INCENTIVES FOR INVESTMENT IN NORTH EASTERN REGION

In view of the continuing backwardness of the North Eastern Region and the need for stimulating the development of industries in this Region, Government of India's Department of Industrial Policy and Promotion have extended a number of incentives/ concessions which are summarized as follows :-

DEVELOPMENT OF INDUSTRIAL INFRASTRUCTURE

i. Currently, the funding pattern of the Growth Centres envisages a Central assistance of Rs. 10.0 crores by way of equity for each Centre and balance amount to be raised by the State Governments and their agencies which implement the projects. Government has approved that entire expenditure on the Growth Centres in North Eastern Region would be provided as Central assistance, subject to a ceiling of Rs.15.0 crores for each Growth Centre. In the North Eastern Region, ten Growth Centres have been sanctioned and their locations are Niklog Ngorlung in Arunachal, Chariduar/ Matia/ Chaygaon in Assam, Lamlai-Napet in Manipur, Mendipathar in Meghalaya, Luangmual in Mizoram, Ganeshnagar in Nagaland, Denchong Block in Sikkim and Bodhjung Nagar in Tripura.

ii. In respect of the Integrated Infrastructure Development (IID) Centres, the funding pattern (Government of India : Small Industries Development Bank of India ratio) has been relaxed from 2:3 to 4:1 and the Government of India funds would be a grant. In the North Eastern Region, three Integrated Infrastructure Development Centres have been sanctioned and their locations are at Darrang/ Nowgono in Assam and Chandel in Manipur.

TRANSPORT SUBSIDY SCHEME

The Transport Subsidy Scheme has been extended further in so far as North Eastern States are concerned, for a period of another 7 years i.e upto 31st March , 2007, being coterminous with the Tenth Five Year Plan on the same terms and conditions as are applicable now. Under this scheme, subsidy ranging from 50% to 90% is admissible on transportation cost incurred by an entrepreneur on the movement of raw materials and finished goods from the designated rail-head/ ports upto the location of industrial units and vice-versa for a period of five years from the date of commencement of industrial production. North Eastern Development Finance Corporation Ltd. has been designated as the Nodal Agency for disbursement of subsidy to the eligible units on the basis of recommendations of the State Level Committee/ State Government.

FISCAL INCENTIVES TO NEW INDUSTRIAL UNITS AND THEIR SUBSTANTIAL EXPANSION

i. Government has approved converting the Growth Centres and Integrated Infrastructure Development Centres into a total Tax Free Zone for the next 10 years. All industrial activity in these zones would be free from Income Tax, Excise for a period of 10 years from the commencement of production. State Government would be requested to grant exemptions in respect of Sales Tax and Municipal Tax.

ii. Industries located in the Growth Centres as also new industrial units and/ or their substantial expansion in other identified areas in the North Eastern Region are eligible for Capital Investment Subsidy at the rate of 15% of their investment in plant and machinery, subject to a maximum ceiling of Rs. 30.0 lakhs. The scheme is effective from 24.12.1997 to 31.3.2007 and North Eastern Development Finance Corporation Ltd. has been designated as the Nodal Agency for disbursement of subsidy to the eligible units on the basis of recommendations of the State Level Committee/ State Government.

iii In line with Govt policy, the North East Development Financial Corporation have set up their offices in all State capitals of the North Eastern Region (in case of Nagaland, their office is at Dimapur) so as to increase their reach. Also, in case of first generation entrepreneurs, North Eastern Development Finance Corporation Ltd. is providing 85% funds (60% as Loan and 25% as Equity) against 15% contribution from the entrepreneur. In case of commercial borrowings, the ratio of North Eastern Development Finance Corporation Ltd. Loan and entrepreneur's contribution is 60:40.

iv An interest subsidy of 3% on the working capital loan is provided for a period of 10 years to the new units in North Eastern Region, after commercial production. The scheme is effective from 24.12.97 to 31.3.2007. The working capital requirements are worked out as per the Nayak Committee. North Eastern Development Finance Corporation Ltd. has been designated as the Nodal Agency for disbursement of subsidy to the eligible units on the basis of recommendations of the State Level Committee/ State Government.

v. Similar benefits are available to the new industrial units or their substantial expansion in other Growth Centres or IIDs or industrial Estates/ Parks / Export Processing Zones set up by the States in the North Eastern Region. New industrial units or their substantial expansion in the specified industries located outside these Growths Centres and other identified locations are also eligible for similar fiscal incentives.

CENTRAL COMPREHENSIVE INSURANCE SCHEME

A Central Comprehensive Insurance Scheme of industrial units in the North Eastern Region was notified on 14th July, 1999 and the scheme is effective upto 13.07.2009. All industrial units set up in the North Eastern Region after 24.12.1997 and included in Fire Policy 'C' (as per All India Fire Tariff) are eligible for subsidy under the scheme. The scheme envisages reimbursement of the insurance premium paid by the eligible units through a Revolving Fund maintained by the nodal insurance company which is the National Insurance Company. The Department of Industrial Policy and Promotion contributes the fund for the Revolving Fund.

RELAXATION OF PRIME MINISTER'S ROZGAR YOJANA ( PMRY) NORMS FOR THE NORTH EASTERN REGION

The Prime Minister's Rozgar Yojana has been expanded in scope to cover areas of horticulture, piggery , poultry , fishing , small tea gardens etc. so as to cover all economically viable activities in the North Eastern Region. Prime Minister's Rozgar Yojana has a family income ceiling of Rs. 40,000.00 per annum for each beneficiary along with his / her spouse and upper age limit has been relaxed to 40 years. Projects costing up to Rs.2 lakhs in other than business sector are eligible for assistance. No collateral is insisted for projects costing upto Rs.1.0 lakh. Group financing upto Rs. 5.0 lakhs is eligible. Scheme has a subsidy component @15% with an upper ceiling of Rs.15,000.00 . The margin money may vary from 5% to 12.5% of the project cost to make the subsidy and margin contribution at 20% of the project cost. Prime Minister's Rozgar Yojana continues to have Entrepreneurship Training component as per the existing rate.

DEVELOPMENT OF VILLAGE & SMALL INDUSTRIES (VSI ) SECTOR

Weavers Service Centres (WSCs) in North Eastern region and Indian Institute of Handloom Technology at Guwahati are being considered for strengthening so as to provide technology and training support to the weavers. National Handloom Development Corporation gives priority in supply of hank yarn to the North Eastern Region. All the four varieties of silk are covered under the Mill Gate Price Scheme. Priority is given to the North Eastern region in the scheme of setting up of Market Complexes and permanent Exhibition facilities. A new Design Centre for development of handicraft is being considered for the North Eastern Region. To upgrade the skills of artisans, advanced training programmes are being planned.

• Package for Sikkim
• Air-connectivity in North-East
• Small Industries Development Organisation (SIDO) : Policies for North Eastern States
• Export Promotion of Horticulture Products from North Eastern Region
  Ministry of Commerce & Industry O. M. dated ( 16.07.2002, 10.01.2003, 27.01.2003 )
• Department of Industrial Policy and Promotion
• Ministry of Small Scale Industries & Agro and Rural Industries