Central & State Government’s Incentives Schemesshodhganga.inflibnet.ac.in/bitstream/10603/74769/9/09_chapter2.pdfUnder this scheme eligible manufacturing units are provided financial

42

Chapter - II

Central & State Government’s Incentives Schemes

This chapter has been divided into two sections i.e., (a) Central Government’s

Incentives Schemes (b) State Government’s Incentives Schemes. The government has

been trying for balanced industrial development and dispersal of industries by inducing

the entrepreneurs in various forms. Since 25th September, 1964 government of

Maharashtra giving various incentives and subsidies to notified industrially backward

areas entrepreneurs. Incentives are a driving force which encourages the entrepreneur to

undertake industrial activity in backward areas.

As per the American heritage dictionary, the definition of subsidy is:

“1. Monitory assistance granted by the government to a person or a group in support of

an enterprises regard as being in public interest. 2. Financial assistance given by one

person or a government to another. 3. Money formerly granted to British crown by

Parliament”.

Barron Business Dictionary subsidy is to be defined as “ Payment or other

favorable economic stimulus (such as remission of taxation) given by government to

certain individuals or group of economic entity, usually to encourage their continued

existence, growth, development and profitability.”

A subsidy (also known as sub venation is a form of financial assistance paid to a

business or economic sector). Most of subsidies are made by the government to producer

or to distributor in an industry to prevent the decline of that industry e.g. as a result of

continuous unprofitable operation or increase in a prices of its product or simply to

encourage it higher more level (as in the case of wage subsidy) 1.

“ A subsidy is money given by a government to help support a business or a

person the market does not support” 2 .

In the United States, Congress can tax to provide for general welfare. It also has

power to coin money ad regulate its value.

In United Kingdom, the British Parliament took away to King’s Authority to tax

and gave him a tax base subsidy to leave on.3

Types of Subsidies: - There are many different ways to classify subsidy such as reason

behind them, the recipient of subsidy, the source of funds (Government, Consumer,

General Tax Revenue, Direct & Indirect Tax, Fiscal & Monitory Benefits, etc). In

43

economics, one of the primary way to classify subsidies is means of distributing the

subsidies.

In 16th Century the subsidy refer to taxation, for example, the tax introduced in

England by Thomas Wesley in 15134

(i) Interest Free Loans

(ii) Exemption from taxes i.e.

a) Income Tax

b) Sales Tax

c) Property Tax

d) Stamp duty

(iii) Concessions :

a) Land & Building

b) Raw Material

c) Water

d) Excise

(iv) Provision of seed capital

(v) Readymade Sheds

(vi) Special Incentives to NRIs, Woman Entrepreneurs

(vii) Special Facilities for import of raw material

(viii) Price preference to SSI Units

The Scheme of subsidies consists of

1) Capital Investment Subsidy

2) Interest Subsidy

3) Transport Subsidy

4) Subsidy for feasibility studies

5) Subsidy for handloom and other traditional industries

6) Export-import subsidies

7) Subsidy for power Generation, R & D Programme

8) Subsidy for quality and standard improvement etc

a) Central Government Incentives Schemes:-

(1) Prime Minister’s Employment Generation Programme: This scheme was

announced by Central Government 15th August, 1993. The scheme provided subsidy

equivalent to 25% of cost of project and 35% of cost of project for entrepreneurs of

44

urban area and rural area respectively. The initial investment required from beneficiary is

5% of project cost and balance 95% from bank loan. The eligible criteria for this scheme

are:-

i) Any individual, about 18 years of age

ii) There will be no income ceiling for assistance for setting up projects under

PMEGP.

iii) For setting up of project costing above Rs. 10 lakh in the manufacturing sector and

above Rs. 5 lakh in the business/service sector, the beneficiaries should possess at

least VIII standard pass educational qualification.

iv) Assistance under the Scheme is available only for new projects sanctioned specially

under PMEGP

v) Self Help Groups (including those belonging to BPL provided that they have not

availed benefits under any other Scheme) are also eligible for assistance under

PMEGP.

vi) Institutions registered under Societies Registration Act, 1860;

vii) Production Co-operative Societies, and

viii) Charitable Trusts

ix) Existing Units (under PMRY, REGP or any other scheme of Government of India

or state Government) and the units that have already availed Government Subsidy

under any other scheme of Government of India or State Government are not

eligible.

