NEIIPP & ASIDE : Features

NEIIPP & ASIDE : Features

Question - The North eastern states of India are rich in economic resources. Discuss the features of the North East Industrial and Investment Promotion Policy/NEIIPP and ASIDE (Assistance to States for Developing Export Infrastructure) for promoting rapid industrialisation of this region.

North East Industrial and Investment Promotion Policy/NEIIPP: Features

• For promoting industrialisation in the north eastern states and overall growth of this region, the NEIIPP has been announced from 2007 onwards

• The duration of this package of fiscal incentives is for 10 years

• It provides grants for:

- Central Capital Investment Subsidy at the rate of 30 percent of investment in plant and machinery
- Central interest Subsidy at the rate of 3 percent of working capital loan for duration of 10 years from commencement date of commercial production/DOCP
- Reimbursement of insurance premium paid for insurance of capital assets which are fixed for 10 years from DOCP
- Excise duty exemptions for 10 years from DOCP
- Income tax exemptions for 10 years from the DOCP

• Manufacturing and services sector units have been set up covering numerous fields such as pharma, steel and rolling mill and FMCG under this scheme

ASIDE: Features

• Government has been implementing the Assistance to States for Developing Infrastructure/ASIDE scheme under which special emphasis has been provided to north eastern region’s infrastructure

• The scheme aims to involve states in export through assistance to State Governments for creation of appropriate infrastructure for development as well as growth

• Mechanism for involving state governments in assistance linked to export performance is the key focus of this scheme

• Scheme provides outlay for development of infrastructure for export which is to be distributed through pre-established criteria

• Existing EPIP, EPZ and CIB schemes have been merged with the ASIDE scheme
• Scheme for Export Development Fund for North East and Sikkim implemented since 2001 has also been incorporated under ASIDE

ASIDE aims for:

- Creation of Export Promotion Industrial Parks/Zones including SEZs and Agri Business Zones for augmentation of facilities in the current ones

- Establishment of electronic and other infrastructure within the conclave for exports

- Equity participation in infrastructure projects and SEZs

- Meeting capital outlay requirements of EPIPs/EPZs and SEZs

- Complementary infrastructure development such as rail, roads connecting production centre with ports, setting up of inland container depots and so on

- Stabilisation of power supply;additional transformers for export production centres

- Developing minor ports and jetties of specification to meet export requirements

- Setting up of common effluent treatment facilities

- Projects of national and regional importance being set up for export promotion

Facts and Stats

• Average annual growth rate of industries in the north east region is only 3.94% as compared to 10.42% for the rest of India in the period between 2004-2005 to 2009-2010

• Industrialisation is yet to progress in the north east

• Manufacturing accounts for just 6.84% of GSDP/Gross State Domestic Product of NE states in 2011-2012

• This is a decrease from 7.59% in 2004-2005

• The corresponding percentage at national level is 15.7%