New Industrial Policy 1998 to 2003: Jammu
& Kashmir
The following Industrial
Policy is hereby laid down for the years 1998-31.3.2003 for general information
1. The
Industrial Policy shall cover all the new industrial units which may be established
in the State, except those in respect of which the promoter may have taken
effective steps for implementation of the project, and as such may claim to
avail of any benefit under the old Package of Incentives which was in force
immediately before announcement of this policy
2. The
government shall follow an open door policy for the investors from within the
state, other parts of the country as also from abroad, in the last case in
accordance with the policies w as may be framed by the Government of India from
time to time. In addition to the resources of the promoter, his entrepreneurial
skills and experience shall be given due recognition by the Government
3. For
achieving the goal of rapid Industrialisation in the State, the Government has
adopted the following strategy:-
- Development of Infrastructure:
1. The
Government owns developed Industrial estates in all the districts of the State,
in particular, a number of industrial estates have been developed at and around
Jammu city in Jammu region and at and around Srinagar in Kashmir valley, for
ready allotment of industrial plots to the promoters. A Growth Centre at a cost
of Rs 60 crores is under development at Samba, 40 kms from Jammu on the
National Highway (NII I) toward Punjab. A Textile City is proposed to be
developed in kathua close to the J&K-Punjab border. An Export promotion
Industrial Park (EPIP) is under execution at Kartholi about 20 km from Jammu on
N H.I
2. An
Industrial Infrastructure Development (IID) Centre is under execution at Batal
Balian, near Udhampur 5town about 70 kms from Jammu on NII 1, leading to
Srinagar.
3. A Growth
Centre is being tqaken up for implementation at Lassipora, at a short distance
of about 11 kms from the NII I), nearly 40 kms from Srinjgar in Kashsmir valley
toward south (leading to Jammu) An Export Promotion Industrial Park (EPIP) is
being taken up in near future, near Srinagar airport. An IID Centre shall also
be taken up for development in near future, quite near to the Srinagar City as
well as Srinagar airport. An existing Rangreth electronics complex, just about
6 kms from Srinagar city.
4. The
Government also has plants to develop industrial estates with specialised
facilities for manufacturing/processing of electronics goods, leather and leather
goods, sports goods, food processing and gems cutting and polishing.
a. Policy of land allotment
1. The
government shall allot land on long lease of 90 years in the industrial estates
and developed areas on first come first served basis. In case of large area
requirements, land may be acquired in areas selected by the entrepreneur, and
allotted on lease to the promoter. The amount of premium is already subsidised.
However, further capital subsidy of 50% shall be available at the time of
availment of term loan for construction work. The plot allotted in the
industrial estates shall be transferable subject to some stipulations and on
the condition that the end use of the land shall not be changed from industry
to another purpose.
a. Capital Investment Subsidy (CIS) and financial support on
Investment:
9.Capital
Investment subsidy (CIS) @ 30% SUBJECT TO A MAXIMUM LIMIT OF Rs 30 lakh shall
be available on capital investment. In priority areas of electronics including computronics
and software, food processing including agro based industrial (excluding
conventional grinding/extraction units), floriculture, handicrafts, leather
processing and leather goods, sports goods, forest-based industry, (excluding
saw mills and joineries), processing of aromatic plants and herbs,
pharmaceuticals based on herbs, bulk drugs, silk reeling, weaving, processing
printing and made ups, items of textile goods including spinning, weaving ,
processing , printing hosiery and made ups, cutting and polishing of stones,
gems and jewelry, precision engineering and other areas identified as thrust
areas, the uper limit of the total subsidy has been increased to Rs 45 lakhs.
For prestigious units (thouse withn capital investment of minimum Rs 25 crores)
the upper limit of CIS shall be Rs 75 lakhs in thrust areas and Rs 60 lakhs
otherwise. Over and above this amount, 100% subsidy on project feasibility
report and 100% subsidy on testing equipment (with some monitory ceilings)for
maintaining quality standards shall also be available. Purchase of captive DG
sets upto 1 MW also qualifies for 100% capital subsidy.