Monitory Limits of the Scheme:

i) The maximum cost of the project/unit admissible under manufacturing sector is Rs.

25 lakh.

ii) The maximum cost of the project/unit admissible under business/service is Rs. 10

lakh.

(2) Central Subsidy Scheme: This scheme was introduced by Central Government on

26th August, 1971. The scheme provided subsidy equivalent to 10% of fixed capital

investment of eligible units in different category of districts are entitled to get the benefit

of subsidy according to the following way.

i) Under this scheme the Nucleus Plants in ‘A’ category districts are entitled 25%

subsidy of their capital investment subject to the ceiling limit of Rs. 25 lakh.

ii) Under this scheme the Nucleus Plants in ‘B’ category districts are entitled 15%


45

iii) Under this scheme the Nucleus Plants in ‘A’ category districts are entitled 10%


Eligibility Criteria: SSI units

(3) Transport Subsidy Scheme:- This scheme was announced by Central Government

in July 1971 and has been extended from time to time. It covers the states - Arunachal

Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura as well as

Jammu & Kashmir, Himachal Pradesh, Sikkim, Andaman & Nickobar Islands and

Lakshadweep, eight hill districts of Uttar Pradesh / Uttarakhand (Almora, Chamoli,

Dehradun, Nainital, Pauri Garhwal, Pithoragar, Tehri Garhwal and Uttar Kashi), and

Darjeeling district of West Bengal.

Under the scheme, subsidy ranging between 50% to 90% is admissible on

transportation cost incurred by an entrepreneur on a movement of raw materials and

finished goods from the designated rail-head/parts up to the location of industrial unit's

vice-versa for a period of five years from the date of commencement of commercial

production. This scheme is not applicable to Maharashtra State.

(4) Central Assistance for Infrastructural Development in ‘No Industry

District/ Growth Centers in Back Ward Areas’ : The Central government assists the

State Government in building up infrastructural facilities in one or two growth centers in

no industry district. This scheme was started in June 1988. Central Government had

announced 71 growth center were proposed to set up throughout the country which is

basic infrastructural facilities such as power, water telecommunication and banking to

enable them to attract industries. The financing pattern of growth center is according to

the following table.

Table No.2.1 - Infrastructural Development in ‘No Industry District/ Growth Centers in Back Ward Areas'

Sr. No. Particulars Amt. in Rs. 1. Central Government (equity) Rs. 10 Crore 2. State Government (equity) Rs. 5 Crore 3. All India Financial Institutions (including Rs. 2

Crore as equity) Rs. 4 Crore

4. Nationalized Banks Rs. 1 Crore 5. Market borrowings Rs. 10 Crore Total Rs. 30 Crore

Source: Book-Central and State Government Incenttives for industries, p.33

In the case of States/Union Territories it may not be necessary to invest Rs. 25-30

crore on each center. The volume of investment will be determined taking into the

46

account their special condition. The scheme is applicable to Maharashtra State also and

has 5 growth centers respectively as under - Akola, Chandrapur, Dhule, Ratnagiri,

Nanded.

(5) National Equity Fund Scheme, 1987: The Central Government announced National

Equity Fund Scheme in 1987. Under this scheme eligible manufacturing units are

provided financial assistance in the form of seed capital located in a small town having

population less than 5 lakh.

This scheme covers the tiny and SSI units having capital of Rs. 5 lakh. The

maximum limit of soft loan assistance is Rs. 75000 per unit. The repayment period of

loan is 7 years and moratorium period 3 years. NEFS is being administrated by IDBI and

finance is made available by the nationalized Banks.

