Investors from outside the state will be encouraged to invest in the state. Hundred percent equity ownership of an industrial unit by entrepreneurs will be allowed for a maximum period of 30 (thirty) years by the end of which period such equity holding will be reduced to 49 percent, the remaining 51 percent will be held by a local Arunachal Tribal entrepreneur or a group of local tribal entrepreneurs or the state government, if it considers necessary to do so.

Outside entrepreneurs may be allowed to hold land on lease for a period of 30 years, after which the lease may be renewed for a further period of 30 days. The consideration for the lease may be in the form of annual or lump sum payments or as equity. (The lease may be used as security for loans from financial institutions.)

Development of all industries will be encouraged. To begin with, the following industries are under priority.

• Industries based on locally available raw materials.
• Textiles (handlooms and power looms) and handicrafts.
• Electronics and knowledge based industries.
• Industries based on non- timber forest produce.

New Industrial Policy of Arunachal Pradesh 2001

This policy resolution is the second of its kind and will be known as "The New Industrial Policy of Arunachal Pradesh 2001". more..

Incentive Schemes

The State Government has conceived and brought package of incentives with a view of providing certain facilities to gear up industrialisation process in the State. The following incentives will be made available to all eligible industrial units.

Allotment of Land

The State Government will allot land to new units, on case to case basis except those in village and cottage industries sector. The land will be provided on lease of forty years (case to case basis). The value of the land will be decided as per prevailing rate approved by the Government. In those cases where a prospective entrepreneur already owns land and establishes industrial unit on such land then no lease rent/premium fee etc. will be charged if such person produces ownership certificate issued from competent authority. 

Allotment of Sheds to SSI Unit

For new small scale industrial units, built up factory sheds would be allotted to the entrepreneurs on monthly rent basis at concessional rates for a period of 3 years from the date of occupation of the shed. 

Manpower Development

The industrial units which are sending their workers for technical training, upgradation of skills in recognised/reputed training institutes or with established industrial units outside the State, shall be eligible for subsidy/stipend under this scheme provided they give an undertaking to the effect that all such trained people will be employed by them after successful completion of their training or otherwise the subsidy/stipend amount paid to the person concerned would be refunded in full to the Government by the unit which has sponsored them and claimed stipend and subsidy, the subsidy amount will be limited to 50% of the actual expenditure or Rs.5,000.00 whichever is less (Actual expenditure means the expenditure on course fee, fooding and lodging charges and travelling allowances by railway second class or by us ). This will be a one time incentive for an Industrial Unit.

State Capital Investment Subsidy

In order to encourage setting up of Industrial Units in the state in priority sector and also considering the higher cost of project in the state due to remoteness and transportation and communication bottleneck etc. the State Government will provide State Capital Investment Subsidy @ 15% in the case of tiny and SSI Units. In case of medium scale and large scale units a capital investment subsidy of 75% or Rs.12 lac whichever is less, will be admissible. The Department of Industries will be notifying the industries falling under priority sector from time to time. 

State Transport Subsidy

The State Government will provide transport subsidy at rates notified by the Government of India or by State Government from time to time to industrial units on transportation of raw materials and finished products between any location in the North Eastern Region and the location of Industrial Units in Arunachal Pradesh by surface. The transportation cost on inter district movement within the state are also eligible for the subsidy schemes. Transport subsidy shall also be available for Siliguri. Provision of Transport subsidy upto Calcutta would also considered on case to case basis. Hence the subsidy would be applicable from Siliguri or Calcutta or any placed within the North Eastern Region. Transport subsidy will also be made available for transportation of plants and machineries from any part of India to the location of unit in Arunachal Pradesh in case of only new units under priority sector.

Subsidy for Technical Knowhow

50% of the cost of Technical knowhow obtained by SSI and tiny industries from reputed and well established research and development Organisations or Rs.50,000.00 whichever is less may be considered for reimbursement on case to case basis. For obtaining such technical knowhow prior permission from the Department of Industries will have to be obtained. The amount will be released to the entrepreneur only on commencement of commercial production. 

Interest Subsidy 

The entrepreneurs will be given 4% subsidy on interest charged by Financial Institutions on term loans for a period of 5 years from the date of commissioning of their industrial unit subject to timely repayment of loans. The subsidy amount will be reimbursed to the entrepreneur on production of the relevant documents showing payment of loans/interest amounts. The enterpreneurs drawing loans from the National Schedule Cast Schedule Tribe Financial & Development Corporation shall not be eligible for claiming interest subsidy as these are already subsidised. 

Rehabilitation of Viable Sick Industries  

All the incentives schemes under the incentive scheme of 1994 declared for the new industrial units will also be available for revival of viable sick units subject to adoption of unit for revival by the financing institutions/body. 

Subsidy on drawl of Power Lines

The drawl of power lines from the main line to the factory site will be subsidised to the extent of 50% of the cost incurred by the entrepreneur or Rs.50,000.00 whichever is lower per unit, only to those units which are located outside the industrial estates or growth centres.

50% subsidy towards cost of diesel generating set of Rs.50,000.00 which ever is less may be considered on case to case basis for those sick units which fulfil following criterion:

• The rehabilitation package has been drawn and approved by the financing institution.
• Lack of adequate power supply is the root cause of sickness of such unit.
• The unit is falling within the priority sector.

Subsidy for the cost of Feasibility study and Project Report

Rs.25,000.00 or 50% of the cost of feasibility study and preparation of project report, whichever is lower in each case will be reimbursed to the entrepreneur provided the study has been conducted and project report prepared by an approved consultant, registered with the Directorate of Industries, Arunachal Pradesh. Prior permission/approval must be obtained from the Department of Industries before conducting such feasibility survey. The subsidy amount will be released only after commissioning of the project. 

Price Preference

The Government Departments, Semi-Government Organisations, Autonomous Government Organisations, Grant in Aid Institutions Departmental Undertakings, Public Sector Undertaking etc. while making purchases will give preference to the products manufactured by the local SSI Units registered with district industries centre or Directorate of Industries. All other things being equal, they will be given preference over the lowest rate produced by the units located outside the State and the rates of the preference are indicated below: 

7.5% Co-operative Venture and Large and Medium Industries 
15% SSI Units 
17% Cottage/tiny sectors. 

This incentive shall be available only to the products of those local industrial units which have obtained the necessary quality certificate from the appropriate and recognised Institutions/Authorities. Security/Earnest money Deposits will also be exempted for registered SSI Units. 

Quality Control

For purchase of Testing Equipments, 25% subsidy will be admissible to the SSI and tiny industries. Registration Fee and Annual Fee with Bureau of Indian Standards etc. will be reimbursed in full for the first five years, the Department of Industries shall be the nodal agency for the quality control of all industrial products in the state.

Subsidy on Power Supply

Subsidy on power supply will be provided to all the industrial units excepting (a) medium and large scale units and (b) the Plywood/veneer and saw mills irrespective of their size. for a period of three years from the date of commencement of commercial production. The rate of subsidy on the percentage of power tariff actually paid will be notified from time to time. The power subsidy will be confined only to the power consumed for the actual manufacturing process. 

Single Window Assistance

A single window service cell will be set up for assisting local entrepreneur to get all sort of required technical clearance, guidance etc. for undertaking any industrial project of activity in the state. 

Registration of SSI Units

Units fulfilling all formalities of registration will be given provisional or permanent registration by district industries centre/Directorate of Industries as early as possible. Nominal Registration fee will be charged for permanent or provisional registration. 

The above incentives are over and above the various other incentives offered by the Central Government for which separate publications/records are available in the office of Directorate of Industries and District Industries Centre.

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