UNNATI Scheme

Background & Rationale

The North-Eastern Region (NER) of India has always been strategically important but economically lagging compared to other parts of the country. Industrialization has been weak due to lack of infrastructure, investment hesitancy, and geographical challenges.

To address this, the government introduced UNNATI, 2024 i.e. Uttar Poorva Transformative Industrialization Scheme. The scheme focuses on building a strong industrial ecosystem in the North-East by attracting new investments and providing incentives for both manufacturing and services.

Quick Facts

• Purpose: Strengthen industrial ecosystem in the North East and attract investment.
• Type: Central Sector Scheme (fully funded by the Union Government).
• Tenure: Till 2034 + 8 years of committed liabilities.
• Nodal Agency: North Eastern Development Financial Corporation Ltd. (NEDFi).

Objective

• Create gainful employment in the North East.
• Boost socio-economic development through industrial expansion.

Salient Features

A. Incentives & Support

• Incentives for industrial expansion and streamlined operations in manufacturing and service sectors.
• Application Period: Open until 31 March 2026.
• Production Deadline: Units must start production/operations within 4 years of registration.

B. Categorization of Districts

The North East region is divided into two zones for balanced growth:

1. Zone A: Industrially Advanced Districts.
2. Zone B: Industrially Backward Districts.

C. Fund Allocation

• 60% of Part A funds reserved for 8 NE states.
• 40% funds allocated on a First-In-First-Out (FIFO) basis.

D. Eligibility Criteria for Incentives (Minimum Investment)

1. Manufacturing Sector → ₹1 crore in Plant & Machinery.
2. Services Sector → ₹50 lakhs in construction of buildings & durable physical assets.
3. Micro Industries → ₹50 lakhs (for both manufacturing and services).

👉 Maximum benefit a single unit can get from all components = ₹250 crore.

Components of UNNATI Scheme

1. CII (Capital Investment Incentive)
   • Financial support for new & expanding units.
2. CIS (Capital Interest Subvention)
   • Financial relief by reducing interest burden on loans.
3. MSLI (Manufacturing & Services Linked Incentive)
   • Incentives directly linked to output of new units.

In Simple Words

UNNATI is like the government saying to entrepreneurs:

• “If you come and set up industries in the North East, we will share your risk.”
• “We will give you capital incentives, interest subvention, and production-linked support.”
• “Whether you are in manufacturing, services, or micro industries, we will ensure your investments are worthwhile.”

The ultimate aim is to generate jobs, reduce regional imbalance, and integrate North East India into the broader growth story of the nation.

✅ UPSC Relevance:

• Prelims: Eligibility, nodal agency (NEDFi), maximum incentive limit, zones classification.
• Mains: Useful in answers on regional development, balanced growth, industrial policy, employment generation, and North East India’s development challenges.