Centre doubles capital subsidy for small and medium units in J&K

The centre today announced a doubling of capital subsidy for micro, small and medium enterprises (MSMEs) in Jammu and Kashmir from the current 15 per cent to 30 per cent of the total capital requirements.

The union cabinet today approved modifications to the central capital investment subsidy schemes under the industrial packages to J&K, placing MSMEs in the state on a par with similar units in the North Eastern Region (NER).

In addition, the MSME units in both J&K and NER will now be eligible to claim subsidy for expansion so long as the total investment on plant and machinery does not exceed the prescribed ceilings for MSME units, ie, Rs10 crore in case of the units in the manufacturing sector and Rs5 crore for the units in the services sector.

The modifications are based on the recommendations of a task force headed by the principal secretary to PM. The task force was asked to look into various issues raised by the associations representing the micro, small and medium enterprises (MSMEs).

Besides the central capital investment subsidy schemes, SMSEs in J&K and the NER are entitled to other incentives such as 100 per cent excise duty exemption, income tax exemption, interest subsidy of 3 per cent on working capital loan and reimbursement of comprehensive insurance premium on capital.

These incentives are available to all new units for ten years from the date of commencement of commercial production and also to the existing units on undertaking substantial expansion as defined.