'Landmark' industrial policy for northeast announced
Mar 29, 2007 - 5:49:54 PM
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'This will ensure eco-friendly development in the North East. The inclusion of tobacco processing, plastic bag manufacture and refinery products in the negative list goes with this positive approach towards environment,' Kamal Nath said.
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By IANS,
[RxPG] New Delhi, March 29 - The government Thursday said it will give 100 percent tax exemption to industrial units set up the northeast, besides offering other fiscal sops, as it announced a new 'landmark' industrial policy to speed up development and offer employment opportunities the region.
The North East Industrial and Investment Promotion Policy was approved by the Cabinet Committee on Economic Affairs chaired by Prime Minister Manmohan Singh as part of the agenda set in National Common Minimum Programme of the United Progressive Alliance - government.
Apart from the income tax exemption, the new policy also provides for continuing the 100 percent excise duty exemptions on finished products that are made in the north-eastern states that also includes Sikkim.
It also provides for reimbursement of 100 percent insurance premium under the comprehensive insurance scheme for new as well as existing industrial units seeking to expand substantially.
Once notified, the existing industrial policy and other concessions extended to Sikkim that were announced in December 2002 would be discontinued, Information and Broadcasting Minister Priyaranjan Dasmunsi told reporters here after the cabinet meeting.
'This landmark policy, which will be in place for a period of 10 years, will accelerate the pace of industrialisation and development of the North East,' Commerce Minister Kamal Nath said.
'The centre will also take proactive measures to speed up industrialisation of the eastern and north-eastern region,' the minister said, adding that a graded system of incentives will be introduced for the expansion to attract investment.
The new policy says all units that go in for sizeable expansion and commence production within the 10-year period will be eligible for incentives for a period of 10 years from the date of commencement of production.
In addition, the incentives will be given to units that expand capacities by not less than 25 percent of the value of fixed capital in plant and machinery, as against 33.5 percent at present.
It also provides for enhancing the capital investment subsidy from 15 percent on plant machinery to 30 percent and increasing the limit for automatic approval of subsidy up to Rs. 15 million as against Rs. three million at present.
Such subsidy will be applicable to units in the private sector, joint sector and cooperative sector, as well to those set up by the state governments.
Capital investment subsidy higher than Rs. 15 million but up to a maximum of Rs. 300 million, will be approved by an empowered committee and interest will be at 3 percent on working capital loan.
The new policy also seeks to provide incentives to services, biotechnology and power generating industries. The North Eastern Development Finance Corp will continue to be the nodal agency for disbursal of subsidies.
'This will ensure eco-friendly development in the North East. The inclusion of tobacco processing, plastic bag manufacture and refinery products in the negative list goes with this positive approach towards environment,' Kamal Nath said.
The provisions of the new policy would provide the requisite incentives as well as an enabling environment to speed up the industrialization in the region that is otherwise growing at less than 4 percent per annum as against the national average of 8 percent, Dasmunsi added.
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