‍North East Industrial & Investment Promotion Policy (NEIIPP 2007) Highlights

The North East region has a lot of potential for industrial growth, but faces problems like low investment and a lack of motivation among individuals to establish businesses in this region . To fix these issues and promote growth, the North East Industrial & Investment Promotion Policy (NEIIPP) 2007 revised the earlier NEIP 1997, which focuses on providing various benefits and subsidies for businesses to invest and establish businesses in this region.

This article is a guide to NEIIPP 2007( North East Industrial & Investment Promotion Policy), highlighting its meaning, benefits under this policy, certain exemptions, applicability of this policy and how this policy is different from North East Industrial Policy 1997.

What is NEIIPP 2007?

The North East Industrial & Investment Promotion Policy was strongly introduced to promote industrial development in the North Eastern part of India. It replaced the earlier North Industrial Policy (NEIP) 1997. It began on April 1 2007, and lasted till 31 March, 2017. This policy not just benefited manufacturing industries but also certain service sector units, Biotechnology units, and power-generating units (up to 10 MW), and this policy applies to eight northeastern states defined under the North Eastern Council (NEC), i.e. Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and Sikkim. The North East Industrial Development Finance Corporation (NEDFi) work as the main agency to give subsidies under this policy

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Benefits under NEIIPP 2007

To help businesses grow in the North Eastern region, the government gives different benefits and incentives to support new businesses and existing ones that expand, upgrade, or start making new products. They can get incentives for 10 years if they start production within 10 years of NEIIPP, 2007. Below is a list of benefits, such as incentives and subsidies, provided under this scheme

1. No excise duty for finished goods: A 100% excise duty exemption applies to finished products in North Eastern region and if the Central Value added tax paid on raw materials and intermediate products used to make finished goods is more than excise duty on the finished product except for the products that are exempt or have no duty then the Ministry of Finance has made special rules to return the extra CENVAT credit.

2. Income tax exemption: A 100% income tax exemption applies under NEIIPP, 2007

3. Capital Investment subsidy: The capital investment subsidy is 30 % of the value of plant and machinery. A subsidy given up to Rs 1.5 crore per unit gets automatic approval, and the subsidy applies to private sector units, joint sector, cooperative sector, and units set up by State Governments in the North Eastern Region, if the unit asks for a higher subsidy than Rs 1.5 Crore but up to Rs 30 crore, an Empowered Committee reviews the proposal and for the proposals asking more than 30 crore of subsidy, the Department of Industrial Policy and Promotion sends them to the Union Cabinet for final approval.

4. Interest subsidy: An interest subsidy of 3% applies to working loan capital given by the scheduled banks or Central/state financial institutions in advance

5. Comprehensive insurance: Both new industrial units and existing units that expand a lot get 100% of their insurance premium paid back.

6. Travel Subsidy scheme: It will continue after 31.3.2007 on the same terms, and to prevent misuse or leakages, early review will be done, and under NEIP policy 1997, this subsidy covers 90 % of the cost to transport raw Materials from the source to the factory, and 50% of the cost to transport Finished Goods from the factory to the destination

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Applicability of Industries under NEIIPP 2007

In addition to the manufacturing sectors, benefits under NEIIPP 2007 have been extended to the services sector and other sectors. Here is a list of eligible industries

1. Service sector

Hotels (minimum two-star category )
Adventure and leisure sports (including ropeways)
Nursing home (at least 25 beds) and old-age homes
Vocational training institute for hotel management, catering, entrepreneurship, nursing, paramedical, civil aviation, fashion, design, and industrial training.

Note: IT training centres and IT hardware units get benefits under Section 80 IC of Income Tax to solve the problem of the lack of trained people in the northeast area

Biotechnology industry
Power Generating Industry
Power plants up to 10MW (conventional and non-conventional) get capital investment subsidy, interest subsidy and full insurance

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Exceptions for benefits

Certain products produced by certain industries are exempt from getting benefits under NEIIPP, 2007, which are as follows

All the goods falling under Chapter 24 of the Central Excise Tariff Act, 1985, that are related to tobacco or tobacco substitutes
Pan Masala products as covered in Chapter 21 of the Central Excise Tariff Act, 1985
Plastic carry bags that are thinner than 20 microns
Products made by petroleum, oil or gas refineries.

Difference between NEIP 1997 & NEIIPP 2007

Below is a table of the key differences between the North East Industrial Policy 1997 and the North East Industrial & Investment Promotion Policy 2007

Policy	Coverage of states	Duration	Investment increase for expansion	Capital investment subsidy	Service sector covered
NEIP 1997	Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim.	24 December 1997 to 23 December 2007	To get an incentive for growth, the unit must boost investment in machinery and plant by a minimum of 33½ %	15% subsidy on investment, up to Rs. 30 lakhs	No service sector covered
NEIIPP 2007	Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim.	1st April 2007, to 31 March 2017	To get an incentive for growth, the unit must boost investment by a minimum of 25%	30% subsidy on investment with automatic approval up to 1.5 crore	service sector (hotels, sports, nursing/old-age homes, training institutes) and the biotechnology and power generated industry are also covered

Conclusion

NEIIPP makes it much easier and more attractive for industries to invest in the North Eastern region with higher subsidies and incentives that support not only the manufacturing industry but also cover the service sector, biotechnology, and power generation industries. Industries starting production within 10 years of NEIIPP 2007 could get benefits like tax exemptions, capital subsidies, interest support and insurance for 10 years, and this helps the region grow faster by encouraging more people to invest and set up business there.

FAQs

1. Are all the types of work eligible for the benefit under NEIIPP 2007 ?

No benefits are given for small tasks like storing, cleaning, packing, labelling, sorting, or just changing the retail price of goods. Only real industrial work is applicable

2. How does the government make sure NEIIPP 2007 is properly followed ?

A special high-level or Advisory committee is set up to check that NEIIPP 2007 is properly followed, led by the Secretary of Industrial Policy and Promotion and includes ministries of Revenue, mDONER, Banking, Insurance, Planning Commission, NEDFi, and industry groups from the Northeast.