New industrial policy

New industrial policy

Monday, December 07, 2009: The State Governments are primarily responsible for industrial development in their State. The Union Government supplements their efforts through various incentive schemes.  Special Packages of incentives have been introduced by the Government for the North Eastern States (including Sikkim) and for the States of Jammu & Kashmir, Himachal Pradesh and Uttarakhand.

The Government of India does not set up Industrial Parks on its own, rather it provides a ten year tax holiday as admissible under clause (iii) of sub-section of 4 of section 80-IA of the Income Tax Act, 1961 to the entrepreneurs/industrial undertakings who set up industrial parks. The Government has granted one hundred twenty six live approvals during the last three years i.e. 2006-07, 2007-08 and 2008-09 under the Industrial Park Scheme, 2002 applicable in respect of the parks set up on or before 31^st March, 2006. 

DETAILS OF THE PACKAGE OF INCENTIVES FOR SPECIAL CATEGORY STATES

The following incentives are being offered to the State of Jammu & Kashmir since 14.6.2002 and the States of Himachal Pradesh and Uttarakhand since 7.1.2003:

·         Capital Investment Subsidy @15% of investment of plant and machinery subject to a ceiling of Rs.30 lakh;

·         Interest Subsidy @ 3% on working capital loan (applicable for J&K only);

·         Comprehensive Insurance subsidy of 100% on capital investment (applicable for J&K only);

·         100% excise duty exemptions on value addition in J&K. In the case of the States of Himachal Pradesh and Uttarakhand, the exemption is admissible on outright basis but only to those industrial units which are set up or expanded on or before 31-3-2010; and

·         100% Income Tax exemption for first five years and thereafter @30% for Companies and @25% for other than companies for next five years.

The incentive package scheme under North East Industrial Policy (NEIP), 1997 which was being implemented for the North Eastern States since 24^th December, 1997 has been re-introduced as the North East Industrial and Investment Promotion Policy (NEIIPP), 2007 w.e.f. 1.4.2007. The new scheme covers, besides the States of the North East i.e. Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura, the State of Sikkim also and extends benefits to the service sector, bio-technology sector and power generation sector upto 10MW. The norms for substantial expansion were relaxed and capital investment subsidy was enhanced from 15% to 30% without any ceiling. The new scheme offers the following special incentives:

·         Capital Investment Subsidy @ 30% of the value of plant and machinery, without any upper ceiling;

·         Interest subsidy @ 3% on working capital loan;

·         Comprehensive Insurance subsidy of 100% on capital investment;

·         100% excise duty exemption; and

·         100% Income Tax exemption.

The above incentives packages are admissible for a period of ten years.

This information was given by Shri Jyotiraditya M. Scindia, Minister of State for Commerce and Industry, in a written reply in the Lok Sabha today.