Procedural Guidelines To Industrial Policy 2016-26

Process followed for preparation of Procedural Guidelines to the Industrial
Policy, 2016-26
1. Background
1.1 New Industrial Policy (2016-26) of the State was issued with the approval of
State Administrative Council, Decision No. 31/05/2016 dated 14.03.2016 vide
Government Order No. 58-Ind of 2016 dated 15.03.2016.
1.2 After issuance of the Industrial Policy, 2016 various Industrial Associations
demanded elaboration of it‟s various provisions. A representation of the
Federation of Industries, Jammu was received through the office of Hon‟ble
Governor, J&K vide No. GS/I&C/2016/155(NIP-JK)16/4130 dated 29.03.2016.
1.3 Industrial Associations also approached the Hon‟ble Chief Minister and the
Hon‟ble Minister for Industries & Commerce with the request for elaboration of
provisions pertaining to Change in Constitution/Transfer of lease hold rights,
timelines for taking „Effective Steps‟ and „Coming into Production‟ etc. In this
regard, Hon‟ble Chief Minister chaired a meeting at Srinagar during May, 2016
and directed the Department to elaborate various provisions of the Industrial
Policy, 2016 by issuing detailed Procedural Guidelines.
2. Necessity
2.1 The Policy document is in fact a broader framework, outlining the Government‟s
intent to create an enabling environment for better Industrial development and
growth. However, a broader outline at times keeps scope for clarity, elaboration,
explanation and detailing.
2.2 Issuance of detailed Procedural Guidelines is also necessitated for clarity over
some specific issues not dealt in detail in the New Industrial Policy-2016, such
as:
(i) How to dispose off the cases of Change in Constitution/Name & Style/
Line of Activity/Additional Line of Activity and Transfer of lease hold
rights (outright sale) etc. received in the DICs/Directorates of Industries &
Commerce prior to the date of New Industrial Policy coming into force i.e.
15-03-2016 and found eligible but which could not be disposed off, etc.
(ii) How the provisions of Change in Constitution would apply to family
members/legal heirs in case of death of allottee(s)/partner(s)/shareholder(s)
before or during project implementation and for such changes proposed in
case of the Units on private land etc.
(iii) Self Undertaking mechanism and its application form under “Ease of
Doing Business”.
3. Process followed for preparation of Procedural Guidelines
3.1 On the basis of feedback from the Industrial Associations, field agencies of the
Department and keeping in view all such provisions of the Industrial Policy (IP)
which required elaboration, process of drafting of Procedural Guidelines with
reference to the IP, 2016 was initiated in the Department in June, 2016. A
Committee comprising of Directors, Industries and Commerce, Jammu/Kashmir,
Additional Secretary (I&C) and other officers was assigned the task of preparing the
Draft of these Guidelines.
3.2 After a series of discussions held in the Department, the Draft Guidelines arrived at
were forwarded to different Industrial Associations of the State in both Kashmir and
Jammu Divisions for their comments/suggestions. Besides that, Draft Guidelines
were also put in public domain through two official websites of the Directorates of
I&C, Kashmir/Jammu on 24th of October, 2016 to solicit further objections/
suggestions from all stakeholders/ general public. The feedback/suggestions were
received from President, Association of Industries, Jammu and President Bari
Brahmana Industrial Association (BBIA), Jammu. Likewise, suggestions were also
received from J&K, SIDCO.
3.3 The feedback/suggestions received from different quarters were examined in the
Department and the Hon‟ble Minister, Industries & Commerce convened a meeting
with all the Industrial Associations of the State including those who had not
provided any suggestion/feedback, before the finalization of the Operational/
Procedural Guidelines. The Meeting was held on 11th of Nov, 2016 at Udyog
Bhawan, Jammu with representatives of all the below mentioned Industrial
Associations of J&K:
I. Bari Brahmana Industrial Association, Jammu;
II. Federation of the Chambers of Industries, Kashmir;
III. Association of Small & Tiny Industries;
IV. Chamber of Indian Industries, J&K;
V. Digiana Industrial Association and
VI. Gangyal Industrial Association.
3.4 The representatives of these Industrial Associations who participated in the meeting
were heard in detail and their suggestions were recorded for consideration/inclusion
in the Guidelines. Suggestions received and the Department‟s views are as under:-
S.No. Suggestions Department’s view
1. Processing fee may be exempted It was decided that a fee of Rs.100/- only
in case of Micro Units and shall be charged in case of Start-ups, Micro
Women Entrepreneurs. Units and Women Entrepreneurs.
2. Land may be allotted on the basis A provision of being heard shall be provided
of DPR prepared by the in the guidelines in case an entrepreneur is
consultants approved by the aggrieved on account of land allotted lesser
Department. than the mentioned in DPR.
3. Govt. Order may be issued in G.O No: 48-IND of 2017 dated 03-03-2017
respect of transfer of the existing has been issued in this regard.
IEs with DICs to SIDCO and
SICOP as per the IP, 2016.
4. The land premium rates may be Board of Directors of SIDCO in it‟s 134th
notified for allotment of land upto meeting held on 28.11.2016 has resolved as
05 kanals to Micro and Small under:
Enterprises @ Rs. 2.00 Lac/kanal. “Resolved that Start-ups/Women/Small
units having land requirement upto 02
kanals in respect of Zone-A mentioned in
the Industrial Policy 2016, may be charged
premium @ Rs. 03 lac per kanal, subject to
confirmation from the State Cabinet”
Para 6.1 of the Procedural Guidelines has
accordingly been incorporated.
5. “Effective Steps” may be clarified The „Effective Steps‟ have been clearly
in detail and timeline for effective defined in para 2.12.2 of the IP, 2016 and
steps as well as coming into include Construction of Building and
production may be increased from Placement of orders for procurement of
2 to 3 years as in certain Machinery. The request for enhancing the
enterprises like Flour Mills, timelines has been addressed through a
construction of Building may take provision of extension of timelines on case-
more than 2 years. to-case basis by the APCC.
6. The rates for transfer of vacant The rates for transfer of vacant land shall be
land be notified and no fee be notified by the Corporations from time to
charged for the transfer of vacant time and the request for exemption of fees
land to legal heirs. for transfer of land/Unit to legal heirs is
accepted.
7. The timeline for taking „Effective Suggestion accepted.
Steps‟ and „Coming into
Production‟ may be reckoned
from the Date of approval of
Building Plan instead of the Date
of Allotment.
8. The Corporations or the Directors The lease rent rates is to be decided by the
(I&C) may notify the lease rent Board of Directors of SIDCO/SICOP and
rates. shall be accordingly notified from time to
time.
9. The cases of MSMEs for Provision already exists in para 4.2.8 of the
extension of timeline for effective IP, 2016.
steps and coming into production
may be referred to the respective
Directorates of I&C and that of
the Large Units may be referred
to the APCC.
10. No cancellation order in case of Suggestion accepted.
the Projects under implementation
may be issued by the Estate
Manager without consultation
with the Financial
Institutions/Banks.
3.5 The revised draft of Procedural Guidelines, prepared after incorporating
suggestions was then sent to the Finance Department for its concurrence on
21.12.2016. The Finance Department gave it‟s concurrence to the Procedural
Guidelines vide U.O No: FD-VII-II(228)/Ease of Doing Business/2016 Dated
08-03-2017.
3.6 The concurrence of the Law Department to the Draft Procedural Guidelines has also
been received vide No. LD(Con)2016/4-Ind dated 12.04.2017.
4. Resolution
Accordingly, the Commissioner/Secretary, Industries & Commerce, with the prior
approval of the Hon‟ble Minister for Industries & Commerce has submitted the
proposal for Cabinet approval to adopt the Procedural Guidelines, 2016-26 which are
enclosed herewith.
Procedural Guidelines for establishment of Industrial Units in

Jammu & Kashmir to the Industrial Policy, 2016-26.
1.0 Registration of Units:-
1.1. The provisional registration of industrial units shall be done online by
the concerned DIC. The General Manager, after issuing dated
acknowledgement, shall issue provisional registration within one (01)
day.
1.2. The registration forms, Entrepreneur Memorandum – I & II (EM-I &
EM-II) shall be continued concurrently with the Udyog Aadhar
Memorandum (UAM) till EM-I & II are fully replaced with UAM.
1.3. A non-refundable processing fee of Rs.1000/- shall be payable,
directly to be deposited in the treasury under Major Account Head-
0851 Village & Small Industries. However, in case of Micro units and
women entrepreneurs, a fee of Rs.100/- only shall be applicable.
1.4 In respect of Micro units, the submission of DPRs shall be dispensed
away with. However, a project profile shall have to be submitted in
place of DPR.
1.5 Registration of all enterprises shall be done by the General Manager
of DIC concerned subject to any other condition(s) laid by the
State/Central Government from time to time in this behalf. Besides
that, registration of a unit proposed to be established in any
industrial estate managed by SIDCO/SICOP shall not be done
without confirmation of availability of land suitable for setting up of
the proposed unit, by concerned Corporation.
1.6 In case of enterprises having investment of more than Rs. 5 crore in
Plant & Machinery, the concerned General Manager DIC shall transfer
all the requisite documents, including DPR, to the concerned Director,
Industries & Commerce or to the Nodal Officer nominated by SIDCO,
for approval of the project by the Single Window Clearance
Committee/APCC, as the case may be, in terms of para 2.1.1 & 2.1.2
of these guidelines. The General Manager DIC shall transfer such
case(s) to the Director, Industries & Commerce and/or to the
nominated Nodal Officer of SIDCO within seven (07) days from the
date of provisional registration. Any delay in this regard shall have to
be accompanied with justification by the concerned officer in writing.
1.7 The provisional registration (EM-I) for new units shall be valid for a
maximum period of three (03) years.
1.8 In case of the units provisionally registered before issuance of
Industrial Policy 2016, which have not been allotted land due to it‟s
non-availability in a particular industrial estate, the maximum period
of validity shall also be a total of three (03) years and shall be
counted from the original date of registration after which their
provisional registration shall be deemed to have lapsed and such
units shall be struck off from the queue for land allotment. All such
entrepreneurs will have to apply afresh for provisional registration.
1.9 Incomplete applications shall be rejected and the applicants shall be
informed about the reasons for rejection.
2.0 Single Window Clearance (SWC):-
2.1 All units, as per cut-off value of investment in Plant and Machinery,
mentioned in below para 2.1.1 to 2.1.3, shall be appraised and
approved by the mentioned Single Window Clearance Committee
(SWCC)/APCC, which shall approve the project after due diligence and
decide the quantum of land to be allotted. The concerned
SWCC/APCC shall also give in-principle approval to the Power
Connection as well as the Consent-to-Establish which shall be subject
to the provisions contained in para 4.2.1 of the Industrial Policy, 2016.
The composition of these Single Window Clearance Committees/APCC
shall be as follows:
2.1.1 Units with investment of more than Rs. 25 crore in Plant and
Machinery shall be approved by the Apex Project Clearance
Committee (APCC) having following composition:
Officer to be part of the Designation
S.No. Committee
1. Chief Secretary, Jammu & Kashmir Chairman
2. Administrative Secretary, Industries & Member
Commerce
3. Administrative Secretary, PDD Member
4. Administrative Secretary, Forest Member
5. Administrative Secretary, H&UDD Member
6. Chairman J&K, SPCB Member
7. Director, Industries & Commerce, concerned Member
8. Managing Director, JKDFC Member
9. Managing Director, J&K, SIDCO Convener
10. Representative of Industrial Association Member
concerned
2.1.2 For units with investment of more than Rs. 05 crore and up to Rs. 25
crore in Plant and Machinery, the composition of the SWCC shall be as
under:
Officer to be part of the SWCC Designation
S.No.
1. Director, Industries & Commerce, concerned Chairman
2. Superintending Engineer, PDD of the district Member
concerned
3. Representative of the SPCB Member
4. Managing Director, SIDCO Member
5. Managing Director, SICOP Member
6. Representative of the Industrial Association Member
concerned
7. General Manager, of the DIC concerned Member-Secy.
2.1.3 For the approval of units with investment in Plant and Machinery upto
Rs. 05 crore, composition of the SWCC shall be as under:
S.No. Officer to be the member of the SWCC Designation
1. General Manager, DIC concerned Chairman
2. Executive Engineer/AEE, PDD concerned Member
3. District Representative of the SPCB Member
4. Estate Manager, SIDCO/SICOP Member
as the case may be
2.1.4 These SWCCs shall meet at least once in a month and the APCC shall
meet when such projects are referred to it by SIDCO.
3.0 Land Allotment Order:-
3.1 The J&K, SIDCO and SICOP, as the case may be, shall notify new
Industrial Estates by publishing in newspapers and also through their
respective websites.
3.2 An officer notified by the concerned corporation, SIDCO / SICOP, shall
issue the final allotment order within the seven (07) days of approval
by the Single Window Clearance Committee.
3.3 The land allotment order shall mention all terms and conditions
including compliance with respect to effective steps and the timelines
for coming into production as per these guidelines.
3.4 The allottee shall be given two (02) months time to deposit the entire
premium amount.
4.0 Execution of lease deed and physical possession:-
4.1 A lease deed in the prescribed uniform-lease-deed format shall be
executed by the allottee and SIDCO/SICOP, as the case may be, within
60 days from the date of issuance of allotment order. A final notice of
15 days shall be issued to the allottee immediately after expiry of 60
days from the date of issuance of allotment order. In case of non-
payment of premium and/or non-execution of lease deed even after
the expiry of notice period the land allotment shall be cancelled by the
Managing Director, SIDCO/SICOP.
4.2 Physical possession of the land shall be given only after receipt of total
premium cost and execution of lease deed.
4.3 The premium shall be charged at the rate prevalent on the date of
issuing of final allotment order.
4.4 The concerned Estate Manager shall cause actual plot to be measured
immediately as per the area approved by the SWCC/ APCC and mark
the boundary of the plot as per the site plan. The possession certificate
in the prescribed format duly mentioning the plot number, exact
area/khasra number(s)/coordinates etc. shall be signed by the allottee
and the Estate Manager.
5.0 Earmarking:-
5.1 The Industrial plots shall be allotted by the Single Window Clearance
Committee(s). However, no land shall be kept reserved through
earmarking. All pending cases where land could not be allotted after
earmarking in a particular Industrial Estate and six months have
elapsed, the earmarking shall be deemed to have been lapsed and
such plots shall be allotted as per these guidelines.
6.0 Premium and Rent of leased land:-

