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Subject: Concessional Industrial Package, Govt. of India

Fiscal Incentives to new Industrial Units and to existing units on their substantial expansion:

(i) New industrial units and existing industrial units on their substantial expansion as defined, set up in Growth Centres, Industrial Infrastructure Development Centres (IIDCs), Industrial Estates, Export Processing Zones, Theme Parks (Food Processing Parks, Software Technology Parks, etc.) as stated and other areas as notified from time to time by the Central Government are entitled to:

(a) 100% (hundred per cent) outright excise duty exemption for a period of 10 years from the date of commencement of commercial production.

(b) 100% Income tax exemption for initial period of fie years and there after 30% for companies and 25% for other than companies for a further period of five years for the entire State of Uttarakhand from the date of commencement of commercial production.

(ii) All New industries in the notified location would be eligible for capital investment subsidy @ 15% of their investment in plant & machinery, subject to a ceiling of Rs.30 lakh. The existing units will also be entitled to this subsidy on their substantial expansion, as defined.

(iii) Thrust Sector Industries as mentioned in Annexure-II are entitled to similar concessions as mentioned in para (i) & (ii) above in the entire State of Uttarakhand without any area restrictions.

Development of Industrial Infrastructure:

(i) The funding pattern under the Growth Centre Scheme currently envisaging a Central assistance of Rs.10 crore per centre is raised to Rs.15 crore per centre.

(ii) The financing pattern of Integrated Infrastructure Development Centres (IIDC) between Government of India and SIOB! will change from 2:3 to 4:1 and the GOI funds would be in the nature of a grant, so as to provide the required infrastructural support.

Other Incentives:

(i) Deendayal Hathkargha Protsahan Yojna and other incentives of Ministry of Textiles: The funding pattern between Government of India and both the States would be changed from 50:50 to 90:10 under this Scheme. Ministry of Textiles would extend its package of incentives, as notified for North-Eastern States, to the State of Uttarakhand also.

(ii) Ministry of Food Processing Industries would include Uttarakhand in difficult areas category.

(iii) Pradhan Mantri Rozgar Yojana (PMRY) : Ministry of Agro & Rural Industries would provide for State of Uttarakhand relaxation under PMRY with respect to Age (i.e. 18-40 years from 18-35 years) and Subsidy @ 15% of the project cost subject to a ceiling of Rs. 15,000/- per entrepreneur).

Ineligible Industries under the policy:

The list of Industries exclude from the purview of proposed concessions is at Annexure-III.

In addition, the Doon Valley Notification S.O.No. 102(E0 dated 1 Feburary, 1989 (Annexure-IV) as amended from time to time, issued by Ministry of Environment & Forests would continue to operate in the Doon Valley area and the industries notified under it are excluded from the proposed concessions, in the State of Uttarakhand.

Nodal Agency:

The Nodal Agency for routing the subsidies/incentives under various schemes under this Policy will be notified separately.

F.No. 1 (10) 2001-NER. The Government of India is pleased to make the following scheme of Central Grant or Subsidy for Industrial units in the State of Uttarakhand with a view to accelerating the industrial development in the States.

1. Short Title
This scheme may be called the Central Capital Investment Subsidy Scheme, 2003.

2. Commencement and duration of the Scheme
It will come into effect from 7th January, 2003 and remain in force upto and inclusive of 31st March, 2010.

3. Applicability of the Scheme
The scheme is applicable to all industrial units in the Growth Centres approved for Uttarakhand and also to the new industries units or existing units, on their substantial expansion, in Growth Centres or Industrial Infrastructure Development Centres (IIDC) or industrial estates/parks/export promotion zones and commercial estates set up by state of Uttarakhand and to new industrial units or existing units on their substantial expansion in the specified thrust Industries (as at Annexure) located outside these growth centres and other identified locations.

4. Eligibility period
The subsidy will be available during the duration of the scheme, to an eligible industrial unit for a period of ten years from date of commencement of commercial production.

5. Definitions
(a) ‘Industrial Unit’ means any industrial unit where a manufacturing programme is carried on or suitable servicing unit as defined in Mlo 551 letter No. 2(3)/91-551. Bd dated 30-9-1991, other than that run Departmentally by Government.
(b) ‘New Industrial Unit’ means an industrial unit for the setting up of which effective steps were not taken prior to 7th January, 2003.
(c) ‘Existing Industrial Unit’ means increases by not less than 25% in the value of fixed capital investment in plant and machinery of an industrial unit for the purpose of expansion of capacity/modernization and diversification.
(d) ‘Effective Steps’ means one or more of the following steps:-
(i) That 10% or more of the capital issued for the industrial unit has been paid up;
(ii) That any part of the factory building required for manufacturing activity has been constructed;
(iii) That a firm order has been placed for any plant and machinery for the purpose of this scheme.
(e) ‘Fixed Capital Investment’ means investment in plant and machinery required industrial unit for the purpose of this scheme.

