ISAPM

Incentive Scheme for Acquisition of Plants and Machinery (ISAPM)

Incentive Scheme for Acquisition of Plants and Machinery (ISAPM)

Jute is one of the main cash crops and has been one of the major income-generating industry in India. It approximately brings revenue around Rs.1,000 crores per year and provides direct employment to more than 40 lakh families in India. Due to the shortage of raw materials and obsolete skills and machinery, the industry has seen vast destruction in the production and exportation of Jute and Jute Diversified Products (JDP). In order to overcome the crisis and further improve the productivity of the jute industry, Government of India has been implementing several schemes. Incentive Scheme for Acquisition of Plants and Machinery (ISAPM) is one such scheme initiated by the National Jute Board (NJB). Let us have a detailed review of the scheme in this article.

Objective of the Scheme

The main objective of the ISAPM scheme is to:

  • Restore the existing JDP units and construct new jute mills
  • Upgrade the obsolete machinery with modern technologies
  • Reduce the operation cost of the Jute mills with the upgraded equipment
  • Encourage entrepreneurs to manufacture valuable bio-degradable Jute products.

Eligibility Criteria

The entrepreneurs who are eligible to claim the scheme are as follows:

Incentive Criteria for Machinery

The machinery other than conventional shuttle-loom, Winding and Softener machines, 5½” pitch V-Roller drafting spinning frame and second-hand imported machinery as documented by Technology Upgradation Fund Scheme (TUFS).

For machinery not listed above, an approval from the Technical Committee and advocated by the NJB can serve the purpose to avail the incentives.

List of Machineries Eligible

  • Jute spreader machine, Breaker cards, Inter cards, Teasercards, Finisher cards, Hard waste cards, Drawhead,
  • Split can delivery, Auto leveller, Hopper feeder, Enzyme plant, Emulsion plant with electronically controlled, stirrer, Dust
  • Semi-automatic root cutting M/c.
  • Breaker-cum-Finisher card with or without Drawheads, auto-levellers & can changing devices

The Scheme’s Proficient Incentive

  • Volunteered by the TUFS, TC and NJB, all Jute Mills eligible under the scheme will get an incentive of 20% of the total plant cost including the VAT, taxes and Duties

Soon after the installation with its operational certification of the eligible machines, Jute Mill/JDP shall receive the incentive amount, which can be acquired from any bank or JDP’s available resources.

Rules for the Grant of Incentives

Rules framed by the National Jute Board to claim the incentives under the ISAPM Scheme are as follows:

  1. JDP units’ entrepreneur should present the detailed proposal on the acquisition, installation, modernization and/or upgradation of their new or existing units to the NJB along with the scheme details. The details that should be included in the proposal are listed below:
    • The Highlights of the proposal
    • The JDP unit and its management
    • List of the equipment installed in the unit that needs upgradation.
    • Benefits to be achieved through the project.
    • The location of the unit
    • Means of finance (whether they are applying with their own resource or through bank/financial institutions)
    • Details of the vendor who is undertaking the upgradation
    • Profit obtained through upgradation
  1. The NJB will take forth the proposal to their Technical Committee for review and issue an“In-principle Approval” (IPA) to the units after the examination and appraisal of the proposal.
  2. The units should submit the claims within one year(or eighteen months under the special situations) from the date of issue of IPA, and it can be claimed in two parts.
  3. Procurement of the machinery should be made from the vendors approved by the Technical Committee of the Scheme.
  4. JDP units that are obtaining incentives under the Technology Upgradation Fund (TUF) or any other schemes for the matter will not be eligible to claim the incentive from this scheme.
  5. The Technical Committee holds complete authority to restrict JDP units from disposing the items purchased with the incentive amount within a period of 5 years from the date of issue of subsidy.
  6. In order to avoid the perversion of the Scheme, NJB shall imprint the identification code on the equipment purchased with the incentives.

Application Procedure

  • Units applying for the incentives out of the loan amount obtained from banks or any other financial institutions should submit an appraisal memo issued by them.
  • An application for an incentive in the NJB prescribed format along with the proof of installation of equipment should be submitted to the Committee. The application form can be downloaded from the link
  • A DD in favour of “Indian Jute Industries’ Research Association”, payable at Kolkata, should be drawn for the technical fee of Rs.25,000 (for unit-member of IJIRA) or a fee of Rs. 50,000 (for unit-Non-Member of IJIRA) and submitted to the NJB. It will, then, be examined, processed and disbursed by the NJB.

Documents to be Submitted

The supporting documents that the applicant should submit to alleviate the application process are mentioned below:

  • Letter of Intent for purchase of machinery
  • Project Proposal
  • Claim Application
  • ID Proof
  • Company records
  • IJIRA Membership details
  • Cess C.A. Certification
  • Invoices pertaining to the purchase of machinery
  • Delivery note/challan
  • Payment Details if through Bank
  • Hypothecation details in case of bank loan

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