6.1 The premium of land allotted on lease to the entrepreneurs shall be
as notified by the Government from time to time and the rent of the
Industrial plots within Industrial Estates shall be decided by the
concerned Corporations through their Board of Directors.
6.2 In case of land allotted on lease to the entrepreneurs outside the
Industrial Estates, which are acquired by the
Government/SIDCO/SICOP for the specific purpose of industrial
development, shall be allotted at a premium arrived at by acquisition
cost plus 10% administrative cost plus development cost (if any).
However, in case of undeveloped land, the entrepreneur may also
have the option of paying half the premium rate which the
Government may fix for such area. The premium rate notified for
such undeveloped land shall, however, be in consonance with the
premium rate of plots in Industrial Estates located in the vicinity of
such undeveloped land and shall be decided by the Board of
Directors of SIDCO/SICOP.
7.0 Reservation of plots in Industrial Estates:-
7.1 In new Industrial Estates developed by SIDCO/SICOP, having more
than 1500 kanals of area, the land/plots shall be reserved to the
extent shown in favour of the below mentioned categories:
a. Women Entrepreneurs/Start-ups - 10%
b. Micro and Small Enterprises/Start-ups - 10%
Explanation:
(i) Only those enterprises shall be recognized as Start-ups which have
been declared as such by the Ministry of MSME, Government of
India or under any Scheme of State Government.
(ii) ‟Micro‟ and „Small‟ enterprises (both manufacturing and services
sector) shall be as defined by MSME Government of India from
time to time and at present, as per the MSMED Act 2006, these
are as under:
Manufacturing Sector
Enterprises Investment in plant & machinery
Micro Enterprises Does not exceed twenty five lakh rupees
Small Enterprises More than twenty five lakh but does not exceed five crore rupees
Service Sector
Enterprises Investment in plant & machinery
Micro Enterprises Does not exceed ten lakh rupees
Small Enterprises More than ten lakh but does not exceed two crore rupees
(iii) Wherever the term „SSI Unit(s)‟ appears it would mean „Micro‟
and „Small‟ Enterprises as defined by Government of India from
time to time.
(iv) Except 7.1 (a) and (b) above, others shall be General category.
7.2 In case of applications received for land allotment in the Industrial
Estates under the above mentioned reserved category of women
entrepreneurs, the sole proprietor of proposed unit should be a
woman, and in case of partnership firm or company, the women
partners/directors should not be less than fifty percent and should
hold at least fifty percent of the equity in the enterprise.
7.3 The woman entrepreneurs who are allotted land in reserved category
shall be allowed to transfer their unit, after coming into production,
only to a woman entrepreneur. The constitution of such units shall
not be allowed to be changed in a manner that the unit does not
remain in the category in which it has been allotted land after such
change in constitution.
7.4 In the existing Industrial Estates as well as the new smaller Industrial
Estates with area less than 1500 Kanals, the land shall be allotted on
first-come-first-serve basis except to the projects having more than
Rs. 50 crore investment in Plant & Machinery which shall be allotted
land out of turn.
7.5 The Apex Project Clearance Committee (APCC) shall be empowered
to allot land out of turn to any unit, irrespective of its category, if the
unit has very high employment potential or if it proposes a state-of-
art-technology project which has global market or if the Committee
feels that it is expedient to do so for the rapid industrial development
of the State.
7.6 For the reserved categories mentioned at 7.1 (a) & (b), land shall be
reserved only for two years from the date of first allotment after
which the land shall be allotted on first-come-first-serve basis to all
categories subject to the provision mentioned in para 7.4 & 7.5
above.
7.7 Subject to viability of the project the applications shall be segregated
into following categories:
i. Projects having investment of more than Rs.50 crore in Plant
and Machinery
ii. Start-ups
iii. Women entrepreneurs
iv. Micro and Small Enterprises
v. General
7.8 Separate queues shall be made for separate categories. The priority
to the categories shall be accorded in the order in which they appear
in 7.7 above.
7.9 The above priority / categories will not apply in case of the industrial
plots where allotment is made through auction as detailed in the
Industrial Policy.
7.10 An applicant can apply in any one or more categories for which
he/she is eligible, separately. However, the benefit of reservation
shall be given in only one category.
8.0 Pollution Clearance:-
8.1 The Consent to Establish/Consent to Operate is provided under the
Unified Consent Mechanism of the J&K State Pollution Control Board
(JKSPCB) which is in the process of establishing an online system for
submission of applications to obtain Consent to Establish and Consent
to Operate. Till the online system is put in place, the entrepreneur
shall submit application in the prescribed form (Schedule-I) to the
concerned District Officer of the JKSPCB. The District Officer of the
JKSPCB shall submit the inspection report expeditiously to the
Regional Director, JKSPCB, who will submit the application along with
the inspection report with comments to the Secretary, JKSPCB within
seven (07) working days.
8.2 Issuance of NOC by SPCB for establishing Industry/Project under
Orange, Red and Green categories shall be as per the timelines
prescribed under J&K Public Services Guarantee Act, 2011.
8.3 The White Category Industries are not required to obtain Consent to
Establish. However, the White Category units need to inform the J&K
State Pollution Control Board regarding the location and setting up of
the industry.
8.4 The validity of Consent to Establish shall coincide with the validity
period of Provisional Registration.
8.5 Validity period of Consent to Operate (CTO) for different categories of
enterprises shall be as decided by the J&K, SPCB from time to time.
Presently validity period of CTO for Green/Orange/Red categories of
Units shall be as per J&K, State Pollution Control Board‟s Order No.
60 SPCB of 2016, dated 29.01.2016 (Annexure-I), which is as
under:
a. Green category - 8 years
b. Orange category - 5 years
c. Red category - 3 years
8.6 The mandatory requirement of online pollution control devices for
State incentives shall be applicable only in case of those enterprises
which have been notified by the J&K State Pollution Control Board /
Central Pollution Control Board for mandatory installation of online
pollution control devices.
9.0 Effective Steps:-
9.1 Availability of land at reasonable/subsidized rates being the most
important factor in the establishment of industry, the State
Government will endeavor, on the one hand to arrange and ensure
availability of land to the entrepreneurs at reasonable/subsidized
rates, on the other hand it will be ensured that the land provided by
the Government is put to industrial use within the shortest possible
time of it‟s allotment and that such industrial land does not remain
vacant or unutilized for a long time. Industrial Policy 2016, therefore,
stresses upon the entrepreneurs to start taking effective steps
immediately after the allotment of land. The stipulated period within
which effective steps are required to be taken shall be two years,
which will start from the date of Building Plan approval which, in
turn, should necessarily be obtained within seventy five (75) days of
land allotment order. In case the Building Plan approval is not
obtained within 75 days, the timeline for taking effective steps shall
be reckoned from the date of allotment of the land.
9.2 In case effective steps are not taken by the entrepreneur within two
years, the land shall be retrieved and allotted to other
entrepreneur(s) as per the guidelines. The premium and/or rent paid
by the entrepreneur in such cases shall be forfeited The allotted plot
in this case shall be retrieved irrespective of the fact whether the
provisional registration is valid. For the purpose of retrieval, the
validity of provisional registration shall be inconsequential and only
the timeline of two years for taking effective steps shall be the
deciding factor for retrieval of land.
9.3 The maximum period for coming into production shall also be two
years from the date of Building Plan approval which should
necessarily be obtained within seventy five (75) days of the land
allotment order. And, in case the Building Plan approval is not
obtained within 75 days, the timeline for coming into production shall
also be reckoned from the date of allotment of land. Therefore, the
entrepreneur will have to plan effective steps in a manner that the
proposed unit comes into production within two years of Building
Plan approval/ allotment of land and the progress of implementation
shall be constantly monitored.
9.4 In case of those entrepreneurs who have already taken effective
steps within two years of allotment, before as well as after the
notification of Industrial Policy 2016, but could not come into
production for any unforeseen reasons, may be considered by the
Committee constituted under para (4.2.8) of the IP, 2016 for
extension of time period for coming into production on case-to-case
basis. However, timeline for coming into production shall not be
extended for more than six (06) months except in some exceptional
cases where further extension of two (02) additional months may be
granted. For granting extension in timeline, the Committee however
would be required to record the reasons of justification in writing in
each case. Beyond the extension of additional eight (08) months,
further grant of extension can be done in exceptional circumstances
by the APCC on case-to-case basis.
9.5 The provisional registration of those enterprises which have not taken
any effective steps within the prescribed period of two years shall be
cancelled and the land shall be retrieved. However, in case the delay
is due to any reason beyond the control of the entrepreneur, he/she
may prefer an appeal before the Apex Project Clearance Committee
through Director, Industries & Commerce which shall take a decision
in the matter.
9.6 The „effective steps‟ shall mean as explained in the Industrial Policy,
2016.
10.0 Change of location of allotted land:-
10.1 The applicant may seek change of location of plot before or after
allotment only as per below mentioned procedure and provisions.
10.2 The applicant shall file an application before the Managing Director of
the concerned Corporation for change of location of the allotted
land/plot which shall be subject to the availability of the plot and also
to the compatibility of the industries in the chosen new Industrial
Estate/site. In case of higher premium of the changed plot, the
difference shall have to be deposited by the applicant within the
specified time. However, if the premium of the land at the new
chosen site is lower, the difference shall be adjusted in the annual
lease rent.
10.3 In case two entrepreneurs want to exchange vacant plots, the same
shall be allowed after obtaining the prevailing transfer fee. However,
the compatibility of the industries in the new locations shall be kept
in mind while allowing such transfers.
10.4 The transfer of vacant plot to the legal heirs would be allowed. The
transfer of vacant land to the legal heirs shall also be allowed in case
of death of the original allottee. No transfer fee shall be charged for
such transfers.
10.5 There shall be no restriction on „Transfer of Ownership‟ and/or
„Change of Constitution‟ in private lands subject to issuance of
Consent to Establish by the JKSPCB and Power Availability Certificate
by the PDD in favour of the new enterprise which may come up due
to such transfer of ownership or change in constitution. However, the
provisions of special status of J&K, the compatibility of the industry in
the chosen locations and/or Master Plan provisions in such area shall
also be kept in mind while allowing such transfers or change of
constitution on private lands.
10.6 In all cases of transfer, the date of first allotment shall be considered
for the reckoning of the stipulated two years for taking effective
steps and coming into production. In case, the unit does not come
into production within two years, the land shall be retrieved. All other
guidelines mentioned herein or in the Industrial Policy, 2016 shall
apply.
11.0 Allotment of premises to the public/utility agencies:-
11.1 J&K, SIDCO/SICOP may consider allotment of land in the Industrial
Estates for public/utility agencies such as Fire Station, Police Station,
Government / ESI Dispensaries, Power Development Department,
Public Health Engineering Department (PHE/I&FC), Scheduled Banks
etc. at the premium and rent rates fixed by the respective Board of
Directors. Land may also be allotted for weigh bridges, warehouses
etc. which are compatible with industrial usage. The Board of
Directors may waive off/ reduce the premium or rent rates for such
public utility agency, if needed.
11.2 The land for other commercial utilities such as petrol pumps,
restaurants etc. required in the industrial estates shall be allotted
only through auction of suitable patches identified by the concerned
Corporation.
12.0 Monitoring of project implementation:-
12.1 The Managing Director, SIDCO/SICOP shall constitute a Monitoring
Cell, which will include suitable officer(s) from the concerned DIC as
its member, to regularly monitor and update the status of
implementation of the project(s).
12.2 The entrepreneur shall take necessary steps for implementation of
project and file documents in evidence of such implementation like
approval of building plan, power connection, consent to establish
from the J&K State Pollution Control Board, sanction of term loan etc.
to the said Monitoring Cell on regular basis.
12.3 The Monitoring Cell shall visit the premises at least once in a month
to physically verify the progress of implementation of each project
and in case the entrepreneur does not seem to take necessary steps
for implementation of the project the Monitoring Cell shall be
responsible for immediate reporting the matter to the Managing
Director of SIDCO/SICOP as the case may be.
12.4 The Managing Director, SIDCO / SICOP, shall quarterly review the
progress of project implementation in each case and if required
facilitate the entrepreneurs in obtaining necessary
sanctions/approvals from different government agencies. The
concerned Director of Industries & Commerce shall also review the
implementation of projects from time to time and ensure that all the
entrepreneurs are given requisite help for obtaining necessary
sanctions/ approvals. In case of some major impediments, the matter
should immediately be brought to the notice of Administrative
Secretary, Industries & Commerce Department.
12.5 The allottee will be under obligation to submit quarterly reports to
the Monitoring Cell about the progress of implementation.
13.0 Cancellation of lease deed and resumption of plot /
premises:-
13.1 In case of failure on the part of allottee to make total payment
towards premium within stipulated time from the date of allotment
letter, violation of any condition of the lease deed, failure to take
effective steps within the stipulated time, failure to come into
production within stipulated time, failure to adhere to any other
condition(s) stipulated in the Industrial Policy and/or these
guidelines, the concerned Estates Officer notified under the Jammu &
Kashmir Public Premises (Eviction of Unauthorized Occupants) Act,
1988 shall immediately take necessary action for determination of the
lease deed and eviction of the allottee under the said Act and rules
made there under.
14.0 Change of Constitution:-
14.1 Proposals for Change in Constitution before/during project
implementation shall be as under:
14.1.1 Change in Constitution among the family members or in favour of the
legal heirs due to death of allottee(s)/partner(s)/shareholders and
without addition of any outside member as partner/ shareholder.
14.1.2 Proprietary firm becoming partnership firm where the proprietor of
the original firm holds not less than 51% or more shares in profit and
loss and capital investment within the same legal entity.
14.1.3 Partnership firm becoming proprietary firm with exit of all but one
partner within the same legal entity.
14.1.4 Where proprietary concern or partnership concern converts into a
private limited company or public limited company and the original
proprietor/partners together hold not less than 51% of the
authorized share capital of the same legal entity.
14.1.5 Changes within the partnership firm where the original partners
together hold not less than 51% in the share of profit and loss and
the capital investment in the original partnership firm and the
reconstituted partnership firm without change of name of the firm.
14.1.6 In respect of Private Limited/Public Limited firm, where there are
changes in share holding and the original share holders continue to
maintain their holding of 51% or more in the same legal entity.
14.1.7 In cases, where NOC was given by SIDCO/SICOP/DIC to the J&KSFC/
Scheduled Banks/Public Financial Institutions for creating equitable
mortgage on the allotted premises, and the terms of NOC were
complied with and the unit is transferred by these institutions for
recovery of the loan or otherwise.
14.2 Change in Constitution however shall be subject to completion of
following formalities and processes:
14.2.1 Furnishing of documents viz. Partnership Deed/Dissolution
Deed/Retirement Deed duly registered in the Court of Law/Form-14
in case of Companies/Resolution by Board of Directors/Firm
Registration Certificate/ Incorporation of the Company from Registrar
of Companies/Articles of Association/ Memorandum of Association/
Entrepreneur‟s Memorandum/ Profit & Loss Account Statements/
Balance Sheet/ Share Capital structure duly certified by practicing
Chartered Accountant etc. as may be applicable.
14.2.2 Public Notice in leading dailies inviting objections for Change of
Constitution.
14.2.3 NOC/NDC from the concerned Bank/ Financial Institution/ Sales
Tax/Excise/PDD/SPCB/DIC wherever required.
14.2.4 An undertaking (attested by Judicial Magistrate) stating that any
liability arising due to Change of Constitution shall be borne by the
Proprietor/ Partners/ Company.
14.2.5 An affidavit duly executed in the Court of Law to the effect that the
land is free from all encumbrances.
14.2.6 Clearance of all dues whatsoever.
14.2.7 Execution of supplementary/ fresh lease deed.
14.2.8 Any other formality as may be deemed appropriate by the Managing
Director SIDCO/ SICOP.
14.2.9 For Change in Constitution, where transfer of unit is within the
family/legal heirs and without addition of any outside member as
partner/share holder, 5% of the prevalent premium amount shall be
charged for such transfers.
14.2.10Proprietary firm becoming partnership firm where the proprietor of
the original firm holds not less than 51% or more share in Profit and
Loss and Capital Investment within the same legal entity, 5% of the
prevalent premium amount shall be charged for such transfers.
14.2.11Where proprietary concern or partnership concern converts into a
Private Limited Company or Public Limited Company and the original
proprietor/partners together hold not less than 51% of the
authorized share capital of the same legal entity, 5% of the prevalent
premium amount shall be charged for such transfers.
14.2.12 In case of retirement of the original promoter(s)/ share holder(s)/
Director(s) where only 5% has been charged while inducting
partner(s)/share holder(s)/Director(s), as per clause 14.2.10 and
14.2.11, 50% of the prevalent premium amount shall be charged for
such transfers.
14.2.13 In case of retirement of any of the partner(s)/ share holder(s)/
Director(s), except original promoter/ share holder(s)/ Directors, as
per clause 14.2.10 and 14.2.11, no premium shall be charged.
14.2.14 In case of dispute between the partners/ promoters in a company,
the division of plot shall be permissible, subject to payment of 5% of
the prevalent premium for such transfer. However, such division shall
be subject to justifying the requirement of the extent of premises
already allotted for undertaking new activities.
14.2.15 In case of merger/ amalgamation of two or more units with same
constitution, 5% of the prevalent premium for such transfer shall be
charged. However, in case Change of Constitution takes place by
virtue of such merger/ amalgamation, 50 % of prevalent premium for
such transfer shall be charged.
14.3 With Change in Constitution, lease hold rights should not change,
meaning thereby that the original allottee(s) should retain a minimum
of 51% or more shares in Profit and Loss and Capital Investment/
Authorized Share Capital, otherwise provisions of transfer of
ownership/lease hold rights will be applicable.
14.4 If it is observed that the change of lease hold rights is made through
a Change in Constitution before the unit comes into production, such
a transfer will be considered void and land shall be resumed after
cancellation of allotment.
14.5 Breathing Period:
14.5.1 The applications for Change of Constitution/Name and Style/Line of
Activity/Additional Line of Activity, and Transfer of lease hold rights/
Amalgamation etc. received prior to the announcement of Industrial
Policy 2016 i.e. 15-03-2016 by the DICs/Directorates of Industries
and Commerce, and found eligible but which could not be decided,
shall be disposed off as per the provisions of Industrial Policy 2004,
within a period of sixty days from the date of issuance of these
guidelines. This however, shall be a one-time exception for all such
cases.
14.5.2 Breathing period shall also be applicable to such cases of Change in
Constitution/Lease hold rights (Outright Sale) if have been effected in
any Court of Law before issuance of Industrial Policy 2016 but the
concerned parties could not approach SIDCO/SICOP/DIC for seeking
permission for recording such changes. Such cases shall also be
disposed off as per the Industrial Policy, 2004 subject to the following
conditions:
(i) That the concerned parties approach SIDCO/SICOP/DIC within a
period of sixty days from the date of issuance of these guidelines.
(ii) Transfer Charges shall be payable as per the rates prescribed in
these guidelines.
15.0 Transfer of lease hold rights:-
15.1 Transfer of lease hold rights in the Industrial Estates managed by
SIDCO/SICOP shall be permitted by the concerned Managing Director
only after the unit comes into production and subject to fulfillment of
following conditions/formalities/processes:
15.1.1 Furnishing of documents viz. Partnership Deed/Dissolution
Deed/Retirement Deed duly registered in the Court of Law or any
other relevant deed and /or Form-14/Resolution of Board of
Directors/Firm Registration Certificate/ Incorporation Certificate by
the Registrar of Companies/Articles of Association/ Memorandum of
Association/Entrepreneur‟s Memorandum/Profit & Loss Account
Statements/Balance Sheets/Share Capital structure duly certified by
Chartered Accountant etc, as may be applicable.
15.1.2 Public Notice in leading dailies inviting objections.
15.1.3 NOC/NDC from the concerned Bank/Financial Institution/Sales
Tax/Excise/ PDD/PCB/DIC wherever required.
15.1.4 An undertaking by the incoming Promoter (attested by Judicial
Magistrate) stating therein that liability if any arising due to transfer
of lease hold rights (Outright-sale) shall be borne by the
Proprietor/Partners/Company.
15.1.5 An affidavit by the outgoing Promoter duly executed in the Court of
Law to the effect that the land is free from all encumbrances.
15.1.6 Clearances of all estates dues if any.
15.1.7 Execution of surrender deed before execution of fresh lease deed.
15.1.8 Furnishing of transfer/Sale/release/relinquishment deed.
15.1.9 De-registration of the outgoing unit by the concerned Director,
Industries & Commerce in case the incoming promoter desires to
establish an Enterprise with different Line of Activity/Name and Style.
15.1.10 Execution of fresh lease deed.
15.1.11 Any other formality as may be deemed appropriate by the Managing
Director, SIDCO/SICOP.
15.1.12 Payment of transfer fees @ 50% of the prevalent land premium. In
case of transfer of lease hold rights/Outright sale by way of public
auction, transfer fee @ 50% of the prevalent land premium
applicable on the date of issuance of transfer order/permission by the
concerned Corporation shall be payable.
16.0 Change in Name and Style/Line of Activity:-
16.1 The request of the allottee(s) for change in Name and Style of the
unit shall be allowed by the General Manager, DIC in case of MSMEs
and by the concerned Director, Industries & Commerce subject to
fulfillment of following conditions/formalities/processes:
16.1.1 Furnishing of documents viz. Supplementary Deed to the Partnership
Deed registered in the Court of Law wherever applicable/Form-14,
Resolution of Board of Directors, Firm Registration Certificate,
Change/Amendments in Articles of Association, Memorandum of
Association of the Company regarding the change in Name and Style.
16.1.2 Public Notice in leading dailies inviting objections.
Tax/Excise/ PDD/PCB/DIC/SIDCO/SICOP wherever required.
16.1.4 An undertaking by the Promoter (attested by Judicial Magistrate)
stating therein that liability/outstanding if any against erstwhile Name
and Style shall be borne by the Proprietor/Partners/Company with
changed Name and Style.
16.1.5 An affidavit by the Promoter duly executed in the Court of Law to the
effect that the land is free from all encumbrances.
16.1.6 Clearances of all outstanding estates dues, if any.
16.1.7 Execution of supplementary/Fresh lease deed as may be applicable.
16.1.8 Payment of 5% of prevalent land premium to the concerned
Corporation.
16.1.9 Any other formality as may be deemed appropriate by the General
Manager DIC/concerned Director, Industries & Commerce as the case
may be.
16.2 The request for change in the Line of Activity or Additional Line of
Activity shall be considered by the respective Committees mentioned
in para 2.1.1 to 2.1.3 as per the cut-off value of proposed investment
in Plant & Machinery which shall be subject to fulfillment of following
conditions/formalities:
16.2.1 Justification by the applicant for Change in Line of Activity/Additional
Line of Activity viz-a-viz the quantum of land already allotted.
16.2.2 That such changes in Line of Activity/Additional Line of Activity are
compatible to the nature of Industrial Estate and shall not be
detrimental to the other neighboring allottees/units.
16.2.3 Furnishing of documents viz. Detailed Project Report, Supplementary
Deed to the Partnership Deed registered in the Court of Law
wherever applicable /Form-14, Resolution of Board of Directors, Firm
Registration Certificate, Change/Amendments in Articles of
Association, Memorandum of Association of the Company regarding
the change in Line of Activity/Additional Line of Activity.
16.2.4 Consent to Establish and Power Availability Certificate from PCB and
PDD respectively.
Corporation.
Manager DIC/concerned Director, Industries & Commerce/Managing
Director, SIDCO as the case may be.
16.3 In cases where change in Line of Activity is requested in case of new
units, the maximum period for coming into production shall be
reckoned from the original date of final allotment letter.
17.0 Substantial Expansion/New unit:-
17.1 The request for substantial expansion/new unit on the land already
allotted shall be considered only in case of units which have already
come into production and shall be permitted by the respective
Committees mentioned in para 2.1.1 to 2.1.3 as per the cut off value
of proposed investment in Plant & Machinery which shall be subject
to fulfillment of following conditions/ formalities:
17.1.1 Furnishing of Detailed Project Report (DPR) in case of Substantial
Expansion and DPR alongwith Resolution of Board of Directors,
Memorandum of Association of the Company needs to be furnished in
case of the New Units proposed to be established on already allotted
premises of the functional unit.
17.1.2 Consent to Establish and Power Availability Certificate from PCB and
PDD respectively.
Corporation.
Manager DIC/concerned Director, Industries & Commerce/Managing
Director, SIDCO as the case may be.
17.1.8 It shall also be subject to the fulfillment of building norms and
Environmental stipulations and provided that such changes/expansion
are compatible to the nature of the Industrial Estate and are not
detrimental to other neighbouring allottees/ units.
17.2 In case of land retrieved after cancellation from a unit, which is
adjacent to an existing functional unit, the owner of the adjacent
functional unit shall be afforded first opportunity for allotment of the
retrieved land. Such opportunity will however be afforded for a
genuine substantial expansion plan/project required to be submitted
by such functional unit and duly approved by the Competent
Authority. The response to avail such opportunity, by coming forth
with the approved substantial expansion plan or new project should
be submitted within one month of receipt of the notice offering such
opportunity to the adjacent functional unit. The time limit of taking
effective steps and coming into production shall also apply in this
case.
18.0 Retrieval of land from the Sick Industrial Units:-
18.1 There is already a policy framework announced by the State
Government for revival of the sick industrial units. The Ministry of
Micro, Small and Medium Enterprises has also notified a framework
for revival and rehabilitation of Micro, Small and Medium Enterprises.
The State Government shall endeavor to take all possible steps for
revival of the sick industrial units in the State as per the
aforementioned notifications.
18.2 Once all the steps have been exhausted for revival and rehabilitation
of a sick industrial unit, the Government shall provide an exit route to
the sick unit by allowing transfer of its ownership/lease hold rights to
another entrepreneur provided all the liabilities are cleared.
18.3 In cases where the land / unit have been mortgaged to a financial
institution / bank, the SIDCO / SICOP, as the case may be, shall
facilitate settlement of the loans etc. and facilitate auctioning of these
units by the concerned financial institution / bank in case no other
way is found out. Land from such sick industrial units shall be
retrieved only in cases when all the aforementioned steps have been
taken and exhausted without any result.
19.0 Rehabilitation of Sick Units:-
19.1 The guidelines for rehabilitation/ revival of Micro, Small and Medium
enterprises (MSME) notified by the Ministry of MSME vide notification
NO.S.O.1432(E) Dated 29/5/2015 (Annexure-III of IP, 2016)
addresses the problem of early detection of distress and
rehabilitation/ exit of MSME in a more structured and transparent
manner. These guidelines along with Framework for Revival and
Rehabilitation of Micro, Small and Medium Enterprises (MSMEs)
issued by the Reserve Bank of India in consultation with the Ministry
of MSME vide RBI/2015-16/338  FIDD.MSME &
NFS.BC.No.21/06.02.31/2015-16 dated 17.03.2016 (Annexure-II)
shall be applicable.
19.2 The State Level Revival Committee (SLRC) shall henceforth deal with
only such cases which are referred to it by the concerned banks
through the Directorate of Industries and Commerce.
19.3 The entrepreneur shall approach the concerned bank/ banks that
shall deal with the cases in terms of the framework recommended
under the above notification of the Ministry of MSME, GOI and as per
the guidelines thereof.
19.4 The Bank(s) shall refer the case(s) to the concerned General
Manager for identification of the unit as sick, subject to the condition
that the bank is satisfied that the unit holder through the State Level
Revival Committee (SLRC) requires the additional financial assistance.
19.5 The concerned General Manager shall deal with the case as per the
provisions of Govt. Order No: 47 IND-1999, dated 10/02/1999 in
respect of the units where total assistance requirement does not
exceed Rs. 5.00 Lac. These cases shall be placed before District Level
Revival Committee (DLRC) for declaring the unit as sick.
19.6 In case of the units where the financial assistance requirement
exceeds Rs. 5.00 Lac, the same shall be recommended to the
concerned Directorate of Industries & Commerce for declaring the
unit as sick and subsequent placement of such case(s) before State
Level Revival Committee (SLRC) for approval of requisite funds in
each case.
19.7 The Director of Industries and Commerce shall there after forward
the case(s) to SIDCO/SICOP.
20.0 Guidelines related to Incentives under State Package:
Enclosed as Annexure- III.
21.0 Price /Purchase Preference:-
21.1 The local SSI/MSME Units will be entitled to price preference upto
15% as envisaged in the Industrial Policy, 2004 issued vide
Government Order No. 21-Ind. of 2004 dated 27.01.2004 in
reference to Cabinet decision No. 19/1 dated 23.01.2004.
22.0 Self-Undertaking Mechanism for NOCs:-
22.1 While processing cases for establishment of Industrial/Business Units,
DICs/ SIDCO/SICOP shall not obtain NOCs/Permissions on behalf of
various other Government Departments/Agencies except for State
Pollution Control Board (SPCB), Power Development Department
(PDD), Excise and Commercial Taxes Department.
22.2 The NOCs/Permissions from the SPCB and the PDD shall be subject
to the timelines prescribed in Section 4.2.1 (f) and (g) of the
Industrial Policy 2016.
22.3 While processing the cases for establishing of Industrial/Business
Units, DICs/SIDCO/SICOP, instead of obtaining NOCs in respect of
other Government Departments/Agencies as mentioned above in
para 22.1, shall take an undertaking from the prospective
promoter/entrepreneur on an affidavit attested before Judicial
Magistrate as per Self-Undertaking form (Annexure-IV).
22.4 It shall be however optional for the promoter/entrepreneur to avail
the Self-Undertaking route to fast track the establishment of his/her
Industrial/ Business Unit.
23.0 Self Certification for Export, Import and Green Corridor:-
In addition to the Micro and Small Enterprises the benefit of Self
Certification in terms of Section 4.10 of Industrial Policy 2016 shall
also be available to the Medium and Large Scale Units.
24.0 Grievance Redressal:-
24.1 Appeal:
In case of grievance against any decision/order(s) of the Director
Industries and Commerce, Jammu/Kashmir, Managing Director, J&K
SIDCO/SICOP, the entrepreneur shall have an appeal to be filed
before the Administrative Department within thirty days from the
date of issuance of such order. The appeal so filed as far as possible
shall be decided within a period of thirty days of it‟s receipt.
24.2 Explanation of Provisions:
In case of any ambiguity vis-à-vis application/execution of the
provisions of the Industrial Policy, 2016 and/or the Procedural
Guidelines, the final decision will lie with the Administrative
Department and as far as possible the clarification in that regard,
whenever sought by any quarter/stakeholder, shall be provided
within 30 days. If need arises, the Administrative Department may
also further clarify, of it‟s own, various aspects of the Industrial
Policy, 2016 and the Procedural Guidelines by way of
Circulars/Executive Instructions/Orders etc.
25.0 Status of Subsidies/ Incentives after GST regime would be notified
separately.
Annexure-I
The Jammu and Kashmir State Pollution Control Board

