Balanced regional development through locational dispersal of industries had been one of the

Transcription

1 CHAPTER - VI 6 INDUSTRIAL DEVELOPMENT OF BACKWARD AREAS AND SPECIAL CATEGORY STATES Balanced regional development through locational dispersal of industries had been one of the principal objectives of the successive Five Year Plans and Government s Industrial Policy. The Industrial Policy of 1991 aimed, inter-alia, to spread industrialisation to backward areas of the country through institutions, appropriate initiatives and infrastructure investments that would facilitate private investment. Even though the initiative for industrial development of backward areas lies primarily with State Governments, the Union Government has been supplementing their efforts through various schemes and incentives. Several Centrally Sponsored Schemes are in operation for the development of backward areas in the country. GROWTH CENTRE SCHEME With a view to promote industrialisation of backward areas in the country, the Government of India, in June, 1988, had announced the Growth Centre Scheme under which 71 Growth Centres (Appendix-XI) were proposed to be set up throughout the country. Growth centres would be endowed with basic infrastructure facilities such as power, water, telecommunica-tions and banking to enable them to attract industries. These have been allocated amongst States on the basis of combined criteria of area, population and extent of industrial backwardness. The Government of India has sanctioned all the 71 growth centres including three Growth Centres sanctioned recently at Sigaddi, District Pauri in Uttranchal, Chaygaon-Patgaon in Kamrup District of Assam and Salghari- Samlik Marchak in Sikkim which fall under the Special Category States. The Central Government assists the State Governments by contributing upto Rs.10 crore by way of equity for each growth centre. The balance funds are to be raised by the State Governments and their agencies that implement the projects. The amount of Central assistance has been increased to Rs.15 crore for each growth centre in the North Eastern Region including Sikkim, Himachal Pradesh, Uttranchal and Jammu & Kashmir in view of the continued backwardness of these regions. The total amount of Central assistance released under the Scheme since its inception is Rs crore. Full central assistance has been released to the 26 Growth Centres (Appendix-XII) 39

2 Year Amount (Rupees in crore) A token provision of Rs. five crore was made for the Growth Centre Scheme in the Budget of Department of Industrial Policy and Promotion for the year as the Scheme was under review by the Planning Commission for taking a view on its continuation or otherwise. Now, the Planning Commission has agreed to release funds to the Growth Centres which are in advanced stage of completion or where most of the expenditure has already been incurred or committed. Planning Commission has also agreed to take up three new Growth Centres in the Special Category States. It is also stated by the Planning Commission that Deptt. of Industrial Policy & Promotion would need to accommodate these resultant requirements within the overall Annual Plan outlay of the Department. Hence, an amount of Rs crore was made available through re-appropriation from the outlay of this Deptt. In addition, an amount of Rs crore was made available from the lumpsum provision of NE & Sikkim and Rs. 25 crore from the Special Package Section to the Growth Centre Scheme for the year Table Financial Progress under the Growth Centre Scheme (Rupees in crore) As on Total Central assistance released to sanctioned growth centres Number of growth centres where full Central assistance released Contribution made by the State Governments and their agencies Total Resources committed 1, , Table Central Assistance released under Growth Centre Scheme

3 Table Physical Progress (Rupees in crore) As on Number of Growth centres where land acquisition commenced/completed Functioning growth centres where Plots/sheds allotment has commenced Capital investment Employment generation (Numbers) Impact Assessment Study All the State Governments where full Central Assistance has been released under the Growth Centre Scheme have been asked to undertake impact assessment study. Industrial Infrastructure Upgradation Scheme (IIUS) With a view to enhance international competitiveness of the domestic industry by providing quality infrastructure through public-private partnership in selected functional clusters/locations which have greater potential to become globally competitive, the Deptt. of Industrial Policy & Promotion has formulated a new Scheme in the name of Industrial Infrastructure Upgradation Scheme (IIUS). The salient features of this scheme include creation of quality infrastructure in existing industrial clusters/locations with high growth potential requiring strategic interventions in providing common facilities for transport, road, water, power, gas/fuel supply, effluent treatment, solid waste disposal, etc. In addition, Product design, Information & Communication Technology support and such other physical infrastructures would also be provided. Initially clusters/locations will be taken up for development in the Tenth Plan period. Special feature of this new initiative is that the scheme will be implemented through Special Purpose Vehicle (SPV) formed by the cluster /industry association at the individual cluster level so as to ensure that the infrastructure development/ upgradation is user-driven. This arrangement will also ensure the creation of useful assets and sustainability of assets created. The scheme is expected to enhance competitiveness of domestic industry through increased productivity, lower cost of production, improved product quality, increase in global market share through exports and additional employment generation. The scheme has an allocation of Rs crore in the Tenth Plan. The Scheme has been notified in December, Under the Scheme, two proposals namely; Textile Cluster, Tirupur (Tamilnadu) and Chemical Cluster, Vapi (Gujarat) have already been approved 41

