Home Programmes and Schemes Himalayan North Eastern Package-II for Special Category States

Package-II for Special Category States

Brief about the Scheme

(i) Package-II for special Category State of J&K

(ii) Package-II for special category States of Himachal Pradesh and Uttarakhand

New Industrial policy and other concessions for the State of J&K were initially introduced on 14th June, 2002 for a period of ten years. The package has been extended for a further period of five years w.e.f. 15.06.2012 to 14.06.2017 with certain modifications. The new package provides Capital Investment Subsidy, Interest Subsidy and Insurance Subsidy to new industrial units and existing industrial units on their substantial expansion.

New Industrial policy and other concessions for the States of Himachal Pradesh and Uttarakhand were introduced initially on 7th January, 2003 for a period of ten year from 7.1.2003 to 6.1.2013. The package has been further extended during the 12th Plan period w.e.f. 07.01.2013 to 31.03.2017. The new package provides Capital Investment Subsidy to new industrial units and existing industrial units on their substantial expansion.

Detailed write-up:

  1. Scheme Objective

The Scheme of Package for Special Category States is under implementation for providing concession/subsidy to boost industrial investment in the States of Jammu & Kashmir, Himachal Pradesh and Uttarakhand in order to reduce regional imbalance.

  1. Coverage of eligibility

The scheme is applicable to all new industrial units and existing industrial units on their substantial expansion in notified areas and also to specified Thrust Industries outside the notified areas.

  1. Budget Availability/ Utilization since last 5 years

(Figures in Rs. Crore )

 

Year

BE

RE

Actual

Utilized

2010-11

65.00

65.00

65

65.00

2011-12

238.41

238.41

238.40

238.40

2012-13

90.00

74.15

74.15

74.15

2014-15

100.00

100.00

99.99

99.99

2015-16

25.00

25.00

23.008

23.008

2016-17

25.00

25.00

24.99

U.Cs not received.

Total

518.41

502.56

500.548

500.548

  1. Physical Progress against milestones till the end of previous year (i.e. cumulative till 2015-16 and during the year 2016-17

J&K

Since inception of the scheme upto 2014-15 (available information only upto 2014-15).

HP

Since inception of the scheme upto 2015-16

(Available only upto 2015-16)

Uttarakhand

Since inception of the scheme upto 2015-16

(Available only upto 30.11.15)

Number of Unit Setup

Total Invest-

Ment made

Employment

Generated

Number of Unit Setup

Total Invest-

Ment made

Employment

Generated

Number of Unit Setup

Total Invest-

Ment made

Employment

Generated

14778

4219.501

107541

33174

36165.32

263744

11404

15983.45

130633

 

 

 

  1. Salient Features in Bullet Form

  • Central Sector Scheme for Special Category State of Jammu & Kashmir.

For the State of Jammu & Kashmir, the modified Special Package Scheme is valid upto 14.06.2017. Under this Scheme following financial assistance is provided:

  • Capital Investment subsidy for all new units and to the existing units on substantial expansion- for MSME @ 30% of investment in plant and machinery with a ceiling of Rs 3 crore for Manufacturing units and Rs1.5 crore for Service Units, whereas for other units it is @ 15% of investment in plant and machinery with a ceiling of Rs 30 lakh.

  • Interest subsidy @ 3% on the average daily working capital loan for a period of five years from the date of commencement of commercial production.

  • Insurance subsidy for all new units and to the existing units on substantial expansion to the extent of 100% for a period of five years from the date of commencement of commercial production.

  • Central Sector Scheme for Special Category States of Himachal Pradesh & Uttarakhand.

  • Government of India had announced a package of industrial incentives for promoting industrialization in the States of Himachal Pradesh and Uttarakhand on 07.01.2003, which was implemented initially for a period of 10 years till 06.01.2013. It was further extended for another period from 07.01.2013 to 31.03.2017 with certain modifications. Under the modified package, Capital Investment Subsidy is provided for all new units and to the existing units on substantial expansion @15% of investment of plant & machinery subject to a ceiling of Rs. 50 lakh for MSME units and Rs. 30 lakh for others.

  1. Implementing Agency

Jammu & Kashmir:

  • Jammu & Kashmir Development Finance Corporation (JKDFC)

Himachal Pradesh & Uttarakhand:

  • Himachal Pradesh State Industrial Development Corporation (HPSIDC) and State Industrial Development Corporation of Uttarakhand Limited (SIDCUL) for the state of Himachal Pradesh and Uttarakhand respectively

Henceforth all disbursements will be through Direct Benefit Transfer via Public Financial Management System (PFMS).

  1. Monitoring and Review Mechanism

  • 100% physical verification of the actual establishment and working status of each of the units availing subsidy under the scheme is done by State Government through District Industries Centres (DICs). DICs submit Annual Report to the Directorate of Industries and Nodal Agencies i.e. JKDFC/ HPSIDC / SIDCUL about the functionality of the units. JKDFC/ HPSIDC / SIDCUL thereafter submit Annual Report to the Department of Industrial Policy and Promotion about the functionality of the units availing subsidy under the scheme. After receiving the grant or subsidy, each industrial unit is required to submit Annual Progress Report to the respective State Government with a copy to JKDFC/ HPSIDC / SIDCUL about its working for a period of 5 years after going into commercial production/operation.

  1. Findings of Evaluation, if any

The salient findings of the Evaluation Study undertaken by the erstwhile Planning Commission are as under:

  • The package to Special Category States has led to industrialization of these states but these states are still far behind other neighbouring states.

  • There was definite positive and significant impact of the package in the special category states in terms of increase in the number of factories, fixed capital, invested capital, number of industrial workers, total persons engaged in industry, wages to workers, total emoluments, net value added, value of output and gross fixed capital formation.

  • There are inequalities in level of industrialization not only among the states but also within the states themselves. Industrialization in each of these States revealed high degrees of intra-state regional inequalities.

 

  • Uttarakhand has gained the most from the package and has overtaken Himachal Pradesh in terms of industrialization. Jammu & Kashmir has lagged far behind perhaps due to its unique problems.

  • Significant employment benefits have been filtered away to other states as majority of the industrial workers in special category states are migrants.

  • The basic infrastructure in even the best industrial areas in the special category states of Himachal Pradesh and Jammu & Kashmir was grossly lacking with the exception of SIDCUL areas in Uttarakhand.

  • Comparatively much higher percentage of investors were from the other states. This validates the success of the package in attracting investment in special category states.

  • Almost 50% of the organisations reported difficulty in finding local employees. The condition of ensuring at least minimum employment to the bonafide residents in the special category states is often violated by industries.

  • 32.9% of the respondents reported about the understanding of the scheme as ‘fairly good’; 29% reported it as 'very good'.

  • The statement “The special package has helped in the industrialization of the state.” received the support of 89% respondents.

Scheme Guidelines (in searchable PDF / DOC) as amended up to 31.12.2016:

Circulars / Notifications / Orders with file name indicating subject line in a self-explanatory manner :


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