Parivesh Bhavan, Transport Nagar, Narwal, Jammu, 180006
Subject: Revision of Consent validity period.
Reference: Decision taken on Agenda Item 28.06 in the 28th Meeting of the
rd
J&K State Pollution Control Board held on 3 February, 2016.
ORDER: 60 SPCB of 2016
Dated: 29.03.2016
Pursuant to the decision taken in 28th Meeting of J&K State Pollution Control
Board, and in supersession of previous orders on the subject, the period of
validity of consent issued under section 25/26 of the Water (Prevention and
Control of Pollution) Act, 1974 and/or section 21 of the Air (Prevention and
Control of Pollution) Act, 1981 shall be as follows with effect from 1st April
2016:
# Category Consent Validity period in years
Consent to Establish Consent to
Operate
1. Red Consent to establish will be issued for the 3
2. Orange maximum period for which DIC registration 5
3. Green is valid. However, unit holder may apply for 8
lesser period subject to minimum one year.
Provided that the occupier shall have to deposit the annual consent fees
for the entire period of three, five or eight years, as the case may be, while
applying for consent to operate otherwise the period of validity of the consent
shall be as worked out on the basis of fees deposited in multiples of one year.
-sd-
Abdul Razak (IFS)
Chairman
No: SPCB/Estt/CO/Consent/02/2016/243-55 Dated:
29.03.2016
Copy for information and n/action to the:
1. Commissioner/Secretary to Government, Industries & Commerce
Department, Civil Secretariat, Jammu.
2. Regional Directors, J&K SPCB, Kashmir/Jammu.
3. Environmental Engineer/Principal Scientific Officer/I/c Scientist C/AEE
Consent Section.
4. All District/Divisional Officers/Nodal Officers, J&K SPCB.
Annexure-II
भारतीय �रज़व बक
RESERVE BANK OF INDIA
www.rbi.org.in
RBI/2015-
16/338
FIDD.MSME&NFS.BC.No.21/06.02.31/2015-16 March
17, 2016
All Scheduled Commercial Banks

