The Uttar Poorva Transformative Industrialization Scheme (UNNATI), 2024 is designed to drive industrial growth in the North-Eastern Region of India. As part of this initiative, the scheme provides incentives to manufacturing units that meet specific criteria, particularly concerning their investments in plant and machinery.
Key Guidelines for Core and Non-Core Components
The General Operational Guidelines for Registration of Units under the UNNATI 2024 scheme include a specific annexure (Annexure 3) that outlines which components of plant and machinery are considered core and which are deemed non-core. Understanding this distinction is crucial for manufacturing units seeking to maximize their eligibility for incentives.
Core Components
Core components are essential elements of the manufacturing process. These components are directly involved in the production activities of a manufacturing unit. According to the guidelines:
“The core components of Plant and machinery for the manufacturing industry will include the cost of mother production equipment essential for manufacturing activities and will be eligible for incentives.”
This means that only the machinery and equipment that are indispensable for the primary manufacturing process qualify as core components and are eligible for the financial incentives provided under the scheme.
Non-Core Components
Non-core components are supplementary items that, while necessary for the operation of a manufacturing unit, do not directly contribute to the production process. As per the guidelines:
“Non-Core Components will not be eligible for incentives under this scheme. The following items are covered under the non-core category:
a) Loading and unloading charges.
b) Sheds/ buildings for Plant & Machinery.
c) Miscellaneous fixed assets such as DG sets, Excavation/ Mining equipment, handling equipment excluding EOT cranes, electrical components.
d) Working Capital including Raw Materials and other consumable stores.
e) Commissioning cost.
f) Captive Power Plants except solar power plants for captive use.
g) Storage equipment.
h) Weigh bridge, Laboratory testing equipment.
i) DG Set.”
These items, while necessary for the full operation of a manufacturing facility, do not directly engage in the production process and therefore are excluded from receiving incentives under the scheme.
Important Clarification
This post is exclusively relevant to the manufacturing sector. The guidelines, examples, and explanations provided are specific to manufacturing units and do not apply to the service sector. While both core and non-core plant and machinery investments will be considered for determining eligibility under the scheme, incentives will only be provided for core plant and machinery components.
Examples of Core and Non-Core Components
To provide further clarity, let’s look at some examples of what might be considered core and non-core components under this scheme:
| Component | Core or Non-Core | Explanation |
|---|---|---|
| CNC Machine | Core | Directly involved in cutting, shaping, and manufacturing of products, crucial for the production process. |
| Assembly Line Conveyor | Core | Essential for moving products through different stages of production, an integral part of manufacturing operations. |
| Injection Molding Machine | Core | Used for producing plastic components by shaping molten plastic into parts, a key production tool. |
| Industrial Robot Arm | Core | Performs tasks such as welding, painting, and assembly, directly contributing to the manufacturing process. |
| Packaging Machine | Core | Engages in the final stage of production by packaging finished goods, a vital part of the manufacturing cycle. |
| Electric Panel Board | Non-Core | Distributes electricity within the plant, necessary for operation but not directly involved in manufacturing activities. |
| Air Conditioning System | Non-Core | Provides climate control in the manufacturing facility, necessary for maintaining operational conditions but not part of production. |
| Warehouse Storage Racks | Non-Core | Used for storing raw materials and finished products, supporting production but not directly contributing to manufacturing. |
| Forklift | Non-Core | Facilitates the movement of materials within the plant, essential for logistics but not involved in the production process itself. |
| Generator Set (DG Set) | Non-Core | Provides backup power, critical for continuous operations but not directly tied to the manufacturing process. |
| Welding Machine | Core | Used in production to join materials, directly involved in the creation of finished products. |
| Lathe Machine | Core | Shapes metal or wood, directly contributing to the manufacturing of parts and components. |
| 3D Printer | Core | Utilized for creating prototypes or final products, a direct manufacturing tool. |
| Boiler | Non-Core | Supplies steam or hot water for heating or industrial processes, supports production indirectly but is not part of manufacturing. |
| Water Treatment Plant | Non-Core | Ensures water quality for production processes, essential for operations but does not engage in manufacturing activities. |
| Compressed Air System | Non-Core | Provides compressed air for tools and machinery, necessary for operations but not involved in production. |
| Paint Booth | Core | Used in the production process for painting products, crucial in the final stages of manufacturing. |
| Grinding Machine | Core | Involved in the finishing of products by removing excess material, a direct part of the production process. |
| Overhead Crane | Non-Core | Lifts and moves heavy items within the plant, supports production but is not involved in the actual manufacturing process. |
| Dust Collection System | Non-Core | Maintains air quality by removing dust and particulates, necessary for operations but not directly related to production. |
| Solar Power Plant for Captive Use | Core (Conditional) | If used to power production equipment directly, it can be considered a core component as it supports the manufacturing process. |
| Electrical Wiring | Non-Core | Provides necessary electrical infrastructure, essential for operations but not involved in production activities. |
| Office Furniture | Non-Core | Necessary for administrative functions, supports the overall operation but not directly involved in manufacturing. |
| Quality Control Lab Equipment | Core | Used for testing and ensuring the quality of finished products, an integral part of the production process. |
| Safety Equipment | Non-Core | Ensures worker safety, crucial for operations but does not contribute to the production of goods. |
Why the Distinction Matters
The classification of components as core or non-core is pivotal under the UNNATI 2024 scheme for several reasons:
- Eligibility for Incentives: The scheme clearly stipulates that only investments in core components are eligible for financial incentives. Understanding this classification helps businesses make strategic decisions to maximize their benefits.
- Investment Planning: By focusing on core components, businesses can align their investments with the scheme’s incentives, ensuring that they are optimizing their capital expenditures.
- Compliance: Adhering to the definitions provided by the scheme ensures that businesses remain compliant with the guidelines, avoiding any potential disqualification from benefits.
For more details on how to apply for the scheme, you can visit our detailed guide on How to Apply for the UNNATI 2024 Scheme, or explore the Key Benefits of the UNNATI 2024 Scheme for Small Businesses.
Conclusion
The UNNATI 2024 scheme offers significant opportunities for manufacturing units in the North-Eastern Region, but taking full advantage of these opportunities requires a clear understanding of what qualifies as a core component. By strategically investing in core components, businesses can maximize their eligibility for incentives and ensure their operations are aligned with the objectives of the scheme.
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