4 by the Apex Committee and the whole amount of Rs crores kept in the budget for the year has been released to these two clusters. TRANSPORT SUBSIDY SCHEME Transport Subsidy Scheme was introduced in July, 1971 for promoting industrialization in hilly, remote and inaccessible areas. The Scheme is applicable to all the industrial units (barring plantations, refineries and power generating units) irrespective of their size, both in private and the public sector located in the North-Eastern region States, Himachal Pradesh, Jammu and Kashmir, Sikkim, Darjeeling District of West Bengal, Union Territories of Andaman & Nicobar Islands and Lakshadweep, and the hill Districts of Uttaranchal. Under the Scheme, subsidy ranging between 50% to 90% is admissible on the transport cost incurred on the movement of raw material and finished goods from the designated rail-heads/ports upto the location of the industrial unit(s) and vice-versa for a period of five years from the date of commencement of commercial production. The Scheme has been extended from time to time and is presently extended upto Since the inception of the Scheme till , an amount of Rs crore has been released to the various States/UTs. Under the new industrial policy announced by the Government for the development of North-Eastern region, North Eastern Development Finance Corporation Ltd.(NEDFi) has been designated as the nodal agency for disbursement of subsidy to the eligible units on the basis of recommendation of the State Level Committee/State Government. An amount of Rs crore upto has been released to NEDFi for this purpose. For the State of Jammu & Kashmir, as per the recommendations of the Task Force formed for creation of one lakh employment/self-employment opportunities, J&K State Industrial Development Corporation (SIDCO) has been designated as the nodal agency for disbursal of funds under the Transport Subsidy Scheme. A revolving fund of Rs crore has been placed with the J&K, SIDCO for this purpose. ERSTWHILE CENTRAL INVESTMENT SUBSIDY SCHEME In August, 1971, Government had introduced the Scheme of Central Investment Subsidy to promote industrialisation in selected districts/backward areas, which were categorised as Category A, Category B and Category C districts/areas. The Scheme was implemented through the State Governments and worked on disbursement/reimbursement basis. After cessation of the Scheme on , certain units which had not been disbursed subsidy, had gone in appeal before various High Courts and Supreme Court. The Hon ble Supreme Court gave a landmark judgement on that all applications filed before may be considered for the grant of subsidy provided the applications were complete under the Scheme. Hence, all such eligible cases are being considered for reimbursement, following the decision of the Supreme Court. From the inception of the Scheme upto , an amount of Rs crore has been released to various States/Union Territories. 42

