RENEWABLE FUELS - Government Regulations & Incentives

Subsidies available for plantation of Jatropha Curcas and a Biodiesel Factory.

There are two parts to the project. Plantation part and industrial undertaking part. Subsidies available to each part are different. In addition there are subsidies available from the Central Government and the State Government. The various subsidies in relation to Chhattisgarh state are given below:

1. Plantation Subsidies: (One project can avail of any one Central Subsidy)

a. Central subsidy through NOVOD (National Oilseeds and Vegetable Oils Development Board).
Applicable to Corporate bodies and individuals
Maximum subsidy is Rs 25 lakhs for companies and Rs 6.5 lakhs for individuals
Credit arrangement has to be made for this subsidy
Subsidy is for raising a nursery and for commercial plantation @Rs7500/hect in first year of planting and Rs.3600/hect for maintenance of plantation in the 2nd to 5th year of planting
Total cost of planting and maintenance to maturity will be borne in the ratio of 20% promoter, 50% bank loan and 30% subsidy, subject to overall limit

b. Central Wasteland Development Subsidy from Department of Wasteland development
Applicable to land owned by Government, individuals or Companies
It is for development of non forest wasteland
Maximum subsidy is for Rs.25 lakhs
Subsidy is upto 25% of project cost where promoter's contribution is 25%. Balance can be borrowed
Jatropha Curcas can be planted to develop the wasteland

c. Where land is owned by Government and government enters in partnership with companies for Watershed Area Development under Integrated Wasteland Development Programme (IWDP) or Drought Prone Areas Programme (DPAP) then subsidy is available from the Central Department of Land Resources for the specific approved project.
This is available for promotion or propagation of bio fuel plantations
Recommended size of the project area should be more than 5000 hectares
Project implementation agency will be the State Government
The implementation can be done by private parties in partnership with the Government
Subsidy is Rs. 6000/hect payable in 5 annual installments in the ratio of 15%, 30%, 30%, 15% and 10%.

2. Subsidies for Setting up Biodiesel factory payable by the Chhattisgarh Government.

a. Interest Subsidy on Term Loan and Working Capital Loan for Medium/Large Industries
75% of total interest paid up to a maximum of Rs. 20 lakhs for Special Thrust Industry for a period of 5 years in General area.
The amount increases if industry is set up in Most Backward Scheduled tribe dominated areas to Rs 40 lakhs per year for 7 years.

b. Infrastructure Costs/Fixed capital Investment Subsidy for Medium/Large Industries
25% of the infrastructure cost for establishing General Industry outside industrial areas for General Area. Maximum amount entitled will be equivalent to the amount of Commercial tax/central sales tax paid to the state in a 5-year period.
35% of total Capital cost of the project for Special Thrust Industries provided maximum entitled will be limited to the amount of commercial tax/central sales tax paid to the state in a 7 year period

c. Electricity Duty Exemption for Medium/Large Industries
Total exemption for a period of 10 years for General Industry from the date of commencement of commercial production for General Area
Total exemption for a period of 15 years for Special Thrust Industries from the date of commencement of commercial production for General Area
For Most Backward scheduled tribe dominated areas this increase to 15 years in both categories of industries.

d. Exemption from excise duty
Stamp Duty is exempt fully for setting up specified medium/large industries
Exemption is on deeds executed for purchase of land, shed and buildings for setting up an industrial unit
Exemption is also on deeds executed for securing loans and advances to be taken by the industrial unit within 3 years of registration of the unit

e. Exemption from Entry tax
Exemption will be computed from the date of commercial production or the date of availing exemption for the first time, whichever is earlier
Exemption is for a period of 5 years for General Industries in General Area and 7 years for Special Thrust Industries in General areas
For Most backward scheduled tribe dominated areas the period increases in both categories

f. There are some other minor subsidies being offered by the Chhattisgarh Government
Exemption /Concession in the Premium of Land Allotted in Industrial Area
Concession on Service charges for Allotment of Land outside Industrial area
Quality Certification Subsidy
Technical patent Subsidy

3. The subsidies offered by the Chhattisgarh Government is announced under their Industrial Policy valid for the period 2004 - 2009.Thus commercial production of the Industrial projects has to commence by 31.03.2009

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