10. The
J&K State Industrial Development Corporation (SIDCO) shall join the capital
investment of the promoters on a selective basis on Joint sector/Assisted
sector approach. The financial assistance is also available upto under the
National Equity Fund Scheme of the Small Industries Development Bank of India
(SIDBI) for units in then SSI sector.
a. Supply of Power:
11. The State of J&K is moving
toward self sufficiency in production of electrical energy, Presently, there
are gapsnin its peak load requirements and the maximum supply available. But as
a matter of policy, the 8industry shall be given priority while making quality
power supply to the consumers. The State has a very vast potential for
generating hydron electricity, with about 15000 MWs already identified. The
State has recently sighned MOUs with experienced and reputed international
firms for execution of 450 MWs Baglihar Project, 390 MWs Kishanganga Project
and also for investigation of 280 MWs Uri Phase II Project. With the
commissioning of these power projects over the next about 4 years, the State
would become self sufficient in power generation.
12. All the
Industrial estates shall have dedicated power-receiving stations as per their
assessed load. Power connection shall be available at the doorsteps of the
promoter. Those needing supply of energy at IIT transmission shall be required
to install their own receiving stations.
13. The
industrial power-tariff is regulated by the Statute, presently, the tariff for
industry is fairly attractive.
14. The
industrial units may install their own captive power generation plants. In case
of these power stations, no electricity duty shall be levied by the government
a. Clearances and
procedures:
11. For the
projects which can be accommodated within the sanctioned policy and do not
require assistance beyond the sanctioned Package of Incentives, a High Level
Empowered Committee has been constituted to give clearances on behalf of all
the concerned government departments and agencies, saving the promoter of the
botheration of moving from door to door.
12. Till the
state reaches self sufficiency in power generation, labour/capital intensive
units not needing bulk, power supply shall receive top priority by the High
level Empowered Committee.
a. Pollution Control and Environment Protections
11. The
State accords highest priority to the control over water and air pollution and
to preservation of environment. There are laws governing these subjects, the
enforcement of which is monitored by the J&K State Pollution Control Board
which functions as an autonomous agency, in close cooperation with the Central
Agencies. The industrial units shall have to meet the requirements laid down by
the statute. The Board shall give necessary clearances on being satisfied that
the required pollution control measures have been proposed to be adopted by the
promoter. SIDCO shall help the promoter in getting these clearances
expeditiously.
12. The
Government shall take up provision of effluent treatment plants in the
industrial estates as a common facility on selective basis. The Government
shall also help the industry in adopting such measures through the Central
Schemes of financial assistance.
a. Thrust Areas:
11. The
Government has identified certain thrust areas for accord of priority in the
matter of industrial growth. The projects in these areas shall receive priority
in the matter of allotment of land, sanction of power and other clearances from
the High Level Empowered Committee as also in the matter of grant of
incentives. For the time being these areas are- electronics including
computronics and software, food processing including agro-based industries
(excluding conventional grinding/extraction units), floriculture, handicrafts ,
leather processing and leather goods, sports goods, forest based industry
(excluding saw mills and joineries), processing of aromatic plants and herbs,
pharmaceuticals based on herbs, bulk drugs, silk reeling, weaving, processing
printing and made ups, items of textile goods including spinning, weaving,
processing, printing, hosiery and made-ups, cutting and polishing of stones,
gems and jewelry, precision engineering and other areas identified as thrust
areas.
