The Cabinet Committee on Economic Affairs Wednesday gave its approval for extension of the special package of industrial incentive for Himachal Pradesh and Uttarakhand till March 2017.
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 from Jan 7, 2013 to March 31, 2017, an official release said.
It said 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 pre-register under the scheme, commence commercial production and operation before March 2017 and file claims within one year of the commencement of commercial production would be eligible for subsidy under the scheme, it said.
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.
However, 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 and the state governments for the same purpose.
Commerce and Industry Minister Anand Sharma said the extension of the special package would give a fillip to manufacturing and the small and medium enterprises in both the states.
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The new industrial policy and other concessions for Himachal Pradesh and Uttarakhand were announced Jan 7, 2003 for a period of 10 years, keeping in view the fact these states lag in industrial development.
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 28 percent while growth in employment generation is more than 33 percent, said the PIB statement.
In Uttarakhand, investment generated is close to Rs.30,000 crore, 42 times the 2000 level. The number of units set up has grown more than 130 percent while growth in employment generation is more than 490 percent for the same period.