Madhya Pradesh Scheme

Government of Madhya Pradesh

Department of Micro, Small and Medium Enterprises

 M.P. MSME Development Policy, 2019

 

Preamble:

MSMEs are the mainstay of Indian Economy. They contribute to around 95% of the enterprises of the country and make up to about 30% of the overall GDP. Around 20% of the MSMEs are based out of rural areas and consequently are a major source of employing rural workforce. In the last two years, Industries faced challenges consequent upon demonetisation and introduction of GST. While cash crunch characterised the FY 2016-17, lack of access to credit, fall in the value of rupee and increased compliance costs for switching over to the GST regime were the miseries for the sector in FY 2017-18 and 2018-19. The year 2019 is likely to be a favourable year for Micro, Small and Medium enterprises(MSME).

 

 

The Government has taken several measures to strengthen MSMEs. The Union Budget for FY 2019-20 has allocated RS.7011.29crore to the development of MSME Sector. The flagship scheme for employment generation of the Ministry, namely Prime Minister Employment Generation Programme (PMEGP) got an all-time high allocation of Rs.2327.00crore. This reiterates Government’s focus on creation of sustainable employment in the non-farm micro enterprise sector. For ensuring seamless credit guarantee to Micro and Small enterprises, Rs.597.00crore has been provided under the Credit Support Programme. To provide funding for the 2% interest subvention on incremental loan up to Rs.100.00lakh for GST- registered MSME units, Rs350.00crore has been provided under ‘Interest Subvention Scheme for incremental Credit to MSMEs 2018.

MSMEs have found it difficult to make the most of technology. Trade Receivables electronic Discounting System (TReDS) has been initiated to serve as a web based platform for facilitating finance to MSMEs through multiple finances at a competitive rate. This move is expected to bring in more TReDS more usable and credible.

Operative period of the Policy and work areas

This Policy shall come into effect from 01.10.2019.

This policy will continue till the time replaced by the new policy.

The MSME units commencing commercial production after 30.09.2019 shall be eligible to avail benefits only under this policy.  After the enforcement of this policy, the option of availing facilities/benefits for MSME promotion scheme 2017 will be closed for new manufacturing units which commence production before 01.10.2019 would eligible to avail concession under the MSME Development Policy 2017 or any earlier relevant policies.

Objectives of MSME Development Policy

The key objectives of the MSME Development policy 2019 are:-

  1. Achieving the state’s goal of overall industrial development and MSME competitiveness
  2. Creating enabling infrastructure
  3. Providing a conductive ecosystem and promoting inclusive growth for MSMEs.
  4. Providing an opportunity to young entrepreneurs through instilling employment generation

Eligibility

  1. This policy shall come into effect on the date of its notification in the GoMP official gazette and will remain in force till it is amended or superseded by the Government.
  2. Investors shall have to register their proposal with the Single Window System developed by MPTRIFAC and obtain a registration number to avail incentives under this policy. This registration number will be trackable online, so that investor will be able to locate the status of his proposal at any given time.
  3. Units for which any package of incentives has already been sanctioned under IPP 2010 or earlier policies or for which the Commercial Production has commenced before the notification of this policy, shall not be eligible for benefits under this policy but will be entitled for benefits under IPP 2010 or earlier policies, as the case may be
  4. Units commencing Commercial Production after notification of this policy, but within one year from the terminal date of Industrial Promotion Policy(IPP), 2010 (i.e. upto 31st Oct, 2016), shall be at liberty to choose a package of incentives under the current policy or IPP 2010. However, choice once made will be irreversible
  5. Units which are not covered by clause 3(iii) and 3(iv) shall be eligible to avail benefits only under this policy.

General provisions for availing concessions

  • The concessions is not applicable for units which comes under the category of ineligible industries as mentioned
  • Under this policy it will be mandatory for beneficiary units to provide 70% of its total employment to the permanent residents of Madhya Pradesh and in that 70% employment, representation of SC, ST & Other Backward Classes, as per reservation declared by the State Government, will be mandatory also.
  • If any sick unit is revived during the policy period, it can avail the concession (as per eligibility) provided in the policy as per the package approved by the empowered committee.
  • The procedures for availing concessions will be detailed out in MSME Promotion Scheme 2019 in which detailed information of procedure, eligibility criteria, required documents for availing subsidy/incentive, limit of total assistance and terms & conditions for beneficiary units etc. will be included. Above scheme will be part of this policy.

