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Saturday, 08 June, 2013



New Industrial Package for the North-East

The Government of India has introduced a comprehensive new industrial policy for the North Eastern Region. It includes infrastructure support and both project and production related benefits that are meant for all industrial activities including those of small scale and agro & rural industries. The salient features of the policy are as follows:-

I. Development of Industrial Infrastructure.

(a) Government of India will provide entire expenditure on the establishment of Industrial Growth Centre. (Upto a ceiling of Rs. 15 crore as against Rs. 10 crore admissible earlier).

(b) Government of India would provide 80% of funds for Integrated Industrial Development Centres (IIDC’s) as grant (as against 40% earlier) and balance 20% would be by SIDBI.

II. Transport Subsidy

The transport subsidy will be extended for a further period of seven years i.e. upto 31st March, 2007.

III. Fiscal Incentives

(a) The Industrial Growth Centres and IIDCs would be 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.

(b) Industries located in the growth centre would also be given capital investment subsidy at the rate 15% of their investment in plant and machinery, subject to a maximum ceiling of 30 lakhs.

(c) The commercial banks and the North East Development Financial Corporation (NEDFI) will have dedicated branches/counters to process application for term loans and working capital in these centres.

(d) An interest subsidy of 3% on the working capital loans would be provided for a period of ten years after the commencement of production.

(e) Similar benefits would also be extended to the new industrial units or their substantial expansion in other growth centres or IIDCs or industrial estates/parks/export promotion zones set up by the States in the NE region.

IV. Relaxation of PMRY norms

The PMRY would be expanded in scope to cover areas of horticulture, piggery, poultry, fishing, small tea gardens etc. so as to cover all economically viable activities. PMRY would have a family income ceiling of Rs. 40,000 per annum for its beneficiary along with his/her spouse and upper age limit will be relaxed o 40 years. Projects costing upto Rs. 2 lakhs in other than business sectors will be eligible for assistance. No collateral will be insisted for projects costing upto Rs. 1 lakh. Group financing upto Rs. 5 lakhs will be eligible. Schemes will have subsidy component @ 15% with an upper ceiling of Rs. 15,000. The margin money may vary from 5% to 12.5% of the project costs to make the subsidy and margin contribution at 20% of the project cost.

V. Other Incentives

(a) A comprehensive insurance scheme for industrial units in the North East will be designed in consultation with General Insurance Corporation of India Ltd. and 100% premium for a period o0f 10 years would be subsidised by Central Government.

(b) A one time grant of Rs. 20 crore will be provided to the NEDFI by the Central Government through NEC to fund techno-economic studies for industries and infrastructure best suited to this region.

(c) State Government may consider setting up of a “Debt Purchase Window” by the NEDFI which buys the debt of the manufacturing units particularly in respect of the supplies made to the Government Department so as to reduce the problem of blocking funds for these units.

(d) It may be considered to provide assistance for restructuring State PSUs from National Renewal Fund.

VI. Procedure for released of assistance under the New Incentives. 

Currently central assistance for Transport subsidy is given on reimbursement basis. The expenditure is first incurred by States and then reimbursement claimed from Centre. Release under the growth centre scheme are made taking into consideration the physical and financial progress and release made by the State Governments. Inadequacy of funds with States delays the releases which affects the progress of implementation or puts the entrepreneurs to hardship. I have been decided that the transport subsidy budget would be released by a designated agency on the basis of the recommendation of the S.L.C. NEDFI would be designated as the nodal agency for release of transport subsidy.

VII. Development of Village & Small Industries 

Weavers’ Service Centre (WSCs) in NE region and Indian Institute of Handloom Technology at Guwahati would be suitably strengthened to provide technology and training support to the weavers. National Handloom Development Corporation will give priority in supply of hank yarn to the NE region. All the four varieties of silk would be covered under the Mill Gate Price scheme. Priority would be given to the NE region in scheme of setting up of market complexes and permanent exhibition facilities. A new design centre for development of handicraft would be set up in the NE region. To upgrade the skill of artisans, advance training programme through master craftsmen would be organised. New emporia will be set up and financial assistance for renovation of existing emporia would be provided. The Central Silk Board will give priority to NE region in implementation of its schemes.

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