Scheme for Industrial Development of Jammu & Kashmir

Why in news?

• The Cabinet Committee on Economic Affairs approved the proposal of Department for Promotion of Industry and Internal Trade for Central Sector Scheme for Industrial Development of Jammu & Kashmir.

About the scheme:

• The scheme is a 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.
• 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.
• The scheme is also likely to give indirect support to about 35,000 persons.

Incentives under the scheme:

• The scheme is approved with a total outlay of Rs. 28,400 crore upto the year 2037.
• 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.
• Capital Interest subvention on loan amounts 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.

Key Features of the Scheme:

• 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 UT
• Scheme 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.

Prelims Question

Consider the following statements regarding recently unveiled “New Industrial Development Scheme for Jammu & Kashmir”:
1.It is a central sector scheme for development of Jammu and Kashmir Union Territory.
2.The scheme is a short-term program intended to run for five years only.
Which of the statements given above is/are correct?
(a)1 only
(b)2 only
(c)Both 1 and 2
(d)Neither 1 nor 2

Answer to prelims question