Concessions

  1. Industrial Development Subsidy
  • Industrial development assistance to the new industrial units @40% on the eligible investment made by them in Plant & Machinery and building. This assistance shall be disbursed in 4 equal annual instalments.
  • The cost of building shall not be more than 100% of the cost of Plant and machinery for the purpose of calculating the assistance.
  • Additional Industrial Development Subsidy of 2% per year (for four years) to the industrial units for exporting more than 25% and up to 50% of their total sales; Additional Industrial Development Subsidy of 3% per year (for four years) to the industrial units for exporting more than 50% of their total sales.
  1. Reimbursements for Patents
  • 100% reimbursement to a maximum of Rs.5lakhs to MSME units for domestic patents/PR registration during the policy period.
  • 100% reimbursement to a maximum of Rs.10lakhs to MSME units for international patents/PR registration during the policy period.
  1. Support in Quality Certification
  • Assistance up to 100% of the cost incurred on obtaining ISO/BIS/BEE certification subject to maximum limit of Rs.5lakhs to micro category unit.
  • For ZED Certification for improving brand recognition of MSME and reducing effect on environment : Government of India provides assistance @80%, 60% and 50% to micro, small and medium units respectively. GoMP will provide assistance up to 50% of the balance amount (10%, 20%, 25% of total cost respectively to micro, small and medium units)
  • For obtaining quality certification exclusively for export, during policy period, which made MSMEs of manufacturing sector of the state, eligible to export in USA/ European Union/Other OECD countries: Assistance up to 50% of the cost incurred on obtaining these certification subject to maximum limit of Rs.25lakhs.
  • MSMEs, who have commenced production before this policy but obtain certification within this policy period, shall also be eligible to avail reimbursement under this policy.
  1. Financial Assistance for Infrastructure Development
  • 50% assistance max Rs.25lakhs to the small and medium new industrial units, established in private or undeveloped Govt. land, for developing infrastructure up to their premises.
  • 50% reimbursement max of Rs. 25lakhs for the establishment of an effluent treatment plant (ETP) by the industrial unit.
  • 50% reimbursement up to a maximum of Rs.100lakhs for the establishments of an Common effluent treatment plant by a group (minimum 5) of industrial units.
  • 50% financial assistance max of Rs.250lakhs to the Developers for industrial area/flatted industrial complex in private sector.
  • 50% financial assistance max Rs.50lakhs as reimbursement towards the agency doing infrastructure development for strengthening the MSME cluster working in private land.

Expansion/Diversification/Technical up-gradation

  1. Established micro, small and medium industrial units which undertakes expansion will be eligible for assistance/facilities at par with new industrial units on their additional eligible investment.
  2. Established micro scale industrial units, which invest additional Rs.10lakhs or more in plant & machinery, shall be eligible for assistance/facilities at par with new isndustrial units.
  3. Established small scale industrial units, which invest additional Rs.25lakhs or more in plant & machinery, shall be eligible for assistance/facilities at par with new industrial units.
  4. Established medium scale industrial units, which invest additional Rs.100lakhs or more in plant & machinery, shall be eligible for assistance/facilities at par with new industrial units.
  5. If total investment in plant and machinery became more than Rs.15crores after expansion/diversification/technical upgradation, then the unit will not be eligible for assistance/facilities under the policy.

Creation and maintenance of improved infrastructure facilities

  1. The Department will increase the “Land Bank” of Government Land for future development of Industrial Areas/Parks/Estate exclusively for MSME units.
  2. GoMP shall establish dedicated MSME parks in the districts where there are ample opportunities of MSME development
  3. Department will encourage the industrial areas in private sector.
  4. Special focus and thrust shall be given to creation of flatted structure in industrial area on PPP mode.
  5. Online Land Application and Allocation System shall be made easier and user friendly.
  6. State Govt. shall come up with new ‘Industrial and Allotment Rules’. 10 percent plots will be reserved in the Department industrial area for the units owned by Scheduled Castes, Scheduled Tribes and OBC category.

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