J&K Govt notifies Private Industrial Estate Policy rules, 2021-30

24 August 2021

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Srinagar, Aug 24: Jammu & Kashmir government on Monday announced the rules for the J&K Private Industrial Estate Development Policy, 2021-30, the approval for which was accorded by the Administrative Council on August 14, 2021.

According to the rules notification, a copy of which has been obtained by Ziraat Times, the policy envisages development of private industrial estates on Public Private Partnership and revenue sharing model. The rules also specify allocation of annual budget under J&K’s annual budget to provide subsidy and other incentives for the scheme for the promoters.

Pertinently, Jammu and Kashmir announced its ﬁrst Industrial Policy in 1995 and substituted it by another policy in 1998. The first detailed and comprehensive Industrial Policy was announced in the year 2004 which was followed by Industrial Policy of 2016. These policies provided the basic mechanism of Industrial Land Allotment along with development of Private Industrial Estates.

This latest policy comes in the wake of low response for industrial investment in J&K since August 5, 2019. It shall remain in operation for ten years from the date of its adoption.

“As a sequel [of past industrial policy schemes], an elaborate framework for development of Private Industrial Infrastructure requires to be detailed for attracting large industrial investments in the private sector”, the government order reads.

Incentives under the scheme to be provided by J&K administration

Besides providing road connectivity, water connection and electricity upto the proposed Estate/Park, subject to the conditions laid down in Appendix-I (Finance Department U.O. No FD-Code /145 /2021- 334 dated 13.08.2021), Industrial Parks set up on private land shall be entitled to Capital Infrastructure Subsidy of the cost incurred for the development of common industrial infrastructure & utilities such as common effluent treatment plant, working men and women hostels, testing centres, diagnostics labs and R&D centres for health care, tool rooms, recreational facilities or any other common industrial / social infrastructure development activity duly approved by the government. The rate for the Capital Infrastructure Subsidy shall be:

For investment upto Rs 25 Crore:

20% & 30% subject to maximum of Rs. 5.00 Crore & Rs. 7.50 Crore for areas in Zone A & B respectively.

For investment above Rs 25 Crore:

20% of the cost incurred with minimum subsidy of Rs 5.00 Crore and maximum subsidy of Rs. 20.00 Crore. This shall be determined on the principle of additional subsidy of Rs 1.00 Crore for addition of each acre of land over the minimum 5 acre in Zone A;
30% of the cost incurred with minimum subsidy of Rs 7.50 Crore and maximum subsidy of Rs. 30.00 Crore. This shall be determined on the principle of additional subsidy of Rs 1.50 Crore for addition of each acre of land over the minimum 5 in Zone B;
For IT sector, the applicable rate shall, however, be uniformly @ 20% & 30% subject to maximum of Rs. 20.00 Crore & Rs. 30.00 Crore for areas in Zone A & B respectively.

The subsidy shall be disbursed after the date of operation of such Industrial Estates/Parks.

APPLICATION FOR SETTING UP OF A PRIVATE INDUSTRIAL PARK/ ESTATE:

The Applicant intending to set up a Private Industrial Estate/Park, must submit a Detailed Project Report (DPR) online along with the application. The Detailed Project Report shall comprise of: Promoter’s background including qualiﬁcation and experience; Title documents of the land area applied for and tentative break-up of possible areas; Plan Layout; Implementation Schedule; Total investment detail including investment in Technical and Non-Technical Civil work, Requirement of Working Capital; Sources of Finance for the Project; Projected Employment details; Power requirement; Water requirement; Balance Sheets for the last three years of the Applicant Company / Promoters with necessary Resolutions, IT Returns and documents concerning ﬁnancial /technical support, if applicable; The land documents depending on types of organization viz. Proprietorship, Partnership, Trust, Private / Public Limited Company, etc. along with certiﬁed copy of the Partnership Deed, Memorandum and Article of Association and relevant documents, as applicable.
An undertaking that the estate shall strictly be use for industrial activity and in case of failure the estate shall be subject to management and regulation by the Industrial Development Corporation.

Who would appraise and evaluate proposals?