Package of Incentives (1998-31.3.2003)
1. Allotment
of land/Industrial Plots/Sheds and Flats
a. The
allotment of land/industrial plots/sheds and flats shall be on lease basis for
a period of 90 years.
b. The rent
charged for the period of lease should be invested in maintenance of facilities
the industrial estate. In case of lands outside the industrial estates, where
no maintenance is required to be done by any Government agency, only a nominal
lease rent shall be chargeable if the entire expenditure on the cost of land
has been incurred by the promoter
c. Premium
rates shall be notified by the Government from time to time and shall not
change after land has been allotted to the promoter and a lease deed signed by
him after paying the amount of premium
d. Land
allotted on lease shall be transferable subject to some stipulations and also
subject to the condition that the transferee shall not use the land for
purposes other than setting up or running another industrial unit in the area
with due clearances from the angle of pollution etc.
1. Pre/investment
studies/Feasibility reports
a. project
profiles shall be prepared by the Directorate of I&C. SIDCO and SICOP and
shall be available off the shelf to the promoters at a nominal price only to
cover the cost of printing.
b. The
promoter may get a project feasibility report prepared from J&K ITCO,
SIDCO, SISI or any other agency as may be approved by the Director, I&C
from time to time. The entire expenditure incurred on such feasibility reports
shall qualify for hundred percent subsidies at the time of execution of the
project. The promoter may get a report prepared also from any other specialist
agency/reputed consultants.
c. The
detailed feasibility report/detailed project report shall qualify for capital
investment subsidy at the rates applicable to other items of capital investment,
at the time of release of capital investment subsidy.
d. The cost
of obtaining technical know-how from abroad shall be treated as part of the
capital investment subject to the clearance of the Central Govt. In case of the
indigenous technology/technical know-how, the same shall also qualify for
capital investment subsidy if obtained from any reputed national or regional
organisation. Provided that if the cost of such technical know-how exceeds 10%
of the total capital cost, only such amount as is within 10% of the total
capital investment shall qualify for working out capital investment subsidy.
Power tariff/DG sets.
a. Power
tariff for the industrial sector is subsidised. The Power Development Department
shall revise and announce the tariff from time to time, keeping in view the
Government policy to encourage the development of industry in the State and the
power tariff prevailing in the neighboring states.
b. 100%
subsidy shall be allowed on new DG sets of 10 KWs to 1000 Kws capacity
purchased from reputed/standard companies. The subsidy shall be available to
the unit after it has been verified that the diesel set has been actually
installed.
c. The
amount of subsidy on purchase of DG set shall be paid only through a bank (or
the concerned financing agency, if any) even if the promoter may not have taken
any loan for purchase of the DG set.
d. 50% of
the amount of subsidy on DG set shall be paid on verification of installation
and the remaining 50% shall be paid after expiry of period of one year of
installation
e. The DG
set shall not be shifted from the State for a period of ten years counted from
the date of installation or to any other unit except with the approval of the
Director, IK&C. If the unit makes any such request to shift the DG set to
outside the State, the same shall be considered only in case the unit deposits
the entire amount of the subsidy availed of together with interest thereon at
the prevailing rate of interest on term loans
f.
Government shall allow setting up of captive Thermal Power Generating Stations
(subject to Pollution Control measures to be adopted by the promoter) and also
electrical energy through such captive Power Generating stations for a period
of 25 years, The station may be set up by an individual promoter or a group of
promoters and the energy thus generated may be shared by them or sold to other
consumer.
1. Price Preference
a. Upto 15%
Price preference shall be available to the SSI units, in all government
purchases except in case of items brought on the negative list. The price
preference shall also apply in case of any goods purchased by the public sector
undertakings/boards purchased for their own non commercial use. The price
preference shall not cover items purchased by the public sector undertakings
and boards who may use such goods as raws material, consumables, packing of
their products which are, in turn meant ton be sold on commercial basis either
to the government departments or to the private consumers or in the open
market.
