The Finance Department, Government of Rajasthan, through an Order dated 17th December, 2019, has issued the Rajasthan Investment Promotion Scheme, 2019 (“The Scheme”). The scheme has come into effect from 17th December, 2019 and will remain effective till 31st March, 2026.
The Scheme is applicable to:
- New and existing enterprises that are making investments for setting up new units; and
- Existing enterprises that are making investment for expansion.
Following are the benefits provided under The Scheme to various industries like:
- Manufacturing Sector– Defined as a sector consisting of enterprises employing plant and machinery in processing of goods which brings into existence a commercially different and distinct commodity, will be provided with the following benefits:
i)Investment Subsidy of 75% of State tax due and deposited, for seven years.
ii)Employment Generation Subsidy in the form of reimbursement of 50% of employers contribution towards Employees’ Provident Fund and Employees’ State Insurance, for seven years. Such reimbursement will be provided for all employees in case the enterprise employs 75% of persons from people who are domiciled in Rajasthan and for all other enterprises, reimbursement will be provided only for employees belonging to Scheduled Caste, Scheduled Tribe, Persons with Disabilities and Women employees.
iii) 100% exemption from payment of Electricity Duty, Land Tax and Market Fee, for a period of 7 years and 100% exemption on Stamp Duty.
2. Electric Vehicles (Automobile Sector)– An electric vehicle is defined as an automobile that is propelled by one or more electric motors, using energy stored in rechargeable batteries. Such automobile sectors manufacturing electric vehicles and making an investment equal to or above Rs. 50 crores in Electric Vehicle manufacturing Unit, will be provided the following benefits:
i)5% Interest Subsidy on term loan taken by the enterprise from Financial Institutions or State Financial Institutions or Banks recognized by Reserve Bank of India, for making an investment in plant & machinery on the plant and machinery for a period of 5 years (maximum subsidy- Rs. 1 cr. per year); or
ii)Capital Subsidy equivalent to 25% of investment made on the plant & machinery (maximum of Rs. 50 lacs).
3. Food Processing Sector– Defined as a sector comprising enterprises engaged in such manufacturing processes in which raw product of agriculture, animal husbandry or fisheries is transformed to make it edible for human consumption. Such enterprises, making an investment equal to or above Rs. 5 Cr. in Food-Processing Sector will be granted the following benefits:
i)5% Interest Subsidy on term loan taken by the enterprise from Financial Institutions or State Financial Institutions or Banks recognized by Reserve Bank of India, for making an investment in plant & machinery, for a period of five years (maximum subsidy- Rs.25 lacs per year; or
ii)Capital Subsidy equivalent to 25% of investment made on the plant and machinery (maximum of Rs. 25 lacs).
4. Leather, Footwear and Accessories Sectors– Defined as a sector including enterprises manufacturing leather footwear or articles including finished leather, leather goods, leather garments, saddlery, footwear, footwear components and leather accessories. Such enterprises making an investment equal to or above Rs. 2 Cr. will be provided the following benefits:
i)5% Interest Subsidy on term loan taken by the enterprise from Financial Institutions or State Financial Institutions or Banks recognized by Reserve Bank of India, for making an investment in plant & machinery, for a period of five years (maximum subsidy- Rs. 25 lacs per year); or
ii)Capital Subsidy equivalent to 25% of investment made on the plant & machinery (maximum of Rs. 25 lacs).
5.Mineral Sectors– Defined as a sector comprising of enterprises engaged in manufacturing or using minerals mentioned in the list provided for such minerals in The Scheme as the main raw material. . Such enterprises making an investment equal to or above Rs. 2 Cr. will be provided the following benefits:
i)5% Interest Subsidy on term loan taken by the enterprise from Financial Institutions or State Financial Institutions or Banks recognized by Reserve Bank of India, for making an investment in plant & machinery, for a period of five years (maximum subsidy- Rs. 25 lacs per year); or
ii)Capital Subsidy equivalent to 25% of investment made on the plant & machinery (maximum of Rs. 25 lacs).