6. Extent of admissible subsidy
All eligible industrial units located in the Growth Centres or HOE or industrial estate set up in Uttarakhand shall be given capital investment subsidy at the rate of 15% of their fixed capital investment in respect of new units or additional investment in respect of substantial expansion by an existing units in the plant and machinery, subject to a maximum ceiling of Rs.30 lakh.

6.1 Similarly benefits would also be extended to the new industrial units or to the existing units, on their substantial expansion, in other Growth Centres or HOC or industrial estates/parks/export promotion zones and commercial estates set up by the Government of Uttarakhand, new industrial unit or to the existing units, on their substantial expansion in the specified thrust industries located outside these growth centres and other identified location, would also be eligible for similar fiscal incentives.

7. Plant & Machinery
In calculation the value of plant and machinery, the cost of industrial plant and machinery as erected at site will be taken into account which will include the cost of productive equipment, such as tools, Jigs, dies and moulds, insurance premium and their transportation cost.
(a) The amount invested in goods carriers to the extent they are actually utilized for transport of raw material and marketing of the finished products, will be taken into account.
(b) Working capital including raw materials and other consumables stores, will be excluded for computing the value of plant and machinery.


8. Designated agency for disbursement of subsidy
The designated agency for disbursement of Capital Investment Subsidy will be notified in consultation with the State Governments concerned.

9. Procedure for claiming Capital investment Subsidy
Industrial units eligible for subsidy under the scheme will get themselves registered with the State Industries Department prior to taking effective steps for setting up the new units or undertaking substantial expansion of the existing units and indicate, in their claim for investment subsidy, their assessment of the total fixed capital additional fixed capital likely to be invested by them in the plant and machinery of their unit.

10. Procedure for disbursement of Capital Investment subsidy
The state Government will set up a Committee consisting of a representative each of the State Finance Department and State Directorate of Industries and if the industrial unit is to be assisted by a financial institution concerned, which would go into each case to decide whether it should qualify for the grant of subsidy and also about the quantum of subsidy.

10.1 In respect of a new industrial unit set up without assistance from the financial institutions or the State Government, the subsidy will be disbursed to the unit by designated Agency on the recommendation of the State government at the time the unit goes into production. Similarly, in respect of substantial expansion by an existing industrial unit without assistance from the financial institutions of the State Government, the subsidy will be disbursed to the unit by Designated Agency on the recommendation of the State Government after substantial expansion has been effected and the unit has gone into the increased production. However, in such case, where the State Government is satisfied about the safety of the public funds, not more than half of the amount of the estimated subsidy may be released prior to the unit going into production on the entrepreneur’s furnishing a proof of having taken effective steps to the satisfaction of state directorate of industries and the remaining amount be released only after the unit goes into production.
10.2 In respect of an industrial unit to be assisted by the State Government, the subsidy will be disbursed to the unit by Designated Agency on the recommendation of the State Government. In such cases, the contract/agreement to be drawn up between the State Government and the unit concerned may cover mortgage, pledge, hypothecation of the assets up to the amount of the subsidy. In respect of new industrial unit or in respect of substantial expansion of an existing industrial unit to be assisted by a financial institution the subsidy will be disbursed to the unit by the financial institution in as many installment as the loan in disbursed by the financial institution and simultaneously claimed by the financial institution from Designated Agency. In such cases, the contract/agreement to be drawn up between the financial institution and the unit concerned may cover mortgage/pledge/hypothecation of the assets of the unit upto the amount of the loan to be advanced by the financial institution concerned and the subsidy.

11. Rights of the Centre/State Government/Financial Institutions
If the Central Government/State Government/Financial Institutions concerned is satisfied that the subsidy or grant to an industrial unit has been obtained by misrepresentation as to an essential fact, furnishing of false information or if the unit goes out of production within 5 years after commencement, the Central Government/ State Government/Financial Institution concerned may, after giving opportunity to the unit concerned of being heard, ask the unit to refund the grant or subsidy already received.

12. Without taking prior approval of the Ministry of Commerce & Industry Department of Industrial Policy and Promotion/State Government/Financial Institution concerned, no owner of an industrial unit after receiving a part of the whole of the grant or subsidy, will be allowed to change the location of the whole or any part of industrial unit or effect any substantial contraction or disposal of a substantial part of its total fixed capital investment, within a period of 5 years after its going into production.

13. In respect of all units to whom the grant or subsidy has been disbursed by the Financial Institution/State Government, certificate of utilization of the grant or subsidy for the purpose for which it was given, shall be furnished to the Central Ministry of Commerce & Industry, department of industrial policy and promotion by the financial institution/State Government within a period of one year from the date of receipt of the last installment/full amount.


14. After receiving the grant or subsidy, each industrial unit shall submit Annual Progress Report to the Ministry of Commerce & Industry, Department of Industrial Policy and Promotion/State Government (as may be designated) about its working for a period of 5 years after going into production.

 
 
 
 


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