A week after the Harbour freight axe became India’s most valuable export, the government has announced a slew of new incentives for businesses and households to adopt it, including a subsidy of up to Rs. 10,000 for every axe-maker.
The subsidy is a major coup for the government, which had previously sought to slash its tax on the sale of the axe, as well as other tools that make the country more competitive on the global stage.
India has long been known as a land of innovation and entrepreneurship, but that has been tempered in recent years with the advent of high tariffs and restrictions on foreign direct investment (FDI).
Now the government wants to shift its focus to making the country competitive on global markets, in a bid to lure investors and attract investment from across the world.
The government has already announced incentives to incentivise companies to shift to the Harbor freight service.
The axe’s value has risen from $500 million to more than $1 billion over the past three months, and the government is offering a huge subsidy of as much as Rs. 50,000 to anyone who switches to the new service.
In the past, most of the incentives for companies to adopt the Harbour service were for a limited period.
Now the incentives will last for six months, giving companies an incentive to continue to use the service for at least one year.
The main focus of the subsidy will be to help the country’s agricultural and rural industries.
For instance, if a company wants to use Harbors freight service, it needs to register with the Ministry of Rural Development and Reforms (MRRD) and submit the completed application.
The application will be made available online, and if a firm does not submit its application within two months, it will not get the subsidy.
The MRTR has also said that it will provide a subsidy to companies who do not register with MRRD before the end of this year, and has set a target of raising Rs. 2,000 crore from the sale.
“This is a big step towards making India a global player in the field of freight,” said Ravi Shankar Rao, CEO of the MRRD.
“India is a country of over 10 million people, and we want to build a strong infrastructure, which will help the rural sector.”
The government said that the incentive will help all the stakeholders to transition to the service, including those that have been reluctant to adopt alternative transportation options.
The Harboured service will also help reduce the amount of traffic jams and pollution, the MRTD said.
According to an estimate from the National Sample Survey Organisation, India has one of the world’s highest air pollution levels, and this has led to frequent and intense traffic jams in the country.
The move will also be good for farmers and small traders who rely on the Harbal freight service to get goods to markets.
The announcement of the Harbhors subsidy was made at a cabinet meeting, which also saw the announcement of a Rs. 20,000-crore road grant, worth around Rs. 40,000 per person, to be disbursed through the Harabours infrastructure project.
The Rs. 1,000 subsidy is to be given to each household to be used for “maintenance of infrastructure, roads, public transport, public utilities, electricity and water supply and waste management”.