Cabinet approves industrial development scheme for J&K

The key objective of the industrial development scheme is to generate employment leading to the socio-economic development of Jammu and Kashmir.

Created On: Jan 11, 2021 13:54 ISTModified On: Jan 11, 2021 13:58 IST
Union Cabinet

The Cabinet Committee on Economic Affairs (CCEA) on January 7, 2021 approved an industrial development scheme for Jammu and Kashmir.

The Department for Promotion of Industry and Internal Trade had put forward the proposal for the scheme and it was approved with a total outlay of ₹28,400 crore.

Objective 

The key objective of the industrial development scheme is to generate employment leading to the socio-economic development of Jammu and Kashmir.

The scheme aims to give a fresh thrust to the economy of the union territory with more emphasis on skill development, job creation and sustainable development by attracting new investment and nurturing the existing ones.

Key Highlights 

Under the new scheme, companies will get capital intensive incentives, working capital incentives, capital interest subvention and GST-linked incentives. The scheme will benefit both small and large units. 

The smaller units with an investment in plant and machinery up to Rs 50 crore will get a capital incentive of up to Rs 7.5 crore.

They will also get capital interest subvention at the rate of 6 percent for a maximum of seven years.

The scheme will ensure less compliance burden without compromising on transparency. 

It is not a reimbursement or GST refund but gross GST is used to measure eligibility for industrial incentives to offset the disadvantages faced by the union territory. 

All existing units will be able to avail working capital interest incentive at the annual rate of 5 percent for five years and the maximum limit of incentive has been set at Rs 1 crore.

Background 

The central government had allocated Rs 30,757 crore for Jammu and Kashmir and Rs 5,958 crore for Ladakh for Fiscal Year 2021. 

So far, the central government has disbursed Rs 1,123.84 crore under various special package schemes.

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