(Excluding
RRBs)
Madam / Sir,
Framework for Revival and Rehabilitation of Micro, Small and
Medium Enterprises (MSMEs)
In order to provide a simpler and faster mechanism to address the stress
in the accounts of MSMEs and to facilitate the promotion and
development of MSMEs, the Ministry of Micro, Small and Medium
Enterprises, Government of India, vide their Gazette Notification dated
May 29, 2015 had notified a „Framework for Revival and
Rehabilitation of Micro, Small and Medium Enterprises‟. However, certain
changes in the captioned framework have been carried out in
consultation with the Government of India, Ministry of MSME in order to
make it compatible with the existing regulatory guidelines on „Income
Recognition, Asset Classification and provisioning pertaining to
Advances‟ issued to banks by RBI. Accordingly, a revised Framework
along with operating instructions is furnished in the Annex. The Board
approved policy to operationalize the Framework may be put in place by
the banks not later than June 30, 2016.
2. While the prudential norms on Income Recognition, Asset
Classification and Provisioning pertaining to Advances will continue to
be as per the instructions consolidated in the Master Circular on IRAC
Norms dated July 1, 2015 and as updated from time to time, the revival
and rehabilitation of MSMEs having loan limits up to Rs.25 crore will be
in terms of these operating instructions. Restructuring of loan
accounts with exposure of above Rs.25 crore will continue to be
governed by the extant guidelines on Corporate Debt
Restructuring (CDR) / Joint Lenders‟ Forum (JLF) mechanism.
3.The revised Framework supersedes our earlier Guidelines on
Rehabilitation of Sick Micro and Small Enterprises issued vide our
circular RPCD. CO. MSME & NFS.BC.40/06.02.31/2012-2013 dated
November 1, 2012, except those relating to Reliefs and Concessions
for Rehabilitation of Potentially Viable Units and One Time Settlement,
mentioned in the said circular.
4. Banks should continue to report credit information and SMA

status of all accounts above the cut-off exposure of Rs.5 crore and
above to the Central Repository for Information on Large Credit
(CRILC), as per extant instructions.
5. Please acknowledge receipt and furnish Action Taken Report by July

