The government of India has formulated a new industrial development scheme with the aim of developing industries and employment generation in northeastern states.
Objectives:
-
- Generating gainful employment
- Creating productive economic activity in the manufacturing and service sectors.
- Ensuring overall socio-economic development of the northeast
Features:
-
- It is a central sector scheme.
- Time period: 10 years from the date of notification along with 8yrs for committed liabilities, with a financial outlay of more than Rs. 10000 crores.
- Implementing agency: Department of Promotion of Industries and Internal Trade (DPIIT) along with national and state level steering committees.
- The nodal agency for disbursal of incentives will be Northeast Development Financial Corporation Limited (NEDFi).
- Districts are categorized into two zones:
- Zone A (Industrially Advanced Districts)
- Zone B (Industrially Backward Districts)
- All new Industrial units and Expanding units would be eligible for the respective incentives.
- All eligible Industrial Units must commence their production or operation within 4 years from the grant of registration.
- The scheme is divided into 2 parts:
- Part A: it forms around 97% of the total outlay catering to the incentives to units eligible under the scheme.
- Part B: It constitutes around 3% of the total outlay dedicated for implementation and institutional arrangements for the scheme.
- Earmarking of funds:60% of the outlay of Part A has been earmarked to 8 NE states and 40% on First-In-First-Out (FIFO) basis.
- A negative list for manufacturing sector (non-eligible industries) and a positive list for services sector (eligible industries) will be maintained.
- Incentives under the scheme:
| Incentive |
Description |
Eligibility |
| Capital Investment Incentive (CII) |
A special financial benefit provided to eligible units- Both new and expanding. |
Minimum investment criterion:
|
| Capital Interest Subvention (CIS) incentive |
It aims to offer financial relief to eligible businesses- Both new and expanding units. |
|
| Manufacturing and Services linked incentive (MSLI) |
The incentive is linked to the net payment of GST i.e. excluding input tax credit. It is only for new units. |
The upper limit of incentive will be:
|
Significance:
The scheme can prove to be a significant step for industrial development of northeast region as-
-
- Fiscal stimulus: The program aims to provide substantial financial incentives in the form of subsidies, interest subventions, etc. This will help investors by mitigating capital costs thus enhancing the profitability in business.
- Employment generation: The program is expected to generate direct employment opportunity of about 83000. Besides this there will be opportunities for indirect employment for connecting forward and backward linkages.
- Socio-economic development: It will address the socio-economic challenges such as migrations, poverty, and infrastructure deficits in the region. It is essential for inclusive growth and reducing disparities within the country. Thus, it will foster regional stability as well as economic growth of northeast India.
