New Delhi: Jammu and Kashmir Chief Minister Omar Abdullah on Friday met Union Finance Minister P Chidambaram and sought extension of industrial policy under which entrepreneurs setting up production units in the state are granted exemption from income tax.
During his meeting with the Union Minister, Omar advocated continuance of the incentive package for industrial sector which had lapsed on June last year.
He said the state government through a consultant deputed by Industrial Policy and Promotion (DIPP) had raised the issue with the Commerce and Industry Ministry for extension of the package for another 10 years.
Omar suggested the policy should include the clause of "location neutrality" so that the industrial unit situated outside Industrial Estates also benefitted.
The Chief Minister sought early approval of the extension from the Ministry of Finance and the Planning Commission, a release of the state government said.
The policy was introduced in the state on June 14, 2002 for a period of 10 years under which anyone setting up a manufacturing unit in designated industrial estates of the state are exempted from paying income tax on profits earned from the same unit.
Among other matters discussed during the meeting with Chidambaram included resource position, Annual Plan, PMRP, Special Plan Assistance (SPA) to Jammu and Kashmir, Security- Related Expenditure (SRE), open market borrowing, flow of central assistance and expressed other related issues.
The Chief Minister expressed gratitude to the Centre for liberal financial assistance to the state in its endeavour to carry forward development strategy and meet expenditure needs on various counts.
In the meeting, Omar requested for early release of Rs 1719 crore which was pending with the Centre for various schemes.
The Chief Minister emphasized on exemption of additional market borrowing, included as a component for plan financing, from calculating the state’s FRL-Constant fiscal deficit targets as recommended by the 13th Finance Commission.
Discussing the flow of central assistance, Omar said in case of the state, which has limited working season, there was a need for judicious plan implementation, upfront release of central assistance and grants to avoid mismatch in the requirement.
"It would be much more meaningful if the tied funds and centrally-sponsored schemes are sanctioned or released in the beginning of the year. Alternately, at least 50 per cent funds should be released in April and the balance after the stipulated percentage of available funds has been utilized by the state," he said.
The Finance Minister assured his full support to the Chief Minister in his efforts of resource mobilization and said the matters raised would be sorted out on priority, the state government release said.