Private Promoters shall be allowed and encouraged to develop Private Industrial Estates/Parks on commercial lines on activity specific cluster basis over an area of at least 5 Acres. In case of IT/ITeS parks, the minimum requirement will be 2 Acres for housing IT units in ﬂatted accommodation.
All the applications received shall be scrutinized (on technical and financial criteria) by the Divisional Level Evaluation Committee. The timeline for screening shall be 07 days.

The composition of each Divisional Level Evaluation Committee shall be as under:

Director, Industries and Commerce, of the concerned Division – Chairman
Joint Director (Dev) Directorate of Industries & Member Secretary Commerce concerned
General Manager of DIC concerned ‘ Member
Executive Engineer, EM&RE Wing Power Member Development Department ‘
General Manager, SIDCO i Member
General Manager, SICOP ; Member
Representative of Pollution Control Board Member
Representative of J&K Bank I Member
Any other person can be co-opted by the Committee having subject matter specialization

For evaluating an application, the Divisional Level Evaluation Committee shall take into consideration the following parameters:

Level of Proposed Investment
Extent of employment generation
Qualification of the applicant(s)
Experience of the applicant(s)
Land Utilization
Women Entrepreneur/ Ex-Servicemen/ Scheduled Caste Resource Position
Income tax payments by applicant(s) (if applicable)
Past performance of existing operations of the applicant/ group concerns
Start-up/ micro industries/ new technologies/ projects with innovative ideas
Environment friendly, energy efﬁcient, high tech, high value added enterprises

After preliminary scrutiny by the Divisional Level Evaluation Committee the applications shall be submitted to the Divisional Commissioner concerned for furnishing following documents:

Title veriﬁcation and Change of Land Use requirement;
Approval as per Master Plan/ Housing Department norms
The timeline for issuance of above documents shall be 15 days from the date of receipt of application from the Divisional Level Evaluation Committee.
Divisional Level Evaluation Committee within 7 days after receiving the above documents shall submit the case to Project Clearance Committee for detailed review and recommendations. The Project Clearance Committee shall decide the case within 30 days.

PROJECT CLEARANCE COMMITTEES

There Project Clearance Committee shall be with the following composition:

Administrative Secretary, Industries and Chairman Commerce Department
Representative from Revenue Department not Member below rank of Additional Secretary
Representative from Power Development Member Department not below rank of Additional Secretary
Representative from Department of Forest, Member Ecology and Environment not below rank of Additional Secretary
Representative from Housing and Urban Member Development Department not below rank of Additional Secretary
Member Secretary, Pollution Control Board Member
Director, Industries & Commerce Concerned Member Secretary 8 MD SIDCO Member
MD SICOP Member
Representative of the Industry nominated Member

Following conditions shall be considered while an application is being examined by the Project Clearance Committee:

The line of activities in the proposed Park/Estate should be falling in the category of permissible activities; should not involve high pollution and high water consumption.
Applicant(s) already having a similar project, its status physical as well as ﬁnancial.
Any pre-requisite Clearance required for establishment in addition to clearance sought by the Divisional Level Evaluation Committee.
Apart from points mentioned above, the committee must also consider the justiﬁcation of the land applied for.

The Committee shall make speciﬁc recommendations while clearing a case or otherwise. The Committee shall decide the case within 45 days. Once cleared by the Project Clearance Committee, Industries and Commerce Department shall place the case before the Competent Authority for seeking approval.

ISSUANCE OF PROVISIONAL CERTIFICATE

Once approved, the Director Industries and Commerce, concerned shall immediately issue Private Industrial Estate Provisional Certificate to the applicant.
The promoter would be responsible for the operation and maintenance of the facilities created within the estate following the bench-mark standards laid down by the Government.

FAILURE TO RUN THE ESTATE

If after the issuance of Provisional Certificate and necessary government infrastructure has been provided, the promoter fails to develop the industrial estate within two years of issuance of the provisional certificate, or deviates from the allowed activities to be carried in an industrial estate, the land shall be subject to further development by the Industrial Development Corporation (SIDCO) who shall maintain and regulate it like other industrial estates of the Corporation.

In such case, a revenue sharing agreement may be executed between the owner and the Industrial Development Corporation.