(6) The Seed Money Assistance Scheme for unemployed persons:

This scheme was introduced by Central Government in the year 1973, with a

view of to provide self employment to educated youth and employment to others. The

seed money assistance is given to educated unemployed youth to setup his business or

industry. If the cost of project is above Rs. 10 lack, seed money assistance is available

Rs. 150000.

If the cost of project is below Rs. 10 lack the seed money assistance is given as

below mentioned. For open category person 15% of project cost but for an economically

backward person 22.5% of project cost and for SC, ST candidate 22.5% of project cost.

From 1st October, 1993, the scheme is being implemented by DIC. The marginal limit of

the project must be below 25 lack.

(7) Margin Money Loan Scheme:

This scheme was introduced by Central Government in 1977. The district

industrial centers have been implementing the scheme since its inception. The scheme is

applicable to tiny sectors only which is having fixed asset investment up to 2 lakh. The

eligible people from open category are entitled to get 20% of the project as margin

money but subject to ceiling limit of 40000. the eligible candidate from SC ST category

are entitled to get 30% of the project cost as seed money assistance but subject to the

ceiling of Rs. 60000. The margin money loan carries interest @ 10% p.a. repayable

within 8 years for term loan and 5 years for working capital loan.

47

Chart I : for deduction u/s. 80-ia in case of Infrastructure development undertakings/enterprises:

(Assessment year 2010-11 and onwards) Nature of business activity Period of

commencement of operation

No. of consecutive assessment years for

which deduction admissible

Rate of deduction from profits & gains

@

1. An enterprise carrying on the business of : (a) developing or (b) operating & maintaining or (c) developing, operating & maintaining any infrastructure facility which fulfills both the conditions prescribed in sec. 80-IA(4)(i)(a)&(b)

On or after 1-4-1995 10 out of 15 initial assessment years

100% for 10 consecutive years

2. an undertaking providing basic or cellular telecommunication services, including radio paging, domestic satellite service, network of trucking, broadband network & internet services [sec.80-IA (4)(ii)]

1-4-1995 to 31-3-2005

10 out of 15 initial assessment years

100% for first 5 cons. Asst. years & 30% for the remaining 5years

3. An undertaking which develops, develops or operates or maintains & operates a notified industrial park or special economy zone in accordance with notifies scheme [Sec. 80-IA(4)(iii)]

For industrial park, 1-4-1997 to 31-3-2011; For economic special zone, 1-4-1997 to 31-3-2006


100% for 10 consecutive assessment years

4. An undertaking setup in any part of India for generation or generation and distribution of power [Sec. 80-IA(4)(iv)(a)]

1-4-1993 to 31-3-2011



5. An undertaking which transmission or distribution by laying a network of new transmission lines. Deduction is allowable only in relation to the profits derived from laying of such network of lines for transmission or distribution [Sec. 80-IA(4)(iv)(b)]



6. An undertaking which undertakes substantial renovation and modernization of the existing network of transmission or distribution lines [Sec. 80-IA(4)(iv)(c)]


7. An undertaking owned by an Indian company formed before 30-11-2005 & notified before 31-12-2005 and set up reconstruction or revival of power generating plant, subject to condition [Sec. 80-IA(4)(iv)]

Generate or transmit or distribute power before 31-3-2011



48

Chart II : for deduction u/s. 80-ib in case of Industrial undertakings other than infrastructure d evelopment undertakings:

(Assessment year 2010-11 and onwards) Nature of business activity Period of

commencement of operation

No. of consecutive assessment years for

which deduction admissible

Rate of deduction

from profits & gains @

1. A Small Scale Industrial undertaking manufacturing or producing articles or things or operating its cold storage plant

(other than 2 to 5 below) [Sec. 80-IB(3)(ii)]

1-4-1995 to 31-3-2002 12 (for co-op. society) & 10 (for others)

25% (30% in case of company) for 10 (12 in case of co-op. society) initial asst. years

2. An industrial undertaking in an industrially backward

States specified in the Eighth Schedule, manufacturing or

producing articles or things or operating its cold storage plant(s) [Sec. 80-IB(4)]


