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North East Industrial & Investment Promotion Policy (NEIIPP)

Brief about the Policy

With a view to give a further boost to industrialization in the North Eastern Region, the erstwhile North East Industrial Policy (NEIP), 1997 was revised and a new policy, namely North East Industrial & Investment Promotion Policy (NEIIPP) 2007, was notified w.e.f. 1.4.2007 which will remain in force upto 31.03.2017. Benefits under NEIIPP, 2007 have also been extended, for the first time, to select Service Sector units, Bio-technology units and Power Generating units (up to 10 MW), besides industries in the manufacturing Sector.

Scheme Objectives: - The objective of the scheme is to boost industrialization in North Eastern Region.

Coverage and eligibility: - NEIIPP, 2007 covers the entire North East Region comprising States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim. NEIIPP, 2007 is applicable to all  industrial  units in manufacturing Sectors, select service sector, Biotechnology and Power Generating units (up to 10 MW) (barring the units producing tobacco and manufactured tobacco substitutes, pan masala and plastic carry bags of less than 20 microns, refineries, Calcined Petroleum Coke & Bitumen Emulsion and units engaged in peripheral activities like preservation during storage, cleaning operations, packing, re- packing, labeling or re-labeling, sorting, alteration of retail sale price etc.).

Budget Availability / utilization since last five years: - The budget allocation for schemes under NEIIPP, 2007 for the 12th Five year plan is Rs.700 crores, however, Rs.841.72 crore (including Rs.170 crore allocated at BE 2016-17) has already been released till 29.03.2017. Details of budget availability for the Policy during the last five years are as under:

(Rs. in crore)

Year Plan Allocation Plan Expenditure Non-Plan Allocation Non-plan expenditure
100.00 99.83 - -
150.00 150.00 - -
221.90 221.90 - -
200.00 200.00 - -

(Rs. in crore)

Year Plan Allocation Plan Expenditure Non-Plan Allocation Non-plan expenditure
Q1 170.00 169.97 - -
Q2 0.03 - - -
Q3 0.03 - - -
Q4 0.03 0.03 - -

Physical Progress against milestones till the end of 2015-16: - As per the information provided by the State Governments of North Eastern Region, the achievements in terms of Industrial units set up is 27644 units, Investment made is Rs. 11466.22 crores and Employment generated (in nos.) is 228224.

Salient features of the Policy: Benefits available under NEIIPP, 2007 are:

  • Central Capital Investment Subsidy Scheme, 2007:-The Scheme provides for subsidy @ 30% of the investment in plant and machinery or additional investment in Plant and Machinery by way of substantial expansion to all new units as well as existing units which go in for substantial expansion. The scheme has been revised w.e.f. 22.11.2016 and the subsidy is now limited to Rs. 5.00 crore per industrial unit operating in manufacturing sector and Rs. 3.00 crore per industrial unit operating in services sector.
  • Central Interest Subsidy Scheme:- The Scheme provides for interest subsidy @ 3% on the working capital loan availed by an eligible unit from scheduled banks or Central/State financial institutions for a maximum period of 10 years from the date of commencement of production. The scheme has been revised w.e.f. 22.11.2016 and now the interest subsidy will be available only on term loans of 5-10 years maturity taken to finance capital expenditure on setting up of industrial units or for capital expansion on substantial upgradation/ modernization. The interest subsidy will be limited to term loans up to Rs. 10.00 crore to subsidize cost of borrowing above Prime Lending Rate (PLR) to the extent of up to 3% p.a. so as to ensure that post-subsidy interest rate does not fall below the PLR of the concerned bank or financial institution.
  • Central Comprehensive Insurance Scheme: - The Scheme provides for reimbursement of 100% insurance premium for a maximum period of 10 years from the date of commencement of production.
  • 100% Income Tax exemption for a period of 10 years from the date of commencement of commercial production
  • Excise Duty exemption on value addition basis.

Implementing Agency: - DIPP is the implementing agency of NEIIPP, 2007. North Eastern Development Finance Corporation Ltd. (NEDFi), Guwahati is the nodal agency for disbursal of subsidies under various subsidy schemes of NEIIPP, 2007.

Monitoring and Review Mechanism: - Each component of the Scheme under NEIIPP, 2007 has inbuilt provision of monitoring the implementation of scheme viz. refund of grant if the beneficiary unit gives false information or goes out of production within 5 years of commercial production, no change of location of industrial units without prior approval of the Central/State Government concerned, furnishing of utilization certificate of subsidy within a period of one year of receipt of full amount, submission of annual progress report by the beneficiary unit to Central/State Government concerned, about its working for a period of 5 years after going into production etc.

Evaluation of the Scheme: - DIPP carried out an evaluation study of NEIIPP, 2007 to assess its impact through an independent agency. The Study Report was received in March, 2015 and the Study recommended as follows:

  • Focus should be given to promotion of MSME Sector as they contribute more to employment generation
  • Subsidies under the Policy to be limited to an investment of Rs.10 crore on Plant & Machinery
  • Focus to be given to States like Nagaland, Manipur, Mizoram & Sikkim which received less benefits
  • Steps should be taken by State Govts. of NER to establish Industrial Clusters
  • Improvement in training of State Government officials and conduct of awareness generation activities among entrepreneurs
  • Improvement in monitoring mechanism and conduct of periodic reviews

Based on the recommendation of the Study and other prevailing circumstances, some Schemes of the NEIIPP, 2007 have been revised and notified on 22.11.2016 as given in the salient features of the Policy.


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