31, 2016.
Yours faithfully
(Uma Shankar)
Chief General Manager
Encl: As above
Annex
Framework for Revival and Rehabilitation of Micro, Small

and Medium Enterprises
1.
Eligibility:
The provisions made in this framework shall be applicable to MSMEs
having loan limits up to Rs.25 crore, including accounts under
consortium or multiple banking arrangement (MBA).
2. Identification of incipient stress
2.1 Identification by banks or creditors – Before a loan account
of a Micro, Small and Medium Enterprise turns into a Non-Performing
Asset (NPA), banks or creditors should identify incipient stress in the
account by creating three sub-categories under the Special Mention
Account (SMA) category as given in the Table below:
SMA Sub-categories Basis for classification
SMA-0 Principal or interest payment not overdue for more
than 30 days but account showing signs of incipient
stress (Please see Annex - I)
SMA-1 Principal or interest payment overdue between 31-60
Days
SMA-2 Principal or interest payment overdue between 61-90
Days
On the basis of the above early warning signals, the branch maintaining
the account should consider forwarding the stressed accounts with
aggregate loan limits above Rs.10 lakh to the Committee as referred in
para 3.3 within five working days for a suitable corrective action plan
(CAP). Forwarding the account to the Committee for CAP will be
mandatory in cases of accounts reported as SMA-2.
2.2 As regards accounts with aggregate loan limits up to Rs.10 lakh

identified as SMA-2, the account should be mandatorily examined for
CAP by the branch itself under the authority of the branch manager
/ such other official (hereinafter referred to as „designated official‟)
as decided by the bank in terms of their Board approved policy. Other
terms and conditions, such as time limits, procedures to be
followed, etc., as applicable to the cases referred to the
Committee as referred in para 3.3, should be followed by the
branch manager / designated official. However, the cases, where
the branch manager / designated official has decided the option of
recovery under CAP instead of rectification or restructuring as
mentioned in para 5.3 (a) or (b), should be referred to the Committee
for their concurrence. Banks, with the approval of their Boards should
frame a suitable policy in this regard as given in para 3.4. The branch
manager / designated official should also examine the accounts reported
as SMA-0 and SMA-1, if it is deemed necessary.
2.3 Identification by the Borrower Enterprise - Any MSME

borrower may voluntarily initiate proceedings under this Framework, if
the enterprise reasonably apprehends failure of its business or its
inability or likely inability to pay debts or there is erosion in the net worth
due to accumulated losses to the extent of 50% of its net worth during
the previous accounting year, by making an application to the branch or
directly to the Committee as referred in para 3.3, wherever
applicable.. When such a request is received by lender, the account
with aggregate loan limits above Rs.10 lakh should be referred to the
Committee. The Committee should convene its meeting at the earliest
but not later than five working days from the receipt of the
application, to examine the account for a suitable CAP. The accounts with
aggregate loan limit up to Rs.10 lakh may be dealt with by the branch
manager / designated official for a suitable CAP.
3. Committees for Stressed Micro, Small and Medium Enterprises:

In order to enable faster resolution of stress in an MSME account, every
bank shall form Committees for Stressed Micro, Small and Medium
Enterprises as per the following arrangements:
3.1 All banks having exposure towards MSME sector shall constitute a
Committee at each District where they are present or at Division level or
Regional Office level, depending upon the number of MSME units
financed in the region. These Committees will be Standing Committees
and will resolve the reported stress of MSME accounts of the branches
falling under their jurisdiction.
3.2 For MSME borrowers having credit facilities under a consortium of
banks or multiple banking arrangement (MBA), the consortium leader, or
the bank having the largest exposure to the borrower under MBA, as the
case may be, shall refer the case to its Committee, if the account is
reported as stressed either by the borrower or any of the lenders under
this Framework. This Committee will also coordinate between the
different lenders.
3.3 The Composition of the Committee shall be as under:
(a) The regional or zonal head of the convener bank, shall be the
Chairperson of the Committee;
(b) Officer-in-charge of the Micro, Small and Medium Enterprises Credit
Department of the convener bank at the regional or zonal office level,
shall be the member and convener of the Committee;
(c) One independent external expert with expertise in Micro, Small and
Medium Enterprises related matters to be nominated by bank.
(d) One representative from the concerned State Government. Endeavour
should be made to bring representative from the respective State
Government in the Committee. In case State Government does not
nominate any member, then the convening bank should proceed to
include an independent expert in the Committee, namely a retired
executive of another bank of the rank of AGM and above.
(e) When handling accounts under consortium or MBA, senior
representatives of all banks / lenders having exposure to the borrower.
3.4 Banks, with the approval of their Boards, should frame a policy,
based on these instructions, on the composition of the Committee, the
terms of appointment of its members, the manner of filling vacancies,
and the procedure to be followed in the discharge of the Committee‟s
functions. While decisions of the Committee will be by simple majority,
the Chairperson shall have the casting vote, in case of a tie. In case of
accounts under consortium / MBA, lenders should sign an Inter-
Creditor Agreement (ICA) on the lines of Joint Lenders‟ Forum (JLF)
Agreement. Banks may put in place suitable arrangements, including
dedicated manpower, to ensure smooth functioning of the Committee and
adherence to the stipulated timelines.
3.5 All eligible stressed MSMEs shall have access to the Committee for
resolving the stress in these accounts in accordance with regulations
prescribed in this Framework.
3.6 Provided that where the Committee decides that recovery is to be
made as part of the CAP, the manner and method of recovery shall be in
accordance with the existing policies approved by the board of directors
of the bank which has extended credit facilities to the enterprise, subject
to any regulations prescribed by the Reserve Bank of India and extant
statutory requirements.
4. Application to the Committee for a Corrective Action Plan

4.1 Any lender on identifying an MSME account as SMA-2 or
suitable for consideration under the Framework or on receipt of an
application from the stressed enterprise, shall forward the cases having
aggregate loan limits above Rs.10 lakh to the Committee for immediate
convening of meeting and deciding on a CAP. Stressed enterprises having
aggregate loan limits above Rs.10 lakh can also directly file an
application for CAP to the Committee or to the largest lender for onward
submission under advice to all its lenders. The Indian Banks‟ Association
(IBA) may prescribe suitable application formats for aggregate loan limits
above Rs.10 lakh, for this purpose, which, inter-alia, should include the
following:
(a) Latest audited accounts of the Enterprise including its Net worth;
(b) Details of all liabilities of the enterprise, including the liabilities
owed to the State or Central Government and unsecured creditors,
if any;
(c) Nature of stress faced by the Enterprise; and
(d) Suggested remedial actions
The Indian Banks‟ Association (IBA) may also prescribe suitable formats
for aggregate loan limits up to Rs.10 lakh.
4.2 Where an application is filed by a bank / lender and admitted by the
Committee, the Committee shall notify the concerned enterprise about
such application within five working days and require the enterprise to:
(a) respond to the application or make a representation
before the Committee; and
(b) disclose the details of all its liabilities, including the liabilities owed
to the State or Central Government and unsecured creditors, if
any, within fifteen working days of receipt of such notice;
Provided that if the enterprise does not respond within the
above period, the Committee may proceed ex-parte.
4.3 On receipt of information relating to the liabilities of the
enterprise, the Committee may send notice to such statutory creditors as
disclosed by the enterprise as it may deem fit, informing them about the
application under the Framework and permit them to make a
representation regarding their claims before the Committee within
fifteen working days of receipt of such notice. It is mentioned here
that these information are required for determining the total liability of
the Enterprise in order to arrive at a suitable CAP and not for payments of
the same by the lenders.
4.4 Within 30 days of convening its first meeting for a specific
enterprise, the Committee shall take a decision on the option to be
adopted under the corrective action plan as given in subsequent
paragraphs and notify the enterprise about such a decision, within five
working days from the date of such decision.
4.5 If the corrective action plan decided by the Committee envisages
restructuring of the debt of the enterprise, the Committee shall conduct
the detailed Techno-Economic Viability (TEV) study (also refer para 5.1)
and finalise the terms of such a restructuring in accordance with the
extant prudential norms for restructuring, within 20 working days (for
accounts having aggregate exposure up to Rs.10 crore) and within 30
working days
(for accounts having aggregate exposure above Rs.10 crore and up to
Rs.25 crore) and notify the enterprise about such terms, within five
working days.
4.6 Upon finalization of the terms of the corrective action plan, the
implementation of that plan shall be completed by the concerned bank
within 30 days (if the CAP is Rectification) and within 90 days (if the CAP
is restructuring). In case recovery is considered as CAP, the recovery
measures should be initiated at the earliest.
4.7 Where an application has been admitted by the Committee in
respect of an MSME, the enterprise shall continue to perform contracts
essential to its survival but the Committee may impose such restrictions,
as it may deem fit, for future revival of the enterprise.
4.8 The Committee shall make suitable provisions for payment of tax or
any other statutory dues in the corrective action plan and the enterprise
shall take necessary steps to submit such plan to the concerned
taxation or statutory authority and obtain approval of such payment
plan.
5. Corrective Action Plan by the Committee

5.1 The Committee may explore various options to resolve the stress in
the account. The Committee shall not endeavour to encourage a
particular resolution option and may decide the CAP as per the
specific requirements and position of each case. While Techno-
Economic viability of each account is to be decided by the concerned
lender/s before considering restructuring as CAPs, for accounts with
aggregate exposure of Rs.10 crore and above, the Committee should
conduct a detailed Techno-Economic Viability study before finalising the
CAP.
5.2 During the period of operation of CAP, the enterprise shall be
allowed to avail both secured and unsecured credit for its business
operations as envisaged under the terms of CAP.
5.3 The options under CAP by the Committee may include:
(a) Rectification:– Obtaining a commitment, specifying actions and
timelines, from the borrower to regularize the account so that the
account comes out of Special Mention Account status or does not slip
into the Non-Performing Asset category and the commitment should be
supported with identifiable cash flows within the required time period and
without involving any loss or sacrifice on the part of the existing lenders.
The rectification process should primarily be borrower driven. However,
the Committee may also consider providing need based additional finance
to the borrower, if considered necessary, as part of the rectification
process. It should however be ensured that this need based additional
finance is intended only for meeting, in exceptional cases,
unavoidable increased working capital requirement. In all cases of
additional finance for working capital, any diversion of funds will render
the account as NPA. Further, such additional finance should ordinarily be
an ad-hoc facility to be repaid or regularized within a maximum period of
six months. Additional finance for any other purpose, as also any roll-
over of existing facilities, or funding not in compliance with the above
conditions, will tantamount to restructuring. Further, repeated
rectification with funding, within the space of one year, will be
treated as a restructuring and no additional finance should be
sanctioned under CAP, in cases where the account has been reported as
fraud by any lender.
(b) Restructuring:– Consider the possibility of restructuring the
account, if it is prima facie viable and the borrower is not a willful
defaulter, i.e., there is no diversion of funds, fraud or malfeasance, etc.
Commitment from promoters for extending their personal guarantee
along with their net worth statement supported by copies of legal titles to
assets may be obtained along with a declaration that they would not
undertake any transaction that would alienate assets without the
permission of the Committee. Any deviation from the commitment by the
borrowers affecting the security or recoverability of the loan may be
treated as a valid factor for initiating recovery process. The lenders in
the Committee may sign an Inter-Creditor Agreement and also require
the borrower to sign the Debtor-Creditor Agreement which would provide
the legal basis for any restructuring process. The IBA may prepare
formats for this purpose on the lines of formats used by the Corporate
Debt Restructuring mechanism for Inter-Creditor Agreement and Debtor-
Creditor Agreement. Further, a stand-still clause (as defined in extant
guidelines on Restructuring of Advances) may be stipulated in the
Debtor- Creditor Agreement to enable a smooth process of restructuring.
The stand-still clause does not mean that the borrower is precluded
from making payments to the lenders. The Inter-Creditor Agreement
may also stipulate that both secured and unsecured creditors need to
agree to the final resolution.
(c) Recovery:– Once the first two options at (a) and (b) above are
seen as not feasible, due recovery process may be resorted to. The
Committee may decide the best recovery process to be followed, among
the various legal and other recovery options available, with a view to
optimizing the efforts and results.
6. The decisions agreed upon by a majority of the creditors (75% by