100% for 5 initial asst. years & 25% (30% in case of company) for the remaining asst. years

3. An industry referred to in 2 above if located in notified* North-Eastern Region [2nd

provision to [Sec. 80-IB(4)]

1-4-1993 to 31-3-2004 10 (in all cases)

100% for all 10 initial asst. years

4. An industrial undertaking manufacturing or producing

articles or things or operating its cold storage plant(s) located

in notified industrially backward district of category

A [Sec. 80-IB(5)(i)]



5. An industrial undertaking manufacturing or producing

articles or things or operating its cold storage plant(s) located

in notified industrially backward district of category

B [Sec. 80-IB(5)(ii)]



6. An industrial undertaking deriving profit from the

business of setting up and operating a cold chain facility for agricultural produce [Sec.

80-IB(11)]



49

7. An undertaking which has begun or begins commercial

production of mineral oil located in any part of India

[Sec. 80-IB(9)(ii)]

On or after 1-4-1997 7 (in all cases)


8. An undertaking which begins refining of mineral oil

[Sec. 80-IB(9)(iii)]

1-4-1998 to 31-3-2012 7 (in all cases)


9. An undertaking which begins commercial production of natural gas in blocks [Sec.

80-IB(9)(iv)/(v)]

On or after 1-4-2009 7 (in all cases)


10. An undertaking developing and building house projects approved before 31-3-

2008 by a local authority subject to the condition that : (a) the size of plot of land has

a minimum of 1 acre; (b) residential unit has a maximum

built up area not exceeding 1000 sq. feet where such unit is situated within the cities of Delhi or Mumbai or within 25 km from its municipal limits and 1500 sq. meters at any

other place; (c) not more than one residential unit in the

housing project (HP) is allotted to any person not being a

individual, no other residential unit in such HP is allotted to

the individuals or the spouse or the children of individual or such HUF in which the such individual is the karta & any

other person representing individual, the spouse or the

minor children of such individual or such HUF in

which such individual is the karta; and (e) an undertaking which executes the HP as a

work contract awarded by any person (including Central &

State Govt.) is not eligible for deduction u/s 80-IB (10) [Sec.

80-IB(10)]

Dev. & const. of housing project (HP)

commenced on or after 1-10-1998 and

completed such const. in a case where a HP has been is approved by the local authority (LA) : (a) before 1-4-04 on or before 31-3-08 (b) on or after 1-4-

04 within 4 years from the end of the

financial year in which the HP is

approved by the LA

--- 100% of the profits derived in any previous years relevant to any assessment year from such housing project

50

Section 80-IAB :-

Deduction in respect of profits & gains by and undertaking or enterprises

engaged in development of special economic zones under section 80-IAB of Income Tax

Act, 1961, from the assessment year 2007-08 to 2011-12 for booming special economic

zones. This deduction inserted where the gross total income of the assessee, being a

developer (developer means person who or a State Government, which has been granted

by Central Govt. letter of approval under section 3(10) of Special Economic Zone Act,

2005) includes profits and gains derived by an undertaking or enterprises after 01-04-

2005 a deduction will be allowed @ 100% of profit & gains from such business for ten

consecutive assessment years or in option to claim any ten consecutive years from

beginning to fifteen years. If the above business is transferred to other than other claims

these deductions.

Section 80-IC :-

Special provisions in respect of certain undertaking and enterprises in North-

Eastern States (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland,

Tripura) and Sikkim, Himachal Pradesh/Uttaranchal deduction is allowable in respect of

profit & gains derived by undertaking or enterprises in these states subject to specified

condition. In the case of an undertaking or enterprises in the State of Sikkim or North

East is 100% of such profits & gains for ten assessment years and in the case of

Uttaranchal and Himachal Pradesh is 100% of such profit & gains for five assessment

years and thereafter 25% (30% for the companies for next five assessment years of the

profit & gains).

