Capital Investment Subsidy Scheme (J&K Development Finance Corporation)

What is the Capital Investment Subsidy Scheme in Jammu and Kashmir?

The Capital Investment Subsidy Scheme in Jammu and Kashmir is not a single standing scheme with a permanent rate. It is a line of central industrial incentives, renewed and re-notified over more than two decades, whose common feature is that a share of what an industrial unit spends on plant and machinery is given back as a subsidy, and that the money is disbursed by the J&K Development Finance Corporation Ltd (JKDFC).

JKDFC was incorporated on 30 May 2005 with an authorised capital of Rs 100 crore, and is described on its own portal as a Government of India enterprise, shareholding held by the Government of India (62.5 per cent), the Government of Jammu and Kashmir (12.5 per cent), Life Insurance Corporation (12.5 per cent) and J&K Bank Ltd (12.5 per cent). It was established to implement the 2002 industrial policy package for the region, and it states plainly that it is "the Nodal Agency for routing the subsidies and incentives under various schemes notified under industrial policies" for the two Union Territories of Jammu and Kashmir and Ladakh.

If you are an industrial unit in Jammu and Kashmir asking who will actually put the subsidy in your account, the answer is JKDFC.

Which scheme applies to you?

The NCSS 2021 is the scheme in force. It was notified by the Department for Promotion of Industry and Internal Trade on 19 February 2021 with a financial outlay of Rs 28,400 crore, effective from 1 April 2021 to 31 March 2037.

Under the earlier 2017 scheme, JKDFC was expressly the nodal agency for disbursal of incentives under the various components, and released incentive only through e-transfer to the designated bank accounts of eligible industrial units. That disbursal discipline continues.

How much is the capital investment incentive under NCSS 2021?

• Zone A: 30 per cent of investment made in plant and machinery (manufacturing) or in construction of the building and other durable physical assets (service sector), capped at Rs 5 crore.
• Zone B: 50 per cent on the same base, capped at Rs 7.5 crore.
• Eligible for new units and units undertaking substantial expansion.
• Available to units with investment up to Rs 50 crore.

Three further incentives sit alongside it under NCSS 2021:

1. Capital Interest Subvention (CIS), interest on loan up to a principal amount of Rs 500 crore for investment in eligible plant and machinery.
2. GST Linked Incentive (GSTLI), for new units, 100 per cent of gross payment of GST for a maximum period of 10 years from the date of commencement of commercial production.
3. Working Capital Interest Subvention (WCIS), for existing units, 5 per cent interest subvention on working capital loans for up to 5 years, with a maximum benefit of Rs 1 crore.

Who is eligible?

You can apply if:

• You are an eligible industrial (manufacturing) entity or an eligible service sector enterprise in Jammu and Kashmir, other than one run departmentally by government.
• You are a registered business enterprise under Goods and Services Tax.
• You are a new unit, or an existing unit undertaking substantial expansion.
• Your investment in plant and machinery, or in building and durable physical assets for the service sector, is within Rs 50 crore for the Capital Investment Incentive.
• You registered on the scheme portal within the registration window.

You are not eligible if:

• Your enterprise is run departmentally by government.
• You are not registered under GST.
• You are an individual seeking a personal grant, a loan waiver or a start-up stipend. This is an industrial unit incentive, and there is no individual citizen benefit under it. Individual enterprise support in Jammu and Kashmir runs through separate routes such as JK Mission Youth's Mumkin and Tejaswini, or through JKDFC's own loan products.
• You missed the registration window, or your unit commenced commercial production outside the scheme period.
• You are claiming the same component of the same project from another central or state scheme, since double-dipping on a component is not permitted.

JKDFC's own lending products

Separately from disbursing government incentives, JKDFC lends. Its eight product lines are MSME and industrial finance for new entrepreneurs and expansion, transport finance, a composite working capital term loan, Educational Institutional Plus for schools and colleges, Hospital Plus for clinics, hospitals, nursing homes and laboratories, equipment financing for capital goods, Eco Tourism finance for hotels and guest houses, and a Home Stays loan scheme.

A unit often uses both sides of JKDFC: a term loan to build the plant, and the capital investment incentive routed through the same corporation once the plant is commissioned.

How to apply for the capital investment subsidy

1. Register your unit under the scheme portal. For NCSS 2021, registration and claims are made on the DPIIT portal at jknis.dpiit.gov.in, which carries the user manuals and guidelines for both registration and claim.
2. Complete the statutory basics first: GST registration, Udyam or industrial registration, and registration with the District Industries Centre. The incentive is available only to a GST-registered business enterprise.
3. Establish and commission the unit, keeping the invoices for plant and machinery, or for building and durable physical assets in the case of a service enterprise, separate and auditable.
4. Obtain a chartered accountant certificate of the eligible investment actually made, and the certificate of commencement of commercial production.
5. File the incentive claim on the portal against your registration, attaching the investment certification, commercial production certificate and bank details.
6. Receive the incentive from JKDFC by e-transfer into the designated bank account of the unit. JKDFC does not disburse in cash.

For clarification on the mechanics of disbursal, approach JKDFC directly; for questions about registration eligibility and zone classification, approach DPIIT through the scheme portal, which lists a helpdesk telephone number and email.

Key dates you should know

• 19 February 2021 — NCSS 2021 notified by DPIIT, with an outlay of Rs 28,400 crore.
• 1 April 2021; scheme effective; registration opens.
• 30 September 2024: registration window closes.
• 31 March 2025: all registration applications to be disposed of, unless extended.
• 31 March 2037, scheme period ends.

Registration may also be paused if projected liability reaches 115 per cent of approved funds, so a window that is formally open can still be operationally shut. Confirm status before you commit capital on the assumption of a subsidy.

Where to contact JKDFC

• Registered Office, Jammu: Ground Floor, Jawaharlal Nehru Udyog Bhawan, Rail Head Complex, Jammu 180012. Phone 0191-2479516 and 0191-2479179.
• Corporate Office, Srinagar: Ground Floor, Sanat Ghar, Bemina, Srinagar

190018. Phone 0194-2490237.

• Email: contact@jkdfc.org
• Loan applications: the online Loan Management System at los.jkdfc.org
• NCSS 2021 registration and claims: jknis.dpiit.gov.in

Incentives are released only by e-transfer to the unit's own designated account. No agent can secure a sanction, and JKDFC will never ask an applicant for cash.