GS 3: Economy | Infrastructure: Energy, Ports, Roads, Airports, Railways, etc

Why in News?

In order to facilitate the process of industrialization in hilly, remote and inaccessible areas, transport incentive is provided to:

  • The states of North Eastern Region (including Sikkim) under North Eastern Industrial Development Scheme (NEIDS) – 2017,
  • Jammu & Kashmir under Industrial Development Scheme – 2017
  • Lakshadweep and A&N Islands under Lakshadweep and Andaman & Nicobar Island Development Scheme – 2018


  • Under these schemes, all eligible industrial units can avail incentive on transportation of only finished goods through Railways or the Railway Public Sector Undertakings, Inland Waterways or scheduled airline (shipping for Andaman & Nicobar and Lakshadweep islands also) for a period of five years from the date of commencement of commercial production / operation.
  • It is applicable to all industrial units (barring Plantations, Fly Ash, Refineries, Power generating units, Coke, including Calcined Petroleum Coke industry and the units producing tobacco and manufactured tobacco substitutes, pan masala and plastic carry bags of less than 20 microns), both in public and private sectors irrespective of their size.
  • Under the scheme, subsidy on the transport cost for transportation of raw material and finished goods to and from the location of the unit and the designated rail-head was reimbursed for a period of 5 years from the date of commencement of commercial production.
  • The Freight Subsidy Scheme (FSS), 2013 has been discontinued with effect from 22.11.2016. However, the industrial units registered under these schemes during their currency, are eligible for the benefits of the scheme for the period specified therein.
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