April 2002 News

Cabinet mulls making J&K tax-free zone

17 April 2002
The Times of India
BISHESHWAR MISHRA

NEW DELHI: The Centre is planning to turn Jammu and Kashmir into a ‘tax-free zone’ for the next 10 years as part of a major industrial development package aimed at combating militancy in the state through a two- pronged policy of ‘‘security with development’’.The industrial promotion package for Kashmir is expected to be formally announced by Prime Minister Vajpayee during his proposed visit to the state shortly.The Central department of industrial policy and promotion has already drawn up a comprehensive package for promoting investment in J&K and for revival of existing industrial units in the state. The package has also been cleared by the Planning Commission and will soon go before the Cabinet Committee on Economic Affairs for final approval, official sources said.The key elements of the package are• Converting the whole of J&K into a tax-free zone for the next 10 years for the purpose of income-tax and excise duty;• Setting up of J&K Development Finance Corporation (JKDFC) with a one-time Central grant of Rs 50 crore as seed capital;• Placing a corpus of Rs 100 crore at the disposal of the JKDFC for reviving sick industrial units in the state;• Enhancing Central assistance under the growth centre scheme to Rs 15 crore per centre from Rs 10 crore at present in the form of a grant to the state;• Providing capital investment subsidy at the rate of 15 per cent of the investment in plant and machinery subject to a maximum ceiling of Rs 30 lakh for new industrial units; and• Providing an interest subsidy of three per cent on the working capital loan to all new industrial units for 10 years after commencement of commercial production.

 

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