Jammu and Kashmir, a newly formed union territory under the Jammu and Kashmir reorganisation act, 2019, has made progress in industrial development over the last decades. In 2016, Jammu and Kashmir had announced an industrial policy, in order to attract substantial investment in industry for production of goods, services and employment generation through optimal utilisation of available resources including human resource. The policy focused more towards the traditional cottage industries namely handicraft and handloom to ensure economic upliftment of artisans, weavers and traders in this sector.
Keeping this in mind the government of India through the Department for Promotion of Industry and Internal Trade (DPIIT) has been offering incentives under different packages such as Special Package I in 2002, Special Package II in 2012 and IDS 2017. Recently the government launched The New Central Sector Scheme for Industrial Development of Jammu and Kashmir through a notification in 2021 in the month of February. DPIIT has been active in bringing interventions to make the business environment more investment friendly in consonance with national and international standards.
Aims and objectives of the Scheme:
This Scheme positions Jammu and Kashmir as an aspiring investment destination in India in the next 10 years, thereby leading to industrial development which is sustainable, balanced, progressive, and also competitive. One of the core values of this Scheme is its emphasis on zero defect and zero defect productivity. Following are the main aims and objectives of this Scheme:
- Promoting ancillarisation and cluster development approach to attain optimum utilisation of resources across the union territory
- Focusing on industrial investments in the union territory to spur the manufacturing momentum and to create new employment opportunities
- Ease of doing business and creation of a conducive business environment by ensuring service delivery in a time bound manner digitally.
- Facilitating access to quicker and affordable credit for industries and to promote sector specific approach and value addition in production.
General Operational Guidelines for Registration of Units under this Scheme:
Registration under the scheme has commenced from April 1, 2021 and will continue till September 30, 2024 while all applications for registration shall be disposed of by March 31, 2025, unless otherwise extended.
1. Process and Documents required for registration under the Scheme:
As per the guidelines, the applicant unit willing to avail incentives under the scheme, has to apply for registration through an online portal along with certain documents enclosed, which include :
- Detailed project Report
- Land documents (Revenue paper regarding ownership/rent deed duly registered by the registering authority/lease deed in case of Govt. land)
- Bank loan sanction letter.
- Appraisal Report from the bank/financial institution showing the appraised cost of building, plant and machinery, miscellaneous fixed assets etc.
- Appraisal Report from Jammu & Kashmir Development Finance Corporation Limited(JKDFC) in case of self-financed units.
- Certificate from CA for fixed assets of the unit regarding investment already made in the project in case of units which are under implementation or have to commence commercial production/operation.
- Consent/NOC from the State Pollution Control Board to establish and manufacture the finished product( s) or run unit.
- Certificate of mandatory/obligatory registration/approval from concerned department as applicable.
- Copy of Incorporation Certificate in respect of firm and unit.
- Certificate from CA stating detail of all the owner(s)/director(s)/partner(s)
- Copy of PAN.
- Copy of GSTIN certificate.
- Copy of last GST return filed as applicable.
- Udyam Registration/EM II
2. Conditions for grant of registration:
Merely submitting an application for registration will not entitle any applicant for registration under the scheme. The following shall be taken into consideration for granting registration to the unit under the scheme:
- Application submitted through online portal with all the details required therein along with all the documents with their correctness
- Detailed Project Report, Bank Appraisal Report.
- Eligibility of unit as per the provision contained in the notification of the scheme.
- Fixed Financial Assets, availability of land, required power connection, adequate required infrastructure to run the unit, source of finance, employment generation potential and sustainability to run the unit.
- Submission of required documents from the authorized authority to run the unit.
- Unit should not be blacklisted by any authority under the law or bankrupt or declared NPA.
- Any other information/documents required by the registering authority.
3. Approval of grant of registration of the units:
A Secretary Level Committee and a Chief Secretary Level Committee have been designated for approval of grant of registration of the units having assets up to INR 500 crores and more than INR 500 crores, respectively.
After checking the eligibility of the applicant unit as per the scheme notification, the General Manager, DIC (concerned) can recommend the application for registration to Directorate of Industries & Commerce (concerned) along with the online certificate that the unit does not fall in negative list in case of Manufacturing units and service activity falls in positive list in case of Service Sector Unit as defined in the scheme notification. The applications received on the portal at Directorate Level recommended by General Manager, DIC (concerned) would be placed before the designated committees for approval of grant of registration.