Section 80-ID :-

Deduction in respect from profit & gains of undertaking engaged in the business

of hotel i.e., two staff, three staff or four staff as classified by Central Government. In

specified area i.e., National Capital Territory of Delhi and Dist. Of Faridabad, Gurgaon,

Gautam Buddha Nagar and Gaziabad and World Heritage District Site i.e., Agra,

Jalgaon, Aurangabad, Kanchipuram, Puri, Bharatpur, Chatrapur, Tanzaur, Bareli, 24

Paragana, Chimoli, Raisen, Gaya, Bhopal, Panchamahal, Kamru, Golpara, Naigaon, Goa,

Darjiling and Nilgiri. Percentage of deduction is as under :- @ 100% o profit & gains

derived from undertaking and from the five consecutive assessment year starting the

initial assessment year.

51

Section 80-IE:-

Special provision in respect of certain of undertaking in North-East States

(Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura) to

accelerating industrialization in North-East States the Central Government initiated

number of phases one of them is give 100% deduction from profit & gains derived by an

undertaking (with specified conditions) for ten consecutive assessment years beginning

from initial assessment years. Undertaking must to manufacture or to produce any

eligible article or thing, to undertake substantial expansion or to manufacture or to

produce any eligible article or thing or to carry any eligible business (eligible business

definition also provided by Government).

Section 80-JJA :-

Deduction in respect of profit & gains from business of collecting and processing

biodegradable waste available @ 100% of such profit & gains for a period of five

consecutive assessment years starting with relevant previous years. Period for deduction

assessment years 2007-08 eligibility criteria from the business of collecting and

processing or treating of bio-degradable waste for generating power or producing bio-

fertilizers, bio-pesticides or other bio-logical agents or for producing bio-gas or making

pellets or briquettes for fuel organic manure, there shall be allowed.

Section 80-JJAA :-

To generate employment, Government of India sanctioned deduction of 30% of

additional wages (i.e., difference between wages paid to means wages paid to new

workman in excess of 100 workman and for existing undertaking it is above 10% of

existing workman payment) paid to the new regular workman employed in a previous

year. Regular workman means workman of section 2 (S) of Industrial Dispute Act, 1947.

Central Excise Act, 1944 & Central Excise Rule, 1944:-

Every manufacturer of excisable goods is required to get registered with central

excise department before starting production with specified period for each of production

unit. However, central excise duty concession has been given to units in small scale

sectors based on their turnover so as to faceplate those to graduate them availing this

concession in graded manner. The notification was published by Central Government

notification number 8/2003 and 9/2003 dated on 1st of March, 2003.

52

SSI units whose turn over less than 4 crores are eligible for concession. If SSI

unit does not avail CENVAT on inputs, the turn over of 150 lakhs is fully exempt. If SSI

units avails CENVAT on inputs, it has to pay full normal duty on all its clearance. It

means SSI has been get two types of exemption.

1. Unit can avail full exemption of Rs. 150 lakhs and pay normal duty thereafter such

units can avail CENVAT credit on inputs only after reaching turn over of Rs. 150 lakhs

in the financial year.

2. Unit intending to avail CENVAT credit on inputs on all its turn over has to pay normal

duty without any concession. These above concessions are available only if the SSI units

get fulfilled specified conditions.

Land At Concessional Rate:

Maharashtra Industrial Development Corporation (MIDC) established by an Act

Maharashtra Industrial Act, 1961 and come into existence on 1st of August, 1962 with

the objective of accelerate the process of industrialization, to infrastructural help to

industries accelerating industrialization in the Taluka level area also. MIDC has been

playing very vital role for providing infrastructural facilities (i.e., land at very

concessional rate, water at concessional rate and road, lights and other infrastructural

facilities at concessional rate). Besides the above State Government has providing co-

operative industrial estates scheme for co-operative industrial estates member have to

contribute 20% and State Government has contributing 20% and the 60% amount will be

provided by Government undertaking for industrial estates.

Ministry of MSME

1) Scheme of Fund for Regeneration of Traditional Industries (SFURTI) through

KVIC and Coir Board: - The scheme was started on in the year of 2005.