value and 50% by number) in the Committee would be considered as the
basis for proceeding with the restructuring of the account, and will be
binding on all lenders under the terms of the Inter-Creditor Agreement.
If the Committee decides to proceed with recovery, the minimum criteria
for binding decision, if any, under any relevant laws or Acts shall be
applicable.
7. Time-lines
Detailed time-lines are given for carrying out various activities under the
Framework. If the Committee is not able to decide on CAP and
restructuring package due to non- availability of information on statutory
dues of the borrower, the Committee may take additional time not
exceeding 30 days for deciding CAP and preparing the restructuring
package. However, they should not wait beyond this period and proceed
with CAP.
8. Additional Finance
8.1 If the Committee decides that the enterprise requires financial
resources to restructure or revive, it may draw up a plan for provision of
such finance. Any additional finance should be matched by contribution
by the promoters in appropriate proportion, and this should not be less
than the proportion at the time of original sanction of loans. Additional
funding provided under restructuring / rectification as part of the CAP will
have priority in repayment over repayment of existing debts. Therefore,
installments of the additional funding which fall due for repayment
will have priority over the repayment obligations of the existing debt.
8.2 If the existing promoters are not in a position to bring in
additional funds the Committee may allow the enterprise to raise secured
or unsecured loans.
8.3 Provided further, that the Committee may, with the consent of all
creditors recognized, provide such loans higher priority than any existing
debt.
9. If the Committee decides on options of either „Rectification‟ or
„Restructuring‟, but the account fails to perform as per the agreed terms
under these options, the Committee shall initiate recovery under option
5.3(c).
10. Restructuring by the Committee
10.1 Eligibility
(a) Restructuring cases shall be taken up by the Committee only in
respect of assets reported as Standard, Special Mention Account or Sub-
Standard by one or more lenders of the Committee.
(b) However, the Committee may consider restructuring of the debt,
where the account is doubtful with one or two lender/s but it is
Standard or Sub-Standard in the books of majority of other lenders (by
value).
(c) Wilful defaulters shall not be eligible for restructuring. However, the
Committee may review the reasons for classification of the borrower as a
wilful defaulter and satisfy itself that the borrower is in a position to
rectify the wilful default. The decision to restructure such cases shall
have the approval of the Board of concerned bank within the
Committee who has classified the borrower as wilful defaulter.
(d) Cases of Frauds and Malfeasance remain ineligible for
restructuring. However, in cases of fraud / malfeasance where the
existing promoters are replaced by new promoters and the borrower
company is totally delinked from such erstwhile promoters/ management,
banks and the Committee may take a view on restructuring of
suchaccounts based on their viability, without prejudice to the
continuance of criminal action against the erstwhile promoters /
management. Further, such accounts may also be eligible for asset
classification benefits available on refinancing after change in
ownership, if such change in ownership is carried out under guidelines
contained in circular DBR.BP.BC.No.41/21.04.048/2015-16 dated
September 24, 2015 on “Prudential Norms on Change in Ownership of
Borrowing Entities (Outside Strategic Debt Restructuring Scheme)”. Each
bank may formulate its policy and requirements as approved by the
Board, on restructuring of such assets.
10.2. Viability
(a) The viability of the account shall be determined by the Committee
based on acceptable viability benchmarks determined by them.
(b) The parameters may, inter-alia, include the Debt Equity Ratio,
Debt Service Coverage Ratio, Liquidity or Current Ratio, etc.
10.3. Conditions relating to Restructuring under the Framework
(1) Under this Framework, the restructuring package shall stipulate
the timeline during which certain viability milestones such as
improvement in certain financial ratios after a period of 6 months may
be achieved.
(2) The Committee shall periodically review the account for
achievement / non- achievement of milestones and shall consider
initiating suitable measures including recovery measures as deemed
appropriate.
(3) Any restructuring under this Framework shall be completed within
the specified time periods.
(4) The Committee shall optimally utilize the specified time periods so
that the aggregate time limit is not breached under any mode of
restructuring.
(5) If the Committee takes a shorter time for an activity as against the
prescribed limit, then it can have the discretion to utilize the
saved time for other activities provided the aggregate time limit is not
breached.
(6) The general principle of restructuring shall be that the stakeholders
bear the first loss of the enterprise rather than the lenders. In the case
of a company, the Committee may consider the following options, when a
loan is restructured:
(a) Possibility of transferring equity of the company by promoters
to the lenders to compensate for their sacrifices;
(b) Promoters infusing more equity into their companies;
(c)Transfer of the promoters‟ holdings to a security trustee or an
escrow arrangement till turnaround of enterprise to enable a change
in management control, if lenders favour it.
(7) In case a borrower has undertaken diversification or expansion of
the activities which has resulted in the stress on the core-business of the
group, a clause for sale of non-core assets or other assets may be
stipulated as a condition for restructuring the account, if under the
Techno-Economic Viability study, the account is likely to become viable
on hiving off of non-core activities and other assets.
(8) For restructuring of dues in respect of listed companies, lenders

may be, ab-initio, compensated for their loss or sacrifice (diminution in
fair value of account in net present value terms) by way of issuance of
equities of the company upfront, subject to the extant regulations and
statutory requirements.
(9) If the lenders‟ sacrifice is not fully compensated by way of issuance

of equities, the right of recompense clause may be incorporated to the
extent of shortfall.
(10) In order to distinguish the differential security interest available to

secured lenders, partially secured lenders and unsecured lenders, the
Committee may consider various options, such as:
(a) prior agreement in the Inter-Creditor Agreement among the
above classes of lenders regarding repayments;
(b) a structured agreement stipulating priority of secured creditors;
(c) appropriation of repayment proceeds among secured,
partially secured and unsecured lenders in certain pre-agreed
proportion.
(11) The Committee shall, on request by the enterprise or any creditor
recognized under paragraph 4.3, provide information relating to the
proceeding as requested by the enterprise or such creditor.
10.4 Prudential Norms on Asset Classification and Provisioning
The extant asset classification and provisioning norms will be applicable
for restructuring of accounts under this Framework.
11. Review
(1) In case the Committee decides that recovery action is to be initiated
against an enterprise, such enterprise may request for a review of the
decision by the Committee within a period of ten working days from
the date of receipt of the decision of the Committee.
(2) The request for review shall be on the following grounds:
(a) a mistake or error apparent on the face of the record; or
(b) discovery of new and relevant fact or information which
could not be produced before the Committee earlier despite the
exercise of due diligence by the enterprise.
(3) A review application shall be decided by the Committee within a
period of thirty days from the date of filing and if as a consequence of
such review, the Committee decides to pursue a fresh corrective action
plan, it may do so.
Annex-I
SMA-0 Signs of Stress

Illustrative list of signs of stress for categorizing an account as
SMA-0:
1. Delay of 90 days or more in (a) submission of stock statement / other
stipulated operating control statements or (b) credit monitoring or
financial statements or (c) non- renewal of facilities based on audited
financials.
2. Actual sales / operating profits falling short of projections accepted for

loan sanction by 40% or more; or a single event of non-cooperation /
prevention from conduct of stock audits by banks; or reduction of
Drawing Power (DP) by 20% or more after a stock audit; or evidence of
diversion of funds for unapproved purpose; or drop in internal risk rating
by 2 or more notches in a single review.
3. Return of 3 or more cheques (or electronic debit instructions) issued

by borrowers in 30 days on grounds of non-availability of balance/DP in
the account or return of 3 or more bills / cheques discounted or sent
under collection by the borrower.
4. Devolvement of Deferred Payment Guarantee (DPG) installments

or Letters of Credit (LCs) or invocation of Bank Guarantees (BGs) and its
non-payment within 30 days.
5. Third request for extension of time either for creation or perfection of
securities as against time specified in original sanction terms or for
compliance with any other terms and conditions of sanction.
6. Increase in frequency of overdrafts in current accounts.
7. The borrower reporting stress in the business and financials.

8. Promoter(s) pledging/selling their shares in the borrower company due
to financial stress.
Annexure-III
Operational guidelines for incentives & subsidies under the State
Package vide Government Order no. 58-IND of 2016 dated: 15.03.2016
1. The DICs have been accorded power to approve the incentive cases upto Rs.
5.00 Lac for the purpose of which the Director Industries and Commerce
Jammu/Kashmir shall nominate/constitute a District Level Committee headed by
the General Manager, DIC.
2. Incentive cases exceeding Rs. 5.00 Lac shall be approved by Division Level
Committee headed by respective Directors of Industries and Commerce,
constituted vide Government Order No: 58-IND of 2016 Dated: 15.03.2016.
3. 30% of the incentive cases approved by District Level Committees shall be
subjected to audit by the Directorate for which a Committee shall be nominated
by the respective Directors, Industries & Commerce. This audit shall be
applicable to all the incentives approved by District Level Committees under the
J&K State Industrial Policy, 2016.
4. All the transactions pertaining to purchase of Plant, Machinery & equipment on
which incentive is claimed shall invariably have to be through the banking
instruments.
5. The incentive wise procedural guidelines for the implementation of various State
incentives as prescribed in the J&K Industrial Policy 2016 are discussed
hereunder:
5.1 30% CAPITAL INVESTMENT SUBSIDY:
5.1.1 Capital Investment Subsidy is meant to supplement resources of the promoter
for smooth functioning of the unit. As and when a unit is registered formally, it is
entitled for CIS on Plant & Machinery to the extent of 30% under State Package
of Incentives.
5.1.2 The unit holder shall have to apply within one year from the commencement of
date of production of the unit to General Manager on the format prescribed for
the purpose for availing 30% incentive on Plant & Machinery with the documents
as mentioned below:
I. CIS Application Form.
II. Copy of Project Report.
III. Copy of acknowledgement of EM-II.
IV. Detailed list of Plant & Machinery installed.
V. Detailed list of items/ components of P&M considered eligible for subsidy under State
Package 2016 as per format given below.
VI. Copy of lease deed/ rent deed/ ownership deed.
VII. Bills/ vouchers/ GR‟s/ toll receipts and VAT-58 of Plant & Machinery installed.
VIII. CA certificate regarding investment made on the project as per the prescribed
proforma.
IX. Valuation of civil works/ work done estimate of the factory building as per the
prescribed proforma, site plan by the approved valuer.
X. Bank loan sanction/ Means of Finance/ fixed investment certificate.
XI. Power sanction/ power connected certificate from PDD.
XII. Mode of payment certificate of Plant & Machinery and Civil Works from CA.
XIII. Affidavit/ Undertaking & Indemnity Bond (attested by Judicial Magistrate).
XIV. Balance Sheet.
XV. Photographs of the Plant & Machinery Installed in the unit duly attested by GM DIC
concerned.
XVI. Affidavit (attested by Judicial Magistrate) from the promoter (s) if he has obtained
unsecured loans.
XVII. Partnership Deed/ Memorandum and Articles of Association/ ROC.
XVIII. NOCs/ Consent to operate from PCB.
XIX. PAN Card.
XX. Current income tax return/ sales tax return.
XXI. Labour Certificate.
XXII. Agreement and Indemnity Bond on disbursement as per format duly notarized.
5.1.3 The General Manager shall examine the case within a period of seven days and
in case the unit holder qualifies for CIS uptoRs. 5.00 Lac, shall place the same in
the District Level Committee nominated by the Director, Industries & Commerce
for the purpose. The units which qualify for CIS on P&M for an amount above Rs.
5.00 Lac, the same shall be forwarded to the Directorate for discussion and
approval in the Divisional Level Committee.
5.1.4 The General Manager shall convene at least one meeting of the District Level
Committee in each quarter to clear the cases.
5.1.5 After the cases are approved by the District Level Committee the sanction shall
be issued within a period of two days by the General Manager.
5.1.6 The General Manager shall forward the list of sanctioned cases to the Directorate
for meeting the liability and for conducting 30% audit of the cases.
5.1.7 In case of Micro and Small units falling in Zone-B as notified in the State
Industrial Policy 2016 an additional incentive @10% of the Capital Investment in
Plant & Machinery shall be provided. However, this shall be subject to the upper
ceiling of Rs. 20.00 lacs.
5.1.8 The General Manager shall process and calculate the 30% CIS on the
components of P&M considered eligible for subsidy under the State Industrial
Policy 2016 as per the format shown herein below:
Detailed list of items/components of Plant & Machinery considered
eligible for subsidy under State Policy 2016
Name of the unit:-M/S_________________________________
(New unit) Date of Production:
S. As appraised by Financial Institution assisting the As considered eligible for subsidy under State Industrial
No. project/Independent Agency (in case of self financed Policy 2016 by the DIC and recommended to Divisional
project appraisal report by Chartered Accountant) Level Committee for approval
Bill No.& Items/components of Amount Items/Components of Amount Reason for
Date plant and machinery Plant and Machinery deviation (if any)
from appraisal
report of the
Financial
institution.
1. Deletion
2.
3.
4.
5.
Total Bill Amount Rs.

