The government has formulated the New Industrial Development Scheme for Jammu and Kashmir as “Central Sector Scheme” for the development of industries in the newly established UT.
It will generate employment which directly leads to the socio-economic development of the area. The scheme, following the reorganization of the erestwhile state in 2019, is being implemented with the vision that industry and service led development of J&K needs to be given a fresh thrust. The Cabinet Committee on Economic Affairs, in a press statement, said emphasis is on job creation, skill development and sustainable development by attracting new investment and nurturing the existing ones.
Incentives available under the ambitious scheme
The Scheme would bring about capital investment incentive at the rate of 30 per cent in Zone A and 50 per cent in Zone B on investment made in Plant & Machinery, or construction of building and other durable physical assets is available. Units with an investment of up to Rs 50 crore will be eligible to avail this incentive.
The capital interest subvention is available at the annual rate of six per cent for maximum seven 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.
There is the GST Linked Incentive which is accessible at 300 per cent 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. And then, there is the Working Capital Incentive, which is available to all existing units at the annual rate of five per cent for maximum five years. The maximum limit of incentive for this is Rs 1 crore.
Investment and employment
The government is working towards bring investment and employment opportunities in J&K, and this scheme looks to do so. It aims to take industrial development to the block level in J&K. The Centre claims that this is the first time in any Industrial Incentive Scheme of the Government of India, and attempts for a more sustained and balanced industrial growth. Moreover, the 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.
Furthermore, the government hopes that the scheme will attract unprecedented investment and give direct and indirect employment to over four lakh people.