for Central Sector Scheme for industrial development of Jammu & Kashmir. The scheme was approved with a total outlay of Rs. 28,400 crore upto the year 2037. So far, the amount disbursed under various special package schemes was Rs. 1,123.84 crore.
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 main purpose of the scheme is to generate employment which directly leads to the socio economic development of the area,” the cabinet note stated, and added that the present scheme was 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 following incentives would be available under the scheme:
- 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.
As per the Scheme, smaller units with an investment in plant and 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 Cabinet note stated that the Scheme had 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. Moreover, the 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 were 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,” the cabinet note stated, adding that earlier schemes though offered a plethora of incentives, the overall financial outflow was much lesser than the new scheme.
– global bihari bureau
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