`
b. Nothing
contained in the proceeding para shall mean to restrain the government from
purchasing or allowing any of its departments/boards corporations to purchase
any consumption/commercial goods from another manufacturing organisations of
the Government such as JKI, JKML, SIDCO, Agro Industries Corporation, J&K
Handloom Development Corporation, KVIB etc. whether without inviting tenders or
after inviting tenders.
c. In all
other cases where the price preference applies, the following procedure shall
be followed, in suppression of any other government departmental instructions,
if issued to the contrary, to regulate the purchases of the Government
departments:-
i.. every
purchase committee of the Government departments shall include a member from
the Directorate of the I&C , not below the ranks of a General Manager. Any
Committee constituted without any such representative of DIC shall be void ab
initio.
If the goods offered by a
registered SSI unit carry quality mark, for example of BIS, FPO etc. por if the
goods otherwise are of standard quality, and if the rate quoted by the SSI unit
is within 15% of the lowe3st rate quoted by any other tenderer not being
another local rgistered SSI unit, then Purchase Committee shall decide to place
order on such local registered SSI units, if the local SSI unit has the requite
registered capacity to meet the tendered requirement.
If the rate quoted by the local registered
SSI unit is not within 15% the Committee shall negotiate the rate with the
local registered SSI unit and place order on such negotiated rate
No tender from a local registered
SSI unit shall be rejected in the contravention of the aforementioned
instructions. In case the purchase committee faces any difficulty in carrying
out these instructions, it will refer the matter to the I&C Department in
the secretariat and their decision in the matter shall be final and binding on
the purchase committee/the department.
v. if a
local registered SSI unit is on rate contract with the DG S&D , DG, QA,
NSIC , etc. for a particular item needed by a Government department, it shall
purchase the item from such SSI unit without inviting tenders.
vi. It would be lawful for any local registered SSI
unit to quote through SICOP /SIDCO or to seek suply order through SICOP./SIDCO
or to request/authorize SICOP /SIDCO to represent its case before the
purchasing department. In all such cases, SICOP/SIDCO shall be tgreated at par
with the SSI unit or units whose cased it may be representing for all matters
connected with the finalisation of the contract, delivery, of supplies and the
price-preference.
vii. no
purchasing department shall force or cause any local registered SSI unit to get
more quality tests conducted at its own cost if such unit is registered with
the BIS, DGS&D, DG QA etc. for ISI/ISO 9000/FPO mark.
viii. no
purchasing department shall tender for purchase of any item with a
branded/patched name of any manufacturer or supplier.
ix. if the
department supplies raw material to a local registered SSI unit, directly or
through SICOP , such a steel billets, wire rods for conversion into the end
product required, such as structural steel, crate wire etc. the conversion rate
may be worked out by the concerned administrative department (such as PWD) and
a rate contract be sanctioned
x. for any
item where the market price for the goods manufactured by mills are controlled
by statutory orders, which are not applicable to the SSI units, the price
preference may be negotiated on the basis of such statutory rates
1. Earnest money/securitry deposit
i. SSI units
shall be required to pay only 50% of the amount of earnest money prescribed by
the tendering authority or Rs 5000 whichever is lower.
ii. tender
documents shall also be supplied to the SSI units @ 50% of the price of the
doucments or Rs 100 whichever be lower
iii/. SICOP
/SIDCO shall be treated at par with the SSI units for the purposes of the aforementi9ned
provisions
6 Stamp
duty
Mortgage deeds in favor of the
financing institutions required to be signed by the promoters shall be exempted
from payment of stamp duty.
1. Toll Taxes
i. There will
be no additional or special toll tax on the raw material, fuel and consumables,
procured from outside the state by the existing local SSI units, till 31.3.2003
brought on the negative list from time to time
ii. There
will be no additional or special toll tax on finished goods manufactured by the
existing local SSI, Medium and Large units and sent outside the state upto
31.3.2003 and by the new SSI, Medium and large units for a period of five years
from the date of production, except on items brought on the negative list from
time to time
iii. there
will be no additional or special toll tax on the raw materials, fuels and
consumables brought from outside the state by the existing medium and large
units upto 31.3.2003 and for a period of five years from the date of production
in case of new units except in case of items brought on the negative list from
time to time. For items on the negative list, this concession shall be
available on the component, which is used in manufacturing of finished goods,
which are subsequently sent outside the state. For this purpose the medium and
large units shall initially pay additional or special toll tax when bringing in
the raw material, fuels and consumables and the amount shall be
refunded/adjusted against the fresh procurement of raw material/fuel
consumables when the goods leave the state.
