*CM to take up issue with PM, FM after resolving GST issue
JAMMU, June 23: Union Government’s Special Package for Industrial Development of Jammu and Kashmir has expired but the Department of Industrial Policy and Promotion (DIPP) of Government of India has yet not taken any decision regarding extension of incentives particularly in view of new tax regime being implemented across the country from July 1, 2017.
As the Special Package is imperative to maintain the enabling environment for ongoing industrial development of the State, the Chief Minister Mehbooba Mufti is likely to take up the issue with the Prime Minister Narendra Modi and Union Finance Minister Arun Jaitley in near future.
The package of industrial incentive for the State of Jammu and Kashmir was announced on June 14, 2002 for a period of 10 years up to June 14, 2012. Following its expiry, the State again persuaded the Union Government for its extension and it took one year to the Department of Industrial Policy and Promotion (DIPP) to take final decision.
Accordingly on June 14, 2013 the Union Government extended the Special Package for Industrial Development of J&K for a further period of five years and the same was given effect from June 14, 2012 when the earlier package had expired. The five years extended period of Special Package has expired on June 14, 2017 as such industrialists cannot avail the benefits/incentives till its further extension or announcement of new package by the Union Government, official sources told EXCELSIOR.
In the recent past, a delegation from Jammu and Kashmir led by top brass of Industries and Commerce Department called on the officers of Department of Industrial Policy and Promotion and stressed the need for continuation of incentives on the ground that without Special Package it would not be possible for giving necessary impetus to the industrialization, sources informed.
A number of representatives of different industrial associations and confederation were also in the delegation and they elaborated the officers of DIPP about the positive results yielded by the Central Package so far, sources said, adding they categorically told the DIPP that unless the package is extended further or new one is announced industrial investments in J&K would suffer severe setback.
“As the DIPP has yet not taken any decision on further extension of incentives the State particularly the industrialists are watching the situation with crossed fingers”, they said, adding “the DIPP may take time to arrive at any decision in this regard in view of new tax regime being implemented across the country from July 1, 2017”.
Stating that DIPP would prefer to announce new package instead of extending the earlier one keeping in view implementation of Goods and Services Tax (GST), sources said, “no time-frame can be specified for fresh incentives as after working out a Special Package the DIPP will have to obtain approval of the Union Government and entire process is going to take several months”.
They informed that Chief Minister Mehbooba Mufti is also likely to take up the demand of industrialists with the Prime Minister Narendra Modi and Union Finance Minister Arun Jaitley after resolving the issue on GST implementation in J&K, which still needs consensus although only a week has left for countrywide roll out of new tax regime.
“A number of industrialists have already taken up the issue of continuation of Special Package with the Chief Minister”, sources further informed.
It is pertinent to mention here that benefits under the expired Special Package were capital investment subsidy at the rate of 15% of investment in plant and machinery subject to ceiling of Rs 30 lakh; 3% interest subsidy on the average of daily working capital loan to all new units for a period of 5 years from the date of commencement of commercial production; Central Comprehensive Insurance Subsidy with 100% reimbursement of premium to all new and existing units on their substantial expansion for a period of 5 years from the date of commencement of commercial production etc.
All the new units in the notified area in the State of J&K excluding negative list and all new units of thrust industry outside notified area were eligible for subsidy under the expired package. In the erstwhile package, subsidy of Rs 158.45 crore (up to March 31, 2013) was released during a period of 10 years and the total outlay for five years period, which expired on June 14, 2017 was Rs 295 crore.
The intensity of positive results yielded by the Special Package can be gauged from the fact that thousands of new units were set-up during the period of Special Package generating employment for lakhs of persons.