5 NORTH-EAST INDUSTRIAL POLICY, 1997 Following the Prime Minister s initiatives, the Government announced a new North-East Industrial Policy (NEIP 97) on for promoting industrialization in the North-Eastern region. This policy is applicable for the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. Under this Policy, various concessions have been allowed to industrial units in the North Eastern Region, e.g., development of industrial infrastructure, subsidies under various schemes, excise and income-tax exemption for a period of 10 years, etc. North Eastern Development Finance Corporation Ltd. (NEDFi) has been designated as the nodal disbursing agency under the Scheme. SIKKIM INDUSTRIAL POLICY, 2002 Government of Sikkim also requested for a special package for development of industries in the State on the lines of the NEIP 97. Keeping in view the fact that Sikkim lags behind in industrial development, a need has been felt for structured interventionist strategies to accelerate industrial development of the state and boost investors confidence. Accordingly, on the Government announced a new industrial policy and other concessions for the State of Sikkim on the lines of NEIP 97. Department of Industrial Policy and Promotion is implementing the following Subsidy Schemes under these two packages. CENTRAL CAPITAL INVESTMENT SUBSIDY SCHEME The Central Capital Investment Subsidy Scheme, 1997 (for NE) was notified on and is effective from to The Central Capital Investment Subsidy Scheme, 2002 (for Sikkim) was notified on and is effective from to Under both the Schemes, of 15% of the investment in plant and machinery, subject to a ceiling of Rs lakh is payable to new industrial units or existing units on their substantial expansion, located in the Growth Centres and in the other identified areas of the North-Eastern Region. NEDFi has been designated as the nodal agency to release subsidy to the eligible units on the basis of recommendation of the State Level Committee/State Government. From the inception of the scheme upto , an amount of Rs crore has been released to NEDFi (this includes Rs.1.20 crore on account of the Scheme for Sikkim). CENTRAL INTEREST SUBSIDY SCHEME The Central Interest Subsidy Scheme, 1997 (for N.E.) was notified on and is effective from to

6 The Central Interest Subsidy Scheme, 2002 (for Sikkim) was notified on and is effective from to Under both the Schemes, interest 3% on the working capital loan is payable to new industrial units or existing units on their substantial expansion, located in the Growth Centres and in the other identified areas of the North-Eastern Region. NEDFi has been designated as the nodal agency to release subsidy to the eligible units on the basis of recommendations of the State Level Committee/State Government. From the inception of the scheme upto , an amount of Rs crore has been released to NEDFi on account of the Scheme for North East. CENTRAL COMPREHENSIVE INSURANCE SCHEME Central Comprehensive Insurance Scheme, 1997 (for NE) was notified on and is effective from to National Insurance Company Ltd. (NIC) is the designated agency for disbursements under this scheme. New industrial units set up in the North Eastern Region which are included in Fire Policy C (as per All India Fire Tariff) are eligible for subsidy under the scheme which envisages reimbursement of the insurance premium paid by the eligible units through a revolving fund maintained by the NIC. DIPP contributes the fund for the revolving fund. From the inception of the scheme upto , an amount of Rs crore has been released to the NIC on this account. Central Comprehensive Insurance Scheme, 2002 (for Sikkim) was notified on and is effective from to NEDFi is the designated agency for disbursements under this scheme. New industrial units and existing units on their substantial expansion which are included in Fire Policy C (as per All India Fire Tariff) are eligible for subsidy under the scheme which envisages reimbursement of the insurance premium paid by the eligible units through a revolving fund maintained by the NEDFi. DIPP is to contribute the funds for the revolving fund. Progress under the Packages A Seminar was held on at Guwahati to review the North-East Industrial Policy. Similarly, a Seminar was held at Gangtok on to review the Sikkim Industrial Policy. Both the Seminars were presided over by Minister of State for Commerce & Industry. To assess the impact of the NEIP on the industrialization of North-Eastern region, a study is being conducted through NEDFi and has been awarded to Tata Economic Consultancy Services. Based on the study report, midcourse correction, if required, would be considered. NEW INDUSTRIAL POLICY AND OTHER CONCESSIONS FOR SPE- CIAL CATEGORY STATES In , the Government announced two packages of economic incentives for promoting industrialization in the states of Jammu & Kashmir, Uttaranchal and Himachal Pradesh. The package for Jammu & Kashmir was issued on and for Uttaranchal and Himachal Pradesh on 44

