Transport Subsidy Scheme (TSS)
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Transport Subsidy Scheme (TSS)

Industrial units can transport goods (only finished goods and raw material) Railways, Waterways, or airlines (including shipping to Lakshadweep and Andaman & Nicobar island).

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Transport Subsidy Scheme (TSS) - Context

To establish the transit and transportation in a hilly, mountainous area located in a remote and less-accessible region. The incentives under the scheme shall be provided to the following states. To facilitate the process of industrialization in hilly, remote, and inaccessible areas**, transport incentive is provided to the following states.

Photo by Kinshuk Bose / Unsplash
  1. Entire North East region under NEIDS (2017).
  2. Jammu and Kashmir under IDS (2017).
  3. The Island of Lakshadweep and Andaman & Nicobar under LANIDS (2018).

Eligible Industrial Units can avail of Incentives of the scheme It is designed in the sense for eligible industrial units to take benefits of the scheme. Under this Industrial units can transport goods (only finished goods and raw material) Railways, Waterways, or airlines (including shipping to Lakshadweep and Andaman & Nicobar island). This scheme can be availed for a period of five years from the inception of the product/operations.

Freight Subsidy Scheme (FSS)

  • The Transport Subsidy Scheme (1971) was replaced by the Freight Subsidy Scheme (FSS - 2013).
  • Its operation benefited Himachal Pradesh, Uttarakhand, Jammu & Kashmir, Darjeeling, Andaman & Nicobar, Lakshadweep, and eight North Eastern States.
  • FSS was dismantled on 22nd November 2016. However, all industrial units that benefited under FSS still are made eligible to get benefits under the scheme.
  • This scheme is not available for the state of Chhattisgarh.

Background of the Scheme

  1. About Transport Subsidy Scheme: Union Government of India initiated the inception of the Transport Subsidy Scheme (TSS) on 23rd July 1971 in remote areas and locations accessible to industrialization.
  2. Objectives/Aim of the Scheme: The primary aim or subtle objective is to industrialize the remote location (hilly and mountainous areas) of India (mostly into eight North-Eastern regions).
  3. Agency Responsible for the Deployment: The objective implementation of TSS or manifestation of TSS was carried out by the Department of Industrial Policy and Promotion.

Monitoring and Review Mechanism for the Scheme**

In order to check any malpractice or employment of monopoly, the Directorates of Industries in each respective beneficiary State and Union Territories are expected to:

  • Periodically check if the subsidy is used for the intended purpose (i.e. finished goods/raw materials).
  • To implement policies and mechanisms for inspection of claims by industrial units and regular payment of the claims.
  • Lay groundwork for pre-registration and indicate the accommodation capacity of these benefiting units during the registration.
  • Create a system of Information, and regular updates of this information in regards to raw material and finished goods.
  • Implementation of policies that keep track of production and consumption (preferably utilization).