Aiming to promote industrial development in Jammu & Kashmir, the Centre has extended the special package, under which subsidy on investment and interest rate is offered to business units, to the state for five years till 2017.

The total outlay for the period of the new package is Rs 295 crore, the Commerce Ministry said on Friday.

“In order to provide continuity and to maintain the enabling environment for ongoing industrial development of the state of Jammu & Kashmir, it has been decided to extend the incentives under the special package for a further period of five years from June 15, 2012 to June 14, 2017,” it said.

The incentives under the special package include a capital investment subsidy at the rate of 15 per cent of investment in plant and machinery subject to ceiling of Rs 30 lakh.

However, micro, small and medium enterprises (MSMEs) would be eligible for capital investment subsidy at 30 per cent of the investment into plant and machinery subject to a ceiling of Rs 3 crore and Rs 1.5 crore for manufacturing and service sector respectively to all new industrial units and existing industrial units on their substantial expansion.

Besides, it includes interest subsidy at the rate of 3 per cent on the average of daily working capital loan to all new units for a period of 5 years from the date of commencement of commercial production.

The special package also includes a central comprehensive insurance subsidy scheme with 100 per cent reimbursement of premium to all new and existing units on their substantial expansion for a period of five years from the date of commencement of commercial production.

The scheme will be implemented through the state government and funds will be disbursed through Jammu and Kashmir Development Finance Corporation (JKDFC).

The above benefits can be availed by industries set up in notified industrial parks and estates. The list of these notified areas has been expanded in consultation with the state government.

The list of thrust industries which can be set up any where in the state, to be eligible for subsidy under the package, has also been expanded to include flour mills and rice mills, spice grinding, pasteurization or processing of milk and other dairy product, mushroom culture, compost making, dairy farming, packaging industry, bottling of mineral water, stationery items and wood based industry.

All new units in the notified area in Jammu and Kashmir excluding negative list and all new units of thrust industry outside notified area in J&K will be eligible for subsidy under the package for a period of 5 years.

The earlier package of industrial incentives for the state was announced on June 14, 2002 for a period of 10 years upto June 14, 2012 under which, a subsidy amount of Rs 158.45 crore was released.