iv. There
will be no additional or special toll tax on components, machinery, plant
building material and other equipment procured from outside the state for
building the factory, for a period of five years from the date of registration
of the unit in SSI, Medium or Large sector.
v. There
will be no additional or special toll tax on 100% export oriented units on the
goods exported under proper export documents from the state to any foreign
country.
vi. SICOP
/SIDCO/JKHC /JKHDC/HHRO shall not be required to pay additi0onal or special
toll tax on raw materials, fuels, consumables, procured from outside the state
for exclusive use of the SSI/Handicrafts/Handloom units for sales or exhibition
outside the state.
1. General Sales Tax.
i. There
will be no GST on sales of finished goods by the existing units till 31.3.2003
and for a period of five years from the date of production ---- until except on
items brought on negative list
ii. There
will be no GST on the raw material procured by the local --- large units except
on items brought on negative list
iii. There
will be no GST on the sale of finished goods manufactured by the new new medium
and large industrial units upto a ceiling on such amount of GST which would
have been otherwise payable equivalent to 15 % of the total capital investment
made in the unit for a period of 5 years from the date of production whichever
occurs earlier except on items brought on the negative list.
iv. There
will be no GST on purchase of machinery and equipment for construction of the
factory for a period of five years from the date of provisional registration by
the SSI units.
v. The above
concessions shall also be available to SICOP while acting on behalf of local
registered SSI units.
9.Central
Sales Tax
the local existing SSI units shall
be exempt from charging and payment of CST on sale of their finished goods
outside the state upto 31.3.2003 and the new SSI units for a period of five years
from the date of production
1. Special provision for prestigious units:-
1)
Notwithstanding anything contained in paras 7,8 and 9 above, prestigious units
i.e those having capital investment of Rs 25 crores or above shall have the
option to avail of full exemption from payment of GST,CST and
special/additional toll tax for a period of 5 years from the date of production
or until such amount of exemption reaches the levels of 150% of capital
investment in the project whichever occurs earlier.
2) Notwithstanding
anything contained in para 7,8 and 9 above , those prestigious units which come
into commercial production in the year 1998, shall have the option to avail a
power tariff freeze at the rate of Rs 1.50 per unit for a period of five years
from the date of commercial production
for purpose of paras 7,8 ,9 and 10
above , all the new units shall also have the option to ccount the period of
five years from the date of productio9n or from the succeeding financial year.
Capital Investment Subsidy (CIS)
CIS shall be available if the item
for manufacturing has not been brought on the negative list.
i. CIS
shall be available to the new SSI, Medium and Large units ,30% of the capital
investment subject to upper limit of Rs 30 lakhs
ii. In case
of a prestigious unit which is hereby defined as a unit with capital investment
of Rs 25 crores and above, the limit of CIS shall be Rs 60 lakhs.
iii. In case
of the following thrust areas, the upper limit of the CIS shall be Rs 45 lakh
and Rs 75 lakh in case the unit also falls in the prestigious category:
Food procesing and agro based
industry, electronics including computronics an software, leather processing
and leather goods, sports goods, forest based industry excluding saw mills and
joinry, processing of aromatic plants and herbs, pharmaceuticals based on
herbs, bulk drugs, silk reelding, weaving, processing, printing ups, cutting
and polishing of precious stones, gems and jewelry, precision engineering and
other areas identified as thrust areas.
12. Interest subsidy
5% subsidy shall be payable on the
working capital facilities available from the commercial banks to all existing
units upto 31.3.2003 and to all new units for a period of five years from the
date of production or from the subsequent financial year as may be decided by
the units subject to the following conditions:-
i.the item
for manufacturing is not on the negative list
ii. the
subsidy shall be passed on to the commercial bank at the end of the financial
year.
i. After the
first year of entitlement , the subsidyh shall be releazsed only if the unit
has increased its production and the same condition shall be applicable to the
remaining years of entitl.ement, in reference to each proceeding year
ii. This
afgorementioned condition shall not be appl.icable for subsequent years if the
unit attains 95% production capacity utilisation before completing its period
of entitlement for five years and the same does not go down during the
subsequent years of entitlement.
12. Testing
equipment
100% CAPITAL SUBSIDY SHALL BE
PROVIDED BY THE GOVERNMENTNONINSTALLATIONNOF TESTING EQAUIPMENT, SUBJECT TO A
MAXIMUM AMOUNT OF Rs 50 lakh and also restricted to 25% of the total capitaln
investment if the cost of testing equipment exceeds 25% of the total capital
investment provided that in case of the existing units the same is installed
within 31.3.2003 or in case of the new units the same is installed wsithin 5
years of its going into productiion. 70% of the amount shall be disbursed on installation
and the balance 30% shall be disbursed after one year.
The condition of 25% of the
capital investment shall not apply in case the amount of subsidy involved does
not exceeding Rs 5 lakhs
The units which obtain ISO 9000
certificateion shall be entitled to a lump sum awa;rd of Rs one lakh or 100% of
cost paid for such registration whichever be higher subject to a maximum of Rs
2.50 lakhs , provided that such certification is obtained before 31.3.2003
14. Substantial Expansion:
An existing unit which increaes
its installed capacity by at least 25% or adds aditional line of manufacturing
so as to increase its capacity of turn over by 25% in terms fof volume or value
of finished goods shall be deemed to have gone for substantial expansion and
shall be entitled to the benefits on capital investment on such expanded
capacity as if the investment would have been made in a new unit
15. Air Freight sugsidy:
Airfreight subsidy shall be
available on finished goods for any destination @ 50% subject to a maximum of
Rs 5 lakhs for new units for a period of five years from the date of production
16.Reaserch & Development(R&D)
50% Subsidy shall be available for
expenditure incurred on R&D through any reputed organisation for any
project undertaken on sponsorship on any existing or new unit subject to
maximum of Rs 5 lakh for each such project duly approved by the Govt.
25% subsidy shall be available on
R&D expenditure of any unit on non recurring items of expenditure subject
to prior approval of the proejct by the Govt. upto a maximum limit of Rs 5
lakh.
17. Human Resource Development
50% of the cost of training shall
be borne by the Govt. subject to Rs 5000 per post per trainee and subject to Rs
1 lakh per annum for any unit for a period of five years. In case of women
trainees the corresponding figures shall be 75% , Rs 7,500 and Rs 1.50 lakhs
respectively.
For programmes of skill
development leading to employment of trainees into employment, 50% of the cost
of training shall be borne by the Govt. on approved programmes subject to
maximum of Rs 5 lakhs per unit. In case of women trainees, the corresponding
figures would be 75% and Rs 7.5 lakhs .
18. Interest subsidy for technocrats
5% interest subsidy on
term loan shall be available for technocrats (Engineering Graduate/MBAs) on
term loan availed from financing institutions.
20 Transport subsidy
This is a Govt. of India scheme
and shall continue as such.
11. Sick units.
A fund shall be constituted for
providing financial assistance for revival of sic k units. Assistance to the
extent of 30% of the total additional loan requirement of the sick unit may be
provided to the sick unit provided that the amount of such assistance shall not
exceed 30% of the capital cost of the project worked out after conversion of
any outstanding liabilities of financing institutions into term loan. The
assistance shall be in the form of a soft loan with 1-% rate of interest per
annum. The amount may be used for meting margin money needs of the sick unit as
also for liquidating the liabilities of Govt. Deptts.
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