The Government is implementing a package of incentives for the Special Category States of the North East (including Sikkim) and the States of Jammu & Kashmir, Himachal Pradesh and Uttarakhand.

Incentives for the States of North East (including Sikkim), States of Jammu & Kashmir, Himachal Pradesh and Uttarakhand comprise the following:-

For the North East States (including Sikkim) and the State of Jammu & Kashmir

i) Central Capital Investment Subsidy;
ii) Central Interest Subsidy;
iii) Central Comprehensive Insurance Subsidy;
iv) Transport Subsidy;
v) 100% Central Excise duty exemption with CENVAT benefit; and
vi) 100% Income Tax exemption

For the States of Himachal Pradesh and Uttarakhand

i) Central Capital Investment Subsidy;
ii) Transport Subsidy;
iii) 100% Central Excise duty exemption (lapsed on 31.03.2010); and
iv) 100% Income Tax exemption for five years and thereafter @ 30% for companies and 25% for other than companies for the next five years.

Many other States have also requested for similar packages but it has been the consistent stand of the Government not to extend or announce any fresh package in view of the reason that the afore-mentioned special category States have adverse geographical locations and other specificities. The States which have requested for packages in the past are Andhra Pradesh, Bihar, Chhattisgarh, Goa, Gujarat, Jharkhand, Karnataka, Madhya Pradesh, Orissa, Punjab, Rajasthan, Uttar Pradesh and West Bengal.

This information was given by Shri Jyotiraditya M Scindia, Minister of State for Commerce and Industry, in a written reply in the Lok Sabha today.

Promotion of industries incentives protect investment by granting tax and subsidy relief to designated backward regions. The Government offers targeted incentives for industrial promotion in designated backward regions: for the North East (including Sikkim) and Jammu & Kashmir the package includes Central Capital Investment Subsidy, Central Interest Subsidy, Central Comprehensive Insurance Subsidy, Transport Subsidy, 100% Central Excise duty exemption with CENVAT benefit, and 100% Income Tax exemption. For Himachal Pradesh and Uttarakhand the package includes Central Capital Investment Subsidy, Transport Subsidy, a now lapsed 100% Central Excise duty exemption, and a five year 100% Income Tax exemption followed by reduced rates for the next five years.