Funding on following points :- a) Technology Up gradation, b) Setting up of

Common Facility Centers (CFEs), c) Development of new products & designs, d)

New/improved packaging, etc., e) Market promotion activities, f) Other activities

identified y the Implementing Agency (IA) as necessary for the development of the

cluster.

53

Subsidies or funds up to the extent of: - 75% for CFC, technology up-gradation,

product development and 100% for Capacity building, market development with

component wise ceiling.

Expenditure incurred by Ministry of MSME for the year 2012-13 where 52.42 crore :

2) Scheme of Surveys, Studies and Policy Research: - The scheme was started on in

the year of 2005.

Funding on following points :- a) Data collection on various aspects and features of

MSME, b) Study and analysis of constrains and challenges faced by the MSME

Usage of the result of surveys and analytical studies for policy research and

designing appropriate strategies and measures of intervention by the Government.

Subsidies or funds up to the extent of: - Open ended: no specific limit stipulated.

The scheme surveys studies and policy research expenditure incurred by MSME

Ministry for the year 2011-12 Rs. 1.13 crores and 2012-13 budgeted estimate were

Rs. 1 crore.10

3) International Cooperation Scheme: - The scheme was started on in the year of

2005.

Funding on following points: - Components as air face venue/ stall/ space rent, local

travel, publicity/ advertisements, resource persons etc for the following activities :-

a) Deputation of MSME Business Delegations to foreign countries. b) Participation

in international Exhibitions/Trade Fairs/Buyer-Seller Meets. c) Participation in

international exhibitions/ trade fairs held in India, Organization of international

Conferences/ Seminars in India

Subsidies or funds up to the extent of:- The quantum of financial assistance will be

decided on the basis of the budget on the basis of the budget estimate & the eligible

items of expenditure subject to the following limits in respect of international and

domestic events :- a) International Events: Rs. 25 lakh per event Domestic Events:

Rs. 12 lakh per event, b) Financial assistance restricted to two events in a financial

year.

Expenditures incurred during the year 2011-12 Rs. 1.62 crores and budgeted estimate

for 2012-13 Rs. 4 crore.

54

Development Commissioner (MSME)

4) Scheme for capacity building, strengthening of database and advocacy by

Industry/Enterprise Associations and for holding

Seminars/Symposiums/Workshops by the Associations. :-

Funding on following points :- a) Secretarial and advisory/extension services to

selected national Associations, b) Modernization of the facilities and equipment and

training of personnel, etc, c) Holding Seminars/Symposiums/Workshops on various

issues concerning the MSME Sector, d) Association to provide regular manpower,

office space and make equivalent contribution.

Subsidies or funds up to the extent of: - 50% of the cost of modernization and

equipments with a ceiling of Rs. 5 lakhs (association is required to provide the

regular manpower and office space at their own cost) Rs. 2 lakhs for organizing

seminars etc for national level and Rs. 1 lakh for regional associations.

In this regard Shree Krishan Duhan (2014), suggested that need of modern

technology key issue of more funds to scheme.12

5) Micro & Small Enterprise Cluster Development Programme (MSECDP):- The

scheme was started on in the year of 2003.

Funding on following points: - a) Technology up gradation, b) Quality up gradation

and certification, c) Credit facilitation, d) Marketing support, e) Collective capacity

building of cluster units, f) Common Facility Centers, g) Testing and Training

Centers, h) Organized procurement and marketing, i) Continuous skill up gradation,

j) Government grant to be utilized towards plant and machinery only and other

components to be funded from SPV’s contributions.

Subsidies or funds up to the extent of :- a) developmental CFCs : break even

beyond years (testing lab, design centre, R&D centre etc)- 70% of Project cost not

exceeding Rs 7 Cr. b) Quasi Developmental CFCs: individual gains nor clearly

perceived (CETP, SCX, Common logistics centre etc)- 50% of Project cost not

exceeding Rs. 5 Cr., c) Commercial CFCs: immediate commercial viability

(marketing/selling centre, raw material depot, common processing centre etc) 30% of

Project cost not exceeding Rs. 3 Cr, d) Additional 10% grant for all women/ village

or micro/small or artisan enterprise based clusters Rs. 10 lakh for softer

interventions.

