GUWAHATI, April 17 - The Government of India has decided to take punitive action against any industrial unit, which tries to take benefits under the North East Industrial Development Scheme with misrepresentation of facts or goes out of commercial production within five years.
The notification on the scheme, issued by the Department of Industrial Policy and Promotion of the Ministry of Commerce and Industry gave a detailed outline of the actions that would be taken against the industrial units for misrepresenting facts and said that if the Central or state government or financial institutions are satisfied that any industrial unit obtained incentives under the scheme by misrepresenting essential facts or by furnishing false information or goes out of commercial production within five years, the unit can be asked to refund the grant or incentives. However, the notification said that the units would be given opportunity to make their position clear.
As the incentive will be released through the North East Industrial Finance Corporation Limited (NEDFi) through direct benefit transfer scheme, the NEDFi will collect all information required by the DBT Mission and an indemnity bond would be signed between the concerned unit and NEDFi prior to disbursement of the benefits.
Concealment of inputs or routing third party or production outside the North East region for claims or malpractices of similar kind will make the industrial units liable for forfeiture of further claims and recovery of all previous subsidies with interest at the rate of 15 per cent per annum. No owner of an industrial unit receiving benefits under the scheme will be allowed to change ownership without taking prior approval of the Department of Industrial Policy and Promotion and the concerned state government and financial institution. After receiving the incentives, the industrial units will have to submit annual progress report to the DIPP and the concerned state governments for a period of five years.
Giving details of the benefits to be received by the industrial units under the scheme, the notification said that all eligible new industrial units in the manufacturing and service sector located anywhere in the North Eastern Region would be provided Central Capital Investment Incentive for access to credit (CCIIAC) at the rate of 30 per cent of the investment in plant and machinery with an upper limit of Rs 5 crore. The project cost will have to be appraised by a Scheduled Commercial Bank or Financial Institution before the proposal of assistance is approved by the Empowered Committee of DIPP. The specific absolute amount of total assistance will be indicated in the government sanction. Ten per cent of government assistance will be allowed to be used for project financing in the beginning and the balance 90 per cent will be kept in an escrow account. The government assistance will be reduced pro rata in case the project is completed at a lesser cost. Full assistance will be released on the basis of certificate issued by Competent Authority of the bank that the cap on the project report and sanction thereof is in place and Plant and Machinery has been put to use.
However, the government does not commit itself to increase in the scale of assistance in case of cost escalation. In case the project is foreclosed or abandoned midway the entire assistance released by government will have to be refunded to DIPP.
All eligible new industrial units located anywhere in the North Eastern region will be given an interest incentive at the rate of three per cent on working capital credit advanced by the Scheduled Banks or Central/State financial institutions for first five years from the date of commencement of commercial production or operation. The incentive will be so restricted as to ensure that subsidized interest rate is not below the Marginal Cost of Funds based Lending Rates (MCLR) of the lending institution. For the purpose of this Scheme, the working capital requirement of a unit shall be capped at 25 per cent of their annual turnover.
All eligible new industrial units will be eligible for reimbursement of 100 per cent insurance premium on insurance of building and Plant and Machinery for a maximum period of 5 years from the date of commencement of commercial production or operation. The units will get refund of GST for a period of five years and the central share of the income tax for the same period.
All eligible new industrial units can avail incentive on transportation of only finished goods through
Railways or the Railway Public Sector Undertakings, Inland Waterways or scheduled airline for a period of five years from the date of commencement of commercial production or operation, subject to production of actual receipts.
The notification further said that the DIPP will pay additional 3.67 per cent of the employer�s contribution to Employees� Provident Fund (EPF) in addition to Government bearing 8.33 per cent of the Employee Pension Scheme (EPS) contribution of the employer in the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY).