North-East industrial development policy to incentivise MSMEs

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North-East industrial development policy to incentivise MSMEs

North-East industrial development policy to incentivise MSMEs

Industry News
Mar 27,18

In order to promote employment in the North East States and incentivise the MSME (micro, small & medium enterprises) sector, the Union Cabinet has approved the North East Industrial Development Scheme (NEIDS), 2017 with financial outlay of Rs 30 billion up to March, 2020.

North-East industrial development policy to incentivise MSMEs

The government will provide necessary allocations for the remaining period of the scheme after assessment before March 2020. NEIDS is a combination of the incentives covered under the earlier two schemes with a much larger outlay. Government is also providing specific incentive through the scheme to generate employment.

All eligible industrial units, which are getting benefits of one or more components of other schemes of the Government of India, will also be considered for benefits of other components of this scheme.

Under the Scheme, the following incentives will be provided to new industrial units set up in the North Eastern States including Sikkim:

Central Capital Investment Incentive for Access to Credit (CCIIAC): 30% of the investment in plant & machinery with an upper limit of Rs 50 million on the incentive amount per unit.
Central Interest Incentive (Cll): 3% on working capital credit advanced by eligible banks/financial institutions for first 5 years from the date of commencement of commercial production by the unit.
Central Comprehensive Insurance Incentive (CCII): Reimbursement of 100% insurance premium on insurance of building and plant & machinery for 5 years from the date of commencement of commercial production by the unit.
Goods and Service Tax (GST) Reimbursement: Reimbursement up to the extent of Central Government share of CGST and IGST for 5 years from the date of commencement of commercial production by the unit.
Income-Tax (IT) Reimbursement: Reimbursement of Centre's share of income tax for first 5 years including the year of commencement of commercial production by the unit.
Employment Incentive (EI): The Government shall pay 3.67% of the employer’s contribution to the Employees Provident Fund (EPF) in addition to Government bearing 8.33% Employee Pension Scheme (EPS) contribution of the employer in the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY).

In addition, NEIDS will provide following transport incentive (TI):

20% of the cost of transportation including the subsidy currently provided by Railways/Railway PSU for movement of finished goods by rail.
20% of the cost of transportation for finished goods, for movement through Inland Waterways Authority of India.
33% of the cost of transportation of air freight on perishable goods (as defined by IATA) from the airport nearest to place of production to any airport within the country.

The overall cap for benefits under all components of incentives will be of Rs 2 billion per unit.

“The newly introduced scheme will promote industrialisation in the States of the North Eastern Region and will boost employment and income generation,” said the Government press statement.