Central Sector Scheme for Industrial Development of J&K- Highlights

The Cabinet Committee on Economic Affairs (CCEA) has approved the Central Sector Scheme for Industrial Development of Jammu & Kashmir. The proposal for the scheme was made by the Department for Promotion of Industry and Internal Trade.

Key Features of the Scheme

  • The government has made a new Industrial Development Scheme for Jammu & Kashmir (J&K IDS, 2021) as a Central Sector Scheme aimed at the development of Industries in the UT.
  • The major aim of the scheme is generating employment that will lead to socio-economic development in the region.
  • The scheme is for both smaller and larger units. Smaller units with an investment up to Rs. 50 crore in plant & machinery will get a capital incentive up to Rs. 7.5 crore. They will also get capital interest subvention at the rate of 6% for a maximum of 7 years.
  • The scheme is aimed at taking industrial development to the block level in J&K.
  • The scheme has brought a major incentive- GST Linked Incentive. This incentive will ensure less compliance burden without having to compromise on transparency.

Incentives available under the Scheme

  • Capital Investment Incentive: It will be available at 30% in Zone A and 50% in Zone B on the investment made in Plant & Machinery or construction of a building and other durable physical assets. Investment up to Rs. 50 crore will be eligible for the incentive. The maximum limit of incentive is Rs 5 crore and Rs 7.5 crore in Zone A & Zone B respectively.
  • Capital Interest subvention: At 6% for a maximum of 7 years on loan amount up to Rs. 500 crore for investment in plant and machinery or construction of a building and in the service sector.
  • GST Linked Incentive: 300% of the eligible value of actual investment made by the units in manufacturing or construction in building and all other durable physical assets for 10 years.
  • Working Capital Interest Incentive: 5% (annual rate) for a maximum of 5 years. The maximum limit of incentive is Rs 1 crore.

The total outlay of the Industrial Development of Jammu & Kashmir scheme is Rs 28,400 crore for the scheme period 2020-21 to 2036-37.