Union government extends industrial package to HP and Uttarakhand

January 15, 2014

The Cabinet Committee on Economic Affairs (CCEA) today gave its approval for extension of the special package of industrial incentive for the states of Himachal Pradesh and Uttarakhand from 7th January, 2013 to 31st March, 2017.

Union Commerce and Industry Minister Mr. Anand Sharma while welcoming the decision of Himachal Pradesh and Uttarakhand to generate gainful employment especially for the rural youth. It will also give a fillip to manufacturing to the small and medium enterprises in these two states.

The objective of the scheme is to create an enabling growth and industrialization of these states and generation of more employment.

All new industrial units and existing units on substantial expansion would be eligible for central capital units at the rate of 15 percent of their investment in plant and machinery.

Subsidy would be available to all new and existing units on substantial expansion located in notified areas as well as to “thrust industries” for units located anywhere in these states. Only those units that are pre-registered under the scheme, can commence commercial production/operation before 31st March 2017 and can file claims within one year of the commencement of commercial production which shall be eligible for subsidy under the scheme.

Incentive on substantial expansion will be given to units affecting an increase by not less than 25 percent in the value of fixed capital investment in plant and machinery for the purpose of expansion of capacity. Expenditure on purchase / procurement / installation of second hand plant and machinery will not be eligible for subsidy under the Central Capital Investment Subsidy Scheme. A single unit cannot avail subsidy both from the central as well as state government for the same purpose.

The new industrial policy and other concessions for the states of Himachal Pradesh and Uttarakhand were announced on 7th January, 2003 for a period of ten years, keeping in view the facts that these states lag in industrial development. The objective of the policy is to provide the required incentives as well as enabling environment for industrial development, improve availability of capital and increase market access to provide fillip to private investment.

The policy package announced on 7th January, 2003 for these two states was for a period of ten years. The state of Himachal Pradesh has been able to attract 300 percent more investment as compared to the pre-incentive package level. On an average, total investment generated in Himachal Pradesh is above Rs.12,500 crore and number of units set up has grown by 28 percent while growth in employment generation is more than 33 percent.

In Uttarakhand, investment generated is close to Rs. 30,000 crore, which is 42 times the level in the year 2000. The number of units set up has grown by more than 130 percent while growth in employment generation is more than 490 percent for the same period.

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