Amount considered Rs.
30% CIS worked out Rs.
5.2 INCENTIVES ON POLLUTION CONTROL DEVICES:
The procedural guidelines for availing of incentives under this scheme shall be as
under:
5.2.1 The entrepreneur who intends to install the Pollution Control Devices/
Equipment, shall apply to the General Manger concerned for grant of permission
who shall accord the same within a period of two days and recommend the
equipment for import to the Director of Industries & Commerce Jammu/ Kashmir
for its installation in the unit premises.
5.2.2 After the equipment is installed in the unit premises, the unit holder shall
approach the General Manager concerned with an application and the documents
as provided in para xvii of Annexure-I of these guidelines for availing the
incentive on these devices/ equipment.
5.2.3 The General Manager shall on the same day forward the list of Pollution Control
Devices/Equipmenttothe J&K, SPCB requesting the said organization for
certifying the installation and satisfactory commissioning of the installed
equipment.
5.2.4 After receiving the satisfactory installation and commissioning report from the
said organization (J&K SPCB) the General Manager shall process the case for
placement before District Level Committee or Divisional Level Committee as the
case may be.
5.2.5 60% subsidy shall be extended for purchase of Pollution Control Devices/
Equipment, subject to an upper ceiling of Rs. 50.00 Lac.
5.2.6 The General Manager will however ensure that the unit holder has not already
claimed the said subsidy under the CIS or similar subsidy schemes of Central/
State Government.
5.2.7 Checklist of documents:
I. Application Form.
II. Copy of Project Report.
III. Copy of acknowledgement of EM-II.
IV. Copy of Lease Deed/ Rent Deed/ Ownership Deed.
V. Bills/ Vouchers/ GR‟s/ Toll Receipts of the Plant & Machinery installed.
VI. C.A. Certificate regarding investment made on the project as per the prescribed
proforma.
VII. Bank Loan Certificate/ Means of Finance/ Source of investment.
VIII. Power connection sanction copy/ power connected certificate.
IX. Mode of payment certificates of Plant & Machinery and Civil Works from CA.
X. Affidavit/ Undertaking & Indemnity Bond (attested by Judicial Magistrate as per
proforma available in the respective DIC‟s.
XI. Balance sheet.
XII. Photographs of the Plant & Machinery installed by the promoter (s).
XIII. Affidavit (attested by Judicial Magistrate) of the promoter (s), if got unsecured loan.
XIV. Partnership Deed/ Memorandum and Articles of Association/ ROC.
XV. Consent from PCB.
XVI. PAN Card/ current income tax/ sales tax return.
XVII. Agreement and Indemnity Bond on disbursement as per format duly registered in the
court of Sub Registrar.
5.3 INTEREST SUBSIDY(3% and 5% ) ON WORKING CAPITAL:
Procedural guidelines to be adopted in this regard are as follows:
5.3.1 In order to avail this incentive, the unit holder shall apply at the end of each
financial year along with all relevant documents as shown herein below to the
office of the General Manger for a period of five (05) consecutive financial years
from the date of commencement of commercial production.
I. Bank application form duly filled in by Banker.
II. Date of sanction of working capital loan with amount sanctioned/Sanction letter
of the bank with date of sanction/ disbursement.
III. Date of encashment in case of enhancement in working capital/ enhancement
sanction letter.
IV. Annual Production Certificate/ Balance Sheet & Profit and Loss Account.
V. Annual sales turnover by CA and annual Sales Tax return.
VI. Labour Certificate.
VII. Agreement and Indemnity Bond on disbursement as per format duly notarized.
5.3.2 The claim shall have to be preferred invariably in the financial year following the
year of claim, failing which the unit holder shall not be eligible for the said
period.
5.3.3 The General Manager shall process the claim as per the format given hereunder
and subsequently place the cases before Divisional Level Committee/ District
Level Committee for approval/ sanction as the case may be.
5.3.4 Industrial units falling in Zone-B shall however be provided 5% Interest Subsidy
on Working Capital.
5.3.5 However, in case of units falling in Zone-B, the 3% Interest Subsidy shall be
availed under the Special Central Package wherever eligible in the first instance,
and claim the balance of 2% from the State Package.
5.3.6 The Interest Subsidy ceiling shall be Rs.10.00 Lac in case of the units falling in
Zone-A and Rs.15.00 Lac in respect of the industrial units falling in Zone-B.
5.3.7 The industrial units which are not eligible under the prescribed conditions to
draw the 3% Interest Subsidy from the Special Central Package can draw the
entire working capital subsidy from the State Package.
3% INTEREST SUBSIDY CALCULATION SHEET
I Name of the Unit
II Working capital
III Financial Year I. Previous Year
IV PMT No. II. Working Capital
V Rate of Interest III. Turn over
VI Name of the Bank Quantity

VII Annual Turnover Quantity Amount
Amount IV. Sanctioned Subsidy
IX clauses – A calculation on the basis of working capital norms
S. Month Amount of Rate of Total Total Least 3% Interest 3% Least of
No. Quarter working interest interest Interest of Two subsidy Subsidy two
capital charged calculated charged calculate by claimed as Interest
disbursed by the by DI&C as per DI&C per Bank subsidies
(Rs. in Bank Kashmir Bank (on col 5 ) statement
lacs) (inRs.) (inRs.)
1 2 3 4 5 6 7 8 9 10
1 April
2 May
3 June
1st Quarter
4 July
5 August
6 September
2nd Quarter
7 October
8 November
9 December
3rd Quarter
10 January
11 February
12 March
4th Quarter
Grand Total
Amount claimed by the Bank
Amount calculated by the General Manager Concerned
Amount of subsidy @ 3% recommended
5.4 SUBSIDY (100%) ON PURCHASE/ INSTALLATION OF DIESEL ENGINE