4. Eligibility under the Scheme:
- All units eligible under Manufacturing and eligible Service sector will be granted incentive(s) under this scheme
- The scheme will not be applicable to the units which manufacture the products listed in the negative list. Service sector units with a minimum investment of INR 1 crore in building and other durable physical assets will be eligible for incentives under this scheme.
- The scheme will be applicable only for services listed in the positive list which may be modified further by the Steering Committee.
- All eligible units have to commence commercial production/operation within 3 years from the date of grant of registration.
- Any investment made on or after 1st April, 2019 by a unit in plant and machinery (for manufacturing sector) or construction of building and other durable physical assets (for service sector) will be taken into consideration to decide the eligible value of investment as per the entitlement under Capital Investment Incentive, Capital Interest subvention and GST Linked Incentive of this scheme. However, the date of commencement of commercial production/ operation has to be on or after 1st April, 2021.
- The eligibility for availing any incentive is subject to grant of registration under the scheme.
- Eligibility under this scheme will be subject to verification on investment (Core and Non-Core) in Plant and Machinery (in manufacturing sector) and cost of construction of building and other durable physical assets (in service sector). However, the incentive will be eligible only for core segments in both manufacturing and service sectors.
Pertinent to mention that the Government of J&K had recently announced a new industrial developmental scheme with a total outlay of Rs 28,400 crore to encourage new investment and to take industrial development to the block level and far-flung areas of the Union Territory.
5. Industries not eligible for benefits under this Scheme (Negative List):
The following industries will not be eligible for benefits under New Central Sector Scheme for Industrial Development of Jammu & Kashmir :
- All goods falling under Chapter 24 of the Central GST Tariff Act, 2017 (The Act) which pertains to tobacco and manufactured tobacco substitutes.
- Pan Masala as covered under Chapter 24 of the Act.
- Plastic carry bags of less than 20 micron as specified by Ministry of Environment and Forests (MoEF&CC)
- Goods falling under Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985 produced by Petroleum or Gas refineries.
- Plantation, Refineries and Power generating Units above 10 MW.
- Coke (including Calcined Petroleum Coke), Fly Ash.
- Units not complying with environmental standards or not having applicable Environmental Clearance from MoEF&CC or State Environmental Impact Assessments Authority (SEIAA) or not having requisite consent to establish and operate from the concerned Central Pollution Control Board/State Pollution Control Board also will not be eligible for incentive under the scheme.
- Low value addition activities in goods such as preservation during storage, cleaning, operations, packing, repacking or re-labelling, sorting, alteration of retail sale price etc. take place excluding high value packaging and processing.
- Gold and gold dore, Molasses, Marble, Travertine & Granite, Revolvers and pistols.
6. Service Sectors eligible for benefits under the Scheme:
- Tourism & Hospitality Services (including health & wellness tourism)
- Services promoting Film Tourism (including film cities, studios)
- Ropeways, Entertainment Parks and Rides
- Heritage Property Restoration Services
- Healthcare Services
- IT & ITeS Services
- Maintenance and Repair Services
- Freight Terminals, Logistics Parks & Warehousing (including Cold Store Services)
- Testing, R&D, Analysis & Certification services
- Educational & Skill Development Services
7. Restoration of heritage property:
The heritage property under the scheme include monuments notified under ASI, monuments notified by the State Government under Ancient Monuments Preservation (Amendment) Act, 2010, heritage sites notified under J&K Heritage Conservation and Preservation Act, 2010 and heritage monuments listed by recognized agencies such UNESCO, INTACH, etc. Further, the restoration of such heritage property should have been done on the basis of a conservation plan prepared/vetted by INTACH, J&K or a qualified conservation body duly notified by the UT.
Conclusion:
The New Industrial Policy of 2021 aims to address the challenges faced by the industry and to create a sustainable, balanced, progressive, and competitive ecosystem in the union territory.
The industrial landscape of Jammu and Kashmir is dominated by Micro, Small & Medium Enterprises (MSME) and it plays a crucial role in propelling industrial growth and economy in the union territory by contributing around 8% to the GSDP and employing the largest number of people in the manufacturing and Service sectors. At present there are approximately 25,000 MSMEs which are operational in the union territory and contribute to almost 60% of the total investment and 90% of the total employment in the industrial sector in the union territory. It is thus imperative that the MSME sector be further supported through policy interventions.
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