6.Medical Device Manufacturing Sector– Falling under the purview of Manufacturing Sector, enterprises in the medical device manufacturing sector making an investment equal to or above Rs. 5 Cr. in the manufacturing of Medical Devices will be granted the following benefits:
i)5% Interest Subsidy on term loan taken by the enterprise from Financial Institutions or State Financial Institutions or Banks recognized by Reserve Bank of India, for making an investment in plant & machinery, for a period of five years (maximum subsidy- Rs. 50 lacs per year) ; or
ii)Capital Subsidy equivalent to 20% of investment made on the plant & machinery (maximum of Rs. 50 lacs).
7. Solar Equipment Sector– Defines as a sector consisting of enterprises engaged in manufacturing (not assembling) of solar cells, semiconductors, storage batteries used in storing solar power, solar PV Cells and solar electric charging equipment or as per solar policy of Rajasthan. Such enterprises making an investment equal to or above Rs. 10 Cr. will be granted the following benefits:
i)25% additional Investment Subsidy of State tax (additional to the already available 75% subsidy for manufacturing enterprises) due and deposited for seven years;
ii)25% additional Employment Generation Subsidy (additional to the subsidy already provided to manufacturing enterprises) in the form of reimbursement of employers contribution in EPF and ESI, subject to upper limit of 75% Employment Generation Subsidy for any employee, towards employees EPF and ESI for seven years;
iii) Exemption from payment of Electricity Duty for additional three years (additional to the 7 years already exempted for manufacturing enterprises);
iv)5% Interest Subsidy on term loan taken by enterprise from Financial Institutions or State Financial Institutions or Banks recognized by Reserve Bank of India, for making an investment in plant & machinery, for a period of five years (maximum subsidy- Rs. 25 lacs per year);
v)Capital Subsidy equivalent to 20% of investment made on the plant & machinery (maximum of Rs. 50 lacs).
8. Textile Sector– Defined as a sector comprising enterprises engaged in manufacturing/processing of all kind of fibres, yarn, fabrics, khadi, handloom, using processes as Spinning, Weaving, Dyeing & Processing, Knitting, Machine Carpeting, Machine Embroidery and any other activities/process like crimping, texturing, twisting, winding, sizing and other such processes within the entire textile value chain. Such enterprises making an investment equal to or above Rs. 25 lacs in the Textile Sector shall be granted the following benefits:
i)Capital Subsidy on zero liquid discharge based effluent treatment plant which will be equivalent to 20% of the amount paid to the suppliers for constructing such effluent treatment plant (excluding civil work) (maximum subsidy- Rs. 1 Cr.);
ii)5% Interest Subsidy on term loan taken by enterprise from Financial Institutions or State Financial Institutions or Banks recognized by Reserve Bank of India, for making an investment in plant & machinery as specified under the Technology Upgradation Fund Scheme (“TUF Scheme”) of Government of India, for a period of 5 years; or
iii) 6% Interest Subsidy on term loan taken by enterprise from Financial Institutions or State Financial Institutions or Banks recognized by Reserve Bank of India, for making an investment in plant & machinery as specified under the TUF Scheme of Government of India, for a period of 5 years, for enterprises making investment more than Rs. 25 Cr. ; or
iv)7% Interest Subsidy on term loan taken by enterprise from , Financial Institutions or State Financial Institutions or Banks recognized by Reserve Bank of India, for making an investment in plant & machinery as specified under the TUF Scheme of Government of India, for a period of 5 years, for enterprises manufacturing Technical Textiles, Khadi & Handloom; or
v)Capital Subsidy equivalent to 25% of the investment made on the plant & machinery as specified under the TUF Scheme of Government of India, subject (maximum of Rs. 50 lacs).
9. Apparel Sectors– Defined as a sector comprising of enterprises engaged in manufacturing of wearable or non-wearable stitched fabrics including apparel, garments and made-ups, at least two sides of which are stitched using sewing machinery. Such enterprises of the Apparel Sector will be provided with the same benefits as those which are to be provided to the enterprises of the Textile Sector.
Source: Finance Department, Government of Rajasthan