GENSET
5.4.1 A subsidy of 100% on purchase and installation of DG set from 10 KW to 2000
KW capacity purchased from reputed/ standard company‟s shall be allowed.
5.4.2 Capacity of DG Set should have relevance with the power connected to the unit.
5.4.3 The amount of the subsidy on DG Set shall not exceed Rs. 40.00 Lac for Zone-A
and Rs. 45.00 Lac for Zone-B in any case.
5.4.4 The amount of subsidy on purchase of one DG set shall be paid to the supplier
through the Bank even if the promoter may not have taken any loan for
purchase of the DG set.
5.4.5 An amount of 50% of the subsidy on DG set shall be paid on verification of
installation and the remained shall be paid after six months of installation or date
of commencement of production of the unit, whichever is later.
5.4.6 DG Set purchased/installed shall not be allowed to be shiftedout of State or to
any of the unit for the period of ten years counted from the date of installation,
except with the approval of DI&C.
5.4.7 The procedure for availing subsidy on the purchase and installation of DG set is
given in the following paras.
5.4.8 The unit holder desirous of installing a DG set shall have to seek permission from
the concerned General Manager before the same is purchased and installed in
his unit premises.
5.4.9 The checklist for seeking permission for purchase and installation has been
notified in para xii of Annexure-V to the State Industrial Policy, 2016 and is also
reproduced herein below:
I. Quotations of DG set to be purchased, minimum from two suppliers.
II. List of Plant & Machinery installed with power load.
III. Self declaration from the entrepreneur regarding not having installed the DG set and
not having availed subsidies earlier.
IV. NOC from PDD regarding installation of DG set of the desired load.
5.4.10 The General Manager shall issue the permission for purchase and installation of
DG set within a period of two days after all the requisite documents are
received by his office.
5.4.11 After the unit holder purchases and installs the DG set, he/she shall intimate
about the same to the concerned General Manager alongwith the documents as
prescribed in para xiv of Annexure-V to the State Industrial Policy, 2016 which
are as below:
I. Permission from GM DIC, Industries & Commerce.
II. Bills/ Vouchers of DG set purchased and duly verified from Sales Tax
Department.
III. CA certificate regarding investments made on purchase of DG set.
IV. Satisfactory commissioning certificate/ sanctioned power load and fitness
certificate from PDD.
V. Mode of payment certificate from bank, if any.
5.4.12 The General Manager shall issue sanction after the case is approved by the
District Level Committee if the claim is uptoRs. 5.00 Lac and for all cases
involving claim above Rs. 5.00 Lac recommend the case to Director, Industries
& Commerce concerned for approval by the Divisional Level Committee. The
Director, after the approval by the Divisional Level Committee shall issue
sanction within two days and release the funds in favour of the units on the
same day.
5.4.13 Likewise, once the case is approved by District Level Committee the General
Manager shall issue sanction within a period of two days positively and convey
the liability to the Directorate for release of funds on the same day. The
disbursement shall also be made by the General Manager within two days
following the release of funds.
5.5. INCENTIVES ON QUALITY CONTROL:
5.5.1 The industrial units procuring quality certification like ISO, ISI, BIS, FPO, BEE,
AGMARK, ECOMARK etc. shall be given a subsidy of 30% of the total cost
incurred for obtaining the said certificate, subject to a maximum of Rs.2.00 Lac
as certified by the Chartered Accountant. This incentive, however, can be availed
only once.
5.5.2 In this regard the General Manager shall place the case before the District Level
Committee for approval of sanction of subsidy after the unit holder prefers this
incentive and produces the following documents in support of his/her claim.
I. Certificate from Chartered Accountant regarding the total cost incurred for
obtaining the said certificate.
II. Attested copy of the quality certificate.
5.5.3 The General Manager shall issue sanction within a period of two days after the
approval of District Level Committee and convey the liability of funds to the
Directorate on the same day.
5.5.4 The General Manager shall disburse the incentive within a period of two days
from the date of receipt of funds.
5.6. INCENTIVE ON TESTING EQUIPMENT:
5.6.1 Incentive of 100% subsidy on testing equipment shall be available to the
industrial units subject to the upper limit of Rs. 35.00 Lac. The incentives shall be
restricted to 25% of the total capital investment, if the cost of testing equipment
exceeds 25% of the total investment. The procedure to be followed for availing
incentive in this regard is given in the following paras.
5.6.1 The unit holder who intends to install testing equipment/ lab shall approach the
concerned General Manger with the documents as shown below:
I. Quotations (minimum 03) from Testing Equipment suppliers.
II. List of Testing Equipment to be purchased.
III. Form to be filled by the unit holder.
IV. CA certificate for fixed assets.
5.6.2 The General Manager shall issue sanction for purchase of testing equipment
within a period of two days after the receipt of application and abovementioned
supporting documents.
5.6.3 The unit holder shall approach the General Manager once the said equipment is
purchased and installed in the unit with the following supporting documents:
I. Copy of permission by General Manager, DIC Industries & Commerce.
II. Bills/ Vouchers of equipment purchased and verified by Sales Tax Department.
III. Satisfactory commissioning certificate from SICOP/ DIC any other authorized agency.
IV. Mode of payment certificate from bank.
5.6.4 On the receipt of claim supported by requisite documents the General Manager
shall place the case before the District Level Committee for the claims not
exceeding Rs. 5.00 Lac or forward the case to concerned Director, Industries &
Commerce for placement of the case before Divisional Level Committee for all
the claims exceeding Rs. 5.00 Lac for grant of approval for sanction of said
subsidy.
5.6.5 The General Manager shall issue the sanction within a period of two days after
the approval is granted and convey the liability on the same day to the
Directorate.
5.6.6 The disbursement shall be made by the concerned General Manager within a
period of two days. The General Manager shall however obtain an affidavit/
undertaking and indemnity bond (attested by Judicial Magistrate) as per the
proforma available in the respective DICs.
5.7 GEOGRAPHICAL INDICATION (G.I) CERTIFICATION/ BRAND
PROMOTION:
5.7.1 In order to help manufacturers who are operating in highly competitive markets,
the Government shall provide assistance for GI certification in Handicraft and
Handloom sector. The assistance shall be available in the shape of subsidy for a
period of three years. The subsidy shall be paid to the unit holder of his/ her
products @ 50% of expenses incurred during the first year subject to a
maximum of Rs.15.00 Lac, 30% of the expenses incurred during the second year
subject to a maximum of Rs.10.00 Lac and 10% of expenses incurred during the
third year subject to a maximum of Rs.5.00 Lac.
5.7.2 The application form as per prescribed format, as given here below, duly filled in
by the unit holder along with undertaking at the end and supporting documents
as per the below mentioned checklist is to be submitted to the General Manger
DIC for the purpose for approval of the scheme.
APPLICATION FORM FOR G.I. CERTIFICATION
COMPANY PARTICULARS:
1. Name of the company:
2. Registered Office:
3. Factory:
4. Telephone/Fax/e-mail:
5. Nature of company: Proprietorship/partnership/private/public
limited
6. Contact Person:
7. Name of bankers:
8. Permanent Registration Number with DIC
9. TIN No. of Department of Commercial Taxes
10. PCB‟s Consent No. and Date:
PRODUCTS MADE AND MARKETED
11. Products made: Proprietorship/partnership/private/public limited
S.No. Name of Product Annual Installed Capacity
12. Production during last 3 years:
Year Production
13. Main markets:
14 Sale in the last three years:
Year Quantity Total Sale Value
PRESENT MANUFACTURING SYSTEM
15. Manufacturing Process Please describe in a separate sheet the
process of manufacture, including
technology used.
16. List of equipment:
17. Productivity/ day
18. Energy consumption/ day
19. Waste generated/ day: Solid:
Liquid:
Gaseous
20. Mode of disposal of waste:
PROPOSAL FOR G.I CERTIFICATIONS
(Applicants to get a project report prepared by a consultant for G.I. Certification, the cost incurred will
qualify for assistance under the scheme within the overall limits)
21. Objectives of G.I. Certifications To increase market share
To enter new market
To compete effectively
To create niche market
(Tick the relevant objectives add if any other)
22. Proposed strategy Describe how the objective will be
achieved
(Attach separate sheet)
23. Cost elements:
S.No. Item of Expenditure Estimated Cost
Year 1Year 2Year 3
24. Means of financing Own resources:
Bank loan:
Assistance under the scheme:
25. Success indicators: Increase in sale at the end of : Year 1/ Year 2/ Year 3
Increase in market share : Year 1/ Year 2/ Year 3
Entry to new market : Year 1/ Year 2/ Year 3
Any other indicator :
26. Brand Name:
27. Anticipated Problems:
28. Any other relevant information:
29. Time schedule of implementation
30. Name of consultant (if any) with experience:
I hereby declare that the information given herein is correct and true to the best of my
knowledge and belief. I agree that if any information given is found to be incorrect or untrue
after the G.I Certification scheme is approved, the sanction given can be withdrawn by the
Government at any point of time in future and I shall be liable to return the incentive received
from the Government with penalty as may be fixed by the Government.
(Applicant) Name: Address: Place:
Dated:
5.7.3 Application as per format will have to be submitted to the General Manager
concerned along with the project report for the future three years and the
Balance Sheet for the last three years. The project for approval shall be admitted
by the DIC concerned as per checklist.
5.7.4 The General Manager shall forward the case to the concerned Director Industries
& Commerce for grant of approval of permission by the Divisional Level
Committee.
5.7.5 The General Manager shall grant permission to the unit holder within a period of
two days after the same is approved by the Divisional Level Committee.
Thereafter, the unit holder may proceed with the implementation of the scheme.
5.7.6 The claim will be disbursed by the General Manager concerned after the unit
holder obtains G.I certifications.
5.8. SUBSIDY ON PRE-INVESTMENT STUDIES/ FEASIBILITY REPORT:
5.8.1 The expenditure incurred by the entrepreneur on such feasibility reports, which
are prepared by J&K ITCO, J&K DFC, J&K SIDCO, J&K SICOP or any other
agency approved by the Director, Industries & Commerce from time to time,
shall qualify for 100% subsidy at the time of execution of the project, subject to
limit of Rs. 2.00 Lac.
5.8.2 The promoter may also get a report prepared from any other specialist agency/
reputed consultant(s) in the field.
5.8.1 In this regard the General Manager shall place the case before the District Level
Committee for approval of sanction of subsidy after the unit holder prefers this
incentive and produces the following documents in support of his claim.
I. Certificate from Chartered Accountant regarding the total cost incurred for obtaining
the said report/DPR.
II. Certificate from the consultancy from which the pre investment studies/ feasibility
report has been framed to the effect that the same has been prepared by it.
5.8.2 The General Manager shall issue sanction within a period of two days after the
approval of District Level Committee and convey the liability of funds to the
Directorate on the same day.
5.8.3 The General Manager shall disburse the incentive within a period of two days
from the date of receipt of funds.
5.9 FREIGHT SUBSIDY:
5.9.1 Freight Subsidy of 90% is available under Special Central Package. In order to
help the unit holders in thrust industries in Zone-B districts, an additional 5%
freight subsidy shall be provided under the State Package.
5.9.2 The unit holder is allowed cash transaction payment to the tune of Rs. 20,000/-
only under the scheme.
5.9.3 The unit holder shall prefer the claim on quarterly basis alongwith the documents
as depicted herein below in the office of General Manager (DIC).
CHECKLIST FOR FREIGHT SUBSIDY:
S.No. Particular
01. Name and address of the unit
02. Period of claim
03. Date of receipt of the claim at DI&CC
04. Date of received of the claim in DI&C
05. Application Form of the unit with date and signature
06. Enquiry Report of DI&CC
07. SSI/IEM Registration Certificate
08. Transport Subsidy Registration Certificate
09. Date of 1st Commercial Production of the unit
10. Annexure-I [Statement of Raw Materials (RM) purchased]
11. Annexure-II [Statement showing the utilization of raw materials and Finished Products (FM)
Manufactured during the claim period]
12. Annexure-III (Statement of Finished Goods transported to places outside NER/ within NER
during claim period)
13. Sales Tax Registration Certificate and Value Added Tax Clearance Certificate
14. VAT payment Challans/ VAT Returns
15. Income Tax Registration Certificate & Clearance Return submitted
16. PAN Card
17. Railway Freight Certificate for relevant period, if applicable
18. Capacity Assessment Certificate with quantum of F.G. produced per limit consumption of
power and diesel to be specifically mentioned in the joint assessment report, facilitating
examination of claim on the basis of these parameters
19. Road distance certificate from competent authority
20. Employment certificate from competent authority
21. List of Employee (s)
22. Affidavit as per prescribed format (by unit)
23. List of Board of Directors/ Partners
24. Article of Memorandum of Association/ Partnership Deed
25. Company Registration Certificate
26. Upto date balance sheet showing carriage inward and outward
27. State Electricity Board/ Power Department power sanction letter and NOC for installation of
D.G. Set, If applicable
28. Power bills and receipt for concerned period
29. Statement showing month wise output and diesel and power consumption, rating of the DG
Set (KVA), diesel consumption and hours run.
30. Factory license (Upto date)
31. Chartered Accountant Certificate
32. Land Documents
33. NOC/ Consent from Pollution Control Board
34. NOC from local authority (GaonPanchayat Secretary/ GaonBurah, Municipal etc.)
35. Bank statement for payment made to transporters during the period (Payment only by cheque)
36. Bank A/c No. and Name
37. Bills &Challans for raw materials purchased (from the RM supplier)
38. Receipt from Transporters for carrying RM
39. Bills and Challan consignment note for finished goods dispatched
40.
41. In case of excisable goods produced by the unit
Certificate from Excise Department showing the quantity cleared on quarterly basis.
Excise Payment challan; Refund statement showing quantity and value
42. In case of local sale, detailed address of purchasers with payment receipt details (cash/
chequeetc) CA certificate on the body of the statement
43. In case of purchase of RM from outside NER and from within NER: Copy of challan and
Consignment Note of transporter endorsed to purchaser
44. In case of Finished Products sold outside NER or within NER:
Copy of C-Form against the consignment sold to the party &
Photocopy of consignment note acknowledged by the purchasers
5.9.4 On receipt of the application along with the documents and as per the checklist
the General Manager shall examine the case in his office and recommend the
same to the Directorate for placing before the State Level Committee/ Divisional
Level Committee as the case may be.
5.9.5 The State Level Committee shall discuss and approve the 90% freight subsidy
claim of the unit holder.
5.9.6 The Divisional Level Committee shall discuss and approve the additional 5%
freight subsidy claim of the unit holder in case of the units falling in thrust
industries in Zone-B districts.
5.9.7 The General Manager shall disburse the additional 5% freight subsidy claim
within a period of three days from a date of receipt of funds for which he shall
execute agreement with the unit holder and obtain indemnity bond duly attested
by the Judicial Magistrate.
5.10 AIR FREIGHT SUBSIDY:
5.10.1 Air Freight Subsidy is available on export of finished goods and import of raw
material for the units registered under MSME sector for any destination within
the country @ 50% subject to maximum of Rs. 5.00 Lac per year. However, in
respect of the Handicrafts and Handloom sector, Exporter Air Freight Subsidy
shall be allowed to the extent of 50% for parcels upto 5000 Kgs for destination
within the country and 1000 Kgs outside the country per year to registered
traders/ exporters, registered with Customs Department having maximum limit of
15.00 Lac.
Annexure-IV
(Section 4.22 of IP-2016)
(G.O No. –IND of 2017 Dated: -03-2017)
SELF-UNDERTAKING FORM
I/We…………………………………………………………S/o/D/o/W/o………………………………………………
……...
R/o…………………………………………………………………………………………………………………………
…and
Manager of M/s…………………………………………………………………………………hereby
solemnly affirm to undertake on oath as following:
1. That I/We wish to establish an industrial/business unit with the Name & Style
“M/s…………………………………………………………………………..” and Line of Activity as
“…………………………………………………………………………..”
at………………………………………………
2. That I/We applied for Power Availability Certificate to the Power Development Department on
………….. vide no……………………………………………(copy of application and acknowledgement
enclosed) and for Consent to Establish to the PCB on …………………………………………….vide
no………………………………………………….(copy of application and acknowledgement enclosed ).
3. That I/We shall fully abide by all the provisions of the State and Central Laws applicable for the
establishment of my/our aforementioned industrial/business unit.
4. That in case of any deviation/non-compliance of any provision of the State and/or Central law(s) on
my/our part or on the part of management of my/our industrial/business unit, I/we and the
management of the unit shall be solely responsible, and the Industries & Commerce Department,
J&K or any of it’s formations would not be responsible for that deviation/non-compliance and I/we and
the management of my/our unit shall be liable to be prosecution under the provisions of the law and
the Industries & Commerce Department, J&K and any of it’s formations shall not be party in such
prosecution or liable to be sued in any court of law.
5. That I agree to accept and pay penalty ranging from Rupees Fifty Thousand to Rupees Five Lakh as
shall be decided by the Industries & Commerce Department in case of any violation detected on
my/our part or the part of management of the unit.
PLACE………………………………
DATE……………………………….. Signature of the Applicant

(Name, Designation and Address)
Attestation of the Judicial Magistrate

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Process followed for preparation of Procedural Guidelines to the Industrial

Procedural Guidelines for establishment of Industrial Units in

6.0 Premium and Rent of leased land:-

The Jammu and Kashmir State Pollution Control Board

All Scheduled Commercial Banks

4. Banks should continue to report credit information and SMA

5. Please acknowledge receipt and furnish Action Taken Report by July

Framework for Revival and Rehabilitation of Micro, Small

2.2 As regards accounts with aggregate loan limits up to Rs.10 lakh

2.3 Identification by the Borrower Enterprise - Any MSME

3. Committees for Stressed Micro, Small and Medium Enterprises:

4. Application to the Committee for a Corrective Action Plan

5. Corrective Action Plan by the Committee

6. The decisions agreed upon by a majority of the creditors (75% by

(8) For restructuring of dues in respect of listed companies, lenders

(9) If the lenders‟ sacrifice is not fully compensated by way of issuance

(10) In order to distinguish the differential security interest available to

SMA-0 Signs of Stress

2. Actual sales / operating profits falling short of projections accepted for

3. Return of 3 or more cheques (or electronic debit instructions) issued

4. Devolvement of Deferred Payment Guarantee (DPG) installments

6. Increase in frequency of overdrafts in current accounts.

7. The borrower reporting stress in the business and financials.

Total Bill Amount Rs.

VI Name of the Bank Quantity

5.4 SUBSIDY (100%) ON PURCHASE/ INSTALLATION OF DIESEL ENGINE

solemnly affirm to undertake on oath as following:

DATE……………………………….. Signature of the Applicant

Attestation of the Judicial Magistrate

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