7 These packages aim at using local resources for local employment in an environment friendly manner, for the industrial development of the States. Package for State of Jammu & Kashmir A New Comprehensive Industrial policy for the development of industries in the State of J&K was notified on 14 th June, 2002, allowing industrial units in the State fiscal incentives/concessions and the following development schemes. Incentives/concessions The Central Capital Investment Subsidy Scheme, 2002 and the Central Interest Subsidy Scheme, 2002, notified on October 22, 2002 by Department of Industrial Policy & Promotion for State of Jammu & Kashmir, are effective from to While the former Scheme extends 15% of the investment in plant & machinery subject to a maximum of Rs.30 lakh, the latter scheme lays out 3% on the working capital loan. Both the subsidies are payable for a period of ten years to new industrial units or the existing units on their substantial expansion in Growth Centres or in the specified industries located outside these growth centres and other identified locations, or Industrial Infrastructure Development Centres (IIDCs) or industrial estates/parks/export promotion zones and commercial estates set up by the State of Jammu & Kashmir. Under the package, the Central Comprehensive Insurance Scheme, 2002 was also notified on 22 nd October, 2002 which is effective from to Under the Scheme, the new industrial units and existing units on their substantial expansion on or after June 14, 2002 and included in Fire Policy C (as per All India Fire Policy) are eligible for reimbursement of 100% insurance premium for a period of ten years with effect from The package also contains schemes for infrastructure development through enhanced grant under Growth Centre Scheme and Integrated Infrastructure Development Scheme of Ministry of Small Scale Industries. The other fiscal incentives include excise exemption and Income Tax holiday. Implementing Agency Till the constitution of Jammu & Kashmir Development Finance Corporation (JKDFC), the Jammu & Kashmir State Industrial Development Corporation (JKSIDCO) has been notified as the interim nodal agency for disbursement of subsidies under both the Schemes, based on the recommendation of the State Level Committee/ State Government, to the eligible units. After the Nodal Agency was designated, an amount of Rs crore and Rs crores respectively have been released during under the aforesaid two Schemes to the Jammu & Kashmir State Industrial Development Corporation (JKSIDCO) for disbursement to the applicant units, under Central Capital Investment Subsidy Scheme & Central Interest Subsidy Scheme. An amount of Rs crore has also been released to JKSIDCO in the 45

8 financial year to be utilized as a contribution of Govt. of India to the equity of JKDFC. Progress under the Package A Seminar was held on September 8-9, 2003 at Srinagar under the Chairmanship of Minister of State for Commerce & Industry to review Jammu & Kashmir Industrial Policy. Deputy Chief Minister, Government of Jammu & Kashmir; Officers from Government of India and State Government, entrepreneurs and investors attended the Seminar. During the discussions it was stated that the package has evoked positive response and proposals worth Rs.400 crore have been received till end of August The State Government is also formulating a state level policy for helping the industrialists of Jammu & Kashmir to look beyond the state for market. Further, this package is the cornerstone for providing fillip to employment generation activities through new industrial units with approximately 3800 jobs in next two years. Package for Uttaranchal and Himachal Pradesh In pursuance of the Prime Minister s initiatives for accelerating industrial development in the States of Uttaranchal and Himachal Pradesh, the Government announced a New Comprehensive Industrial Policy for the development of industries in these States on January 7, 2003, allowing industrial units certain specified fiscal incentives/concessions. These include:- The Central Capital Investment Subsidy Scheme, 2003, notified on January 8, 2003 for the States of Uttaranchal and Himachal Pradesh, by the Department, effective from to Under the Scheme, 15% of the investment in plant & machinery subject to a maximum of Rs.30 lakh, is payable for a period of ten years to new industrial units or the existing units on their substantial expansion in Growth Centres or in specified industries located outside these growth centres and other identified locations, or Industrial Infrastructure Development Centres (IIDCs) or industrial estates/parks/export promotion zones and commercial estates set up by the aforesaid States. The package also contains schemes for infrastructure development through enhanced grant under Growth Centre Scheme and Integrated Infrastructure Development Scheme of Ministry of Small Scale Industries. The other fiscal incentives include excise exemption, Income Tax holiday, Deen Dayal Hathkargha Protsahan Yojana, Relaxation under Pradhan Mantri Rozgar Yojana, etc. Implementing Agencies The State Industrial Development Corporation of Uttaranchal Limited (SIDCUL) and the Himachal Pradesh State Industrial Development Corporation (HPSIDC) have been notified as nodal agencies for the states of Uttaranchal and Himachal Pradesh respectively to release 46

9 subsidy, based on the recommendation of the State Level Committees/State Governments, to the eligible units. Progress of the scheme During the financial year , Rs.2.50 crore have been released to State Industrial Development Corporation of Uttaranchal Limited (SIDCUL) and Himachal Pradesh State Industrial Development Corporation (HPSIDC) each for disbursement to the applicant units, under the Central Capital Investment Subsidy Scheme. 47