Incentives galore under N-E region industrial policy

New Delhi, Mar 29 | Updated: Mar 30 2007, 05:30am hrs
The Cabinet Committee on Economic Affairs (CCEA) on Thursday gave its approval to the North East Industrial and Investment Promotion Policy (NEIIPP) 2007 that would include Sikkim for the first time under its ambit.

Under NEIIPP, all new units located anywhere in the North Eastern Region, as well as existing units undertaking expansion, will be eligible for incentives for a period of 10 years.

As per the new policy, the incentives on capacity expansion will be given to units that increase capacity by not less than 25% of the value of fixed capital investment in a plant and machinery for the purpose of expansion and diversification, against an increase by 33.5% prescribed at present.

An excise duty exemption to the tune of 100% will be continued along with the 100% income tax exemption.

Capital investment subsidy will also be enhanced from 15% of the investment in plant and machinery to 30% and the limit for automatic approval of subsidy at this rate will be Rs. 1.5 crore per unit as against Rs. 30 lakh at present.

Sop Story

All new units in the NE Region will be eligible for incentives for 10 years
Excise duty exemption to the tune of 100% will be continued along with the 100% IT exemption
Capital investment subsidy will be increased from 15% of investment in plant and machinery to 30%
Limit for automatic approval of subsidy at this rate will be
Rs 1.5 crore unit against
Rs 30 lakh at present.

Such subsidy will be applicable to units in the private sector, joint sector, and cooperative sector as well as the units set up by the state governments of the North Eastern Region. The CCEA has also approved setting up of a empowered committee to decide on the capital investment subsidy.

The policy provides incentives to service sector, biotechnology and power generating industries, and North Eastern Development Finance Corporation Ltd. (NEDFi) would continue as the nodal agency for disbursal of subsidies.

The policy will provide incentives and an enabling environment to speed up industrialisation of the north-eastern region, which is otherwise growing at less than 4% per annum against the national average of 8%, information and broadcasting minister Priya Ranjan Dasmunsi said. The distinction between thrust and non-thrust industries as provided in the 1997 policy has been dispensed with since all industrial units located anywhere in the region would be covered under the new policy.

However, some particular products will not be eligible for incentives.