Incentives and

Subsidies in J&K

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 S - Definition
Ñ inistry of Small Scale Industries created in 1999

Ñ inistry of icro, Small and edium nterprises created

in ay 2007

(A) ANUFACTURING NT RPRIS S

Ñ icro : The investment in plant and machinery does not

exceed Rs.25 lakhs

Ñ Small : The investment in plant and machinery is more

than 25 lakhs

Ñ edium : The investment in plant and machinery is more

than Rs. 5 crores but not exceeding Rs.10 crores.
 S - Definition
(B) S RVIC NT RPRIS S

Ñ icro : The investment in equipment does not exceed Rs.

10 lakhs.

Ñ Small : The investment in equipment is more than Rs.10

lakh but does not exceed Rs.2 crores.

Ñ edium : The investment in equipment is more than Rs.

2 crores but does not exceed Rs. 5 crores.
Changing nature of S in India
Ñ World class professionals taking risk to
become entrepreneurs
Ñ Quality of entrepreneurs on rise
Ñ Globalization has opened several new
opportunities for S s
Ñ S s looking at scales, global markets,
tie ups, multi location units

In the current globalized business scenario, Indian

MSMEs have a large untapped growth potential and
need access to risk capital for investing in new
technologies and business methods to realize it.
 Challenges faced by S
Ñ Limited access to risk / growth
capital and resulting leveraging
Ñ Operate in fragmented markets
Ñ Vulnerable to market fluctuations
Ñ Limited access to technology and
product innovations
Ñ Lack of awareness of global best
practices
Ñ S s require high level of
handholding
 Incentives and Subsidies
Definition
Ñ

 , is a general term which includes
concessions, subsidies and bounties. A thing that
encourages somebody to do something.
Ñ à
 , a reduction in price for particular
categories of people.
Ñ R
, denotes a single lump sum given by the
govt. to an entrepreneur to cover the cost. It is
granted to an industry which is considered to be
essential in the national interest·
 Objectives of Incentives
Ñ To stimulate and motivate an entrepreneur to set
up new ventures.
Ñ To encourage entrepreneurs to take action and
decisive decisions.
Ñ To encourage entrepreneurs to set up their
ventures in rural and backward areas.
Ñ To increase the ability of the entrepreneur to face
competition.
 J&K Scenario
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   + " r$ 
Ñ It is the endeavour of all industries to employ local
people but 90-10 clause is not practically possible
to implement which needs to be discussed.
Ñ Need to do seminars / workshops with support
from State Government on issues like nergy
Audit, Carbon Credits, etc.
Ñ Local entrepreneurs lack excess and exposure to
the latest trends and innovations for which State
Govt. should take delegations of Industrialists to
industrially advanced states and countries.
   + " r$ 
Ñ Govt. should help in encouraging Joint ventures
between local and outside entrepreneurs , between
local entrepreneurs & Govt. for which serious
interaction with Govt. & associations be initiated.
Ñ Further inistry of non ± conventional energy
resources be impressed to develop & implement
project for Industrial states for street lighting on
solar power which will cut down the power
consumption and same power can be used for
industrial purposes.
   + " r$ 
When the state industrial policy was introduced w.e.f.1st
Feb.2004, some new elements were introduced :
Ñ Developing world class infrastructure for speedy industrial
development.
Ñ ncourage existing industrial units to modernize.
Ñ Provide incentives on brand promotion keeping in view the
role of brands in promoting sales
Ñ Concentrate on thrust areas for development.
Ñ The spirit behind this was to encourage and sustain the
existing struggling industry of J&K out of red and
simultaneously attract new investments. But unfortunately
the desired results could not be attained.
   + " r$ 
Ñ Relief from the Inspector Raj


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   + " r$ 
Ñ Cross- LOC Trade

For achieving dual goals of conomic Development and peace

building using a market development intervention, we
strongly suggest that all goods manufactured in J&K be
brought into the ambit of LOC Trade in addition to any point
on LOC close to Border e.g. Pallanwala - Chhambh and
Nowshehra ± irpur be opened as a trade point as this would
facilitate Trade at extremely competitive prices & new
market shall become available to local industry. Subsequently
the other issues of financial transactions also be resolved with
banking facilities
—hank You

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