55

6) Market Development Assistance Scheme for SSI exporters (SSI-MDA):- The


Funding on following points: - Airfare, space rent, shipping cost of exhibits for

participation in international trade fairs.

Subsidies or funds up to the extent of :- a) 75% of air fare with a ceiling of

Rs.40,000/- (Rs.60,000/- for Latin American Countries) for small manufacturing

enterprises and 90% with a ceiling of Rs.40,000/- for Micro manufacturing

enterprises., b) 60% subsidy on space rent. c) Subsidy of Rs. 15,000/- for the

shipping cost of exhibits for display.

Total subsidy not to exceed Rs. 1.25 lakh for manufacturing and Rs. 1.50 lakh for

micro manufacturing enterprises

In this regard committee of ministry of finances (July 2013) recommended double

income tax deduction or marketing expenses.13

7) Integrated infrastructure Development (IID) subsumed under (MSECDP) :-

Funding on following points :- Setting up new clusters/industrial estates,

Infrastructural facilities like power distribution network, water, telecommunication,

drainage and pollution control facilities, roads, banks, raw materials, storage and

marketing outlets, common service facilities and technological back up services etc.

Subsidies or funds up to the extent of: - Rs. 2 Cr or 40% of the Project cost

(excluding land) whichever is lower.99

In this regard report on MSME suggested that "there is a need of FICCI Linkers and

co-ordination between government, industry and academy.14

NMCP Schemes Implemented by DC (MSME)

8) Building awareness on Intellectual Property rights :-

Funding on following points :- a) Awareness/ Sensitization Programmes, b) Pilot

Studies, c) Interactive Seminars / workshops, d) Short term/ long term Specialized

Training., e) Patent/ GI Registration., f) Setting up of ‘IP Facilitation Centre for

MSME’, g) Interaction with International Agencies. h) Domestic Intervention

International Exchange Programme.

Subsidies or funds up to the extent of :- a) Awareness/ Sensitization Programmes:

Rs. 1 lakh, b) Pilot Studies: Rs. 2.5 lakhs, c) Interactive Seminars / Workshops: Rs.

2 lakhs., d) Short term Specialized Training: Rs. 6 lakhs., e) long term Specialized

56

Training: Rs. 45 lakhs., f) Patent/ GI Registration: Rs: 0.25 lakhs for domestic patent,

Rs. 2 lakhs for foreign patent and Rs. 1 lakhs for GI registration., g) Setting up of ‘IP

Facilitation Centre for MSME’: Rs. 65 lakhs., h) Interaction with International

Agencies., i) Domestic Intervention : Rs. 5 lakhs.

International Exchange Programme: Rs. 7.50 lakhs.

On the advice of senior consultant, MSME Ministry on 01.01.2012, Facilitated 24

facilitation center.

9) Setting up of New Mini Tool Rooms under PPP Mode :-

Funding on following points: - a) Tool Room facilities. b) Tool room related

training facilities.

This shall include cost of land, building, equipment etc.

Subsidies or funds up to the extent of: - A maximum of 40% of the Project cost not

exceeding Rs. 9.00 Crore.

10) Enabling Manufacturing Sector be competitive through Quality Management

Standards and Quality Technology Tools :-

Funding on following points :- a) Introduction of Appropriate Course Modules For

Technical Institutions., b) Organizing Awareness Campaigns for Micro And Small

Enterprises., c) Organising Competition – Watch (C-Watch)., c) Implementation of

Quality Management Standards And Quality Technology Tools in Selected Micro

And Small Enterprises.

Monitoring International Study Missions.

Subsidies or funds up to the extent of: - a) For component a: Rs. 425 lakh/ yr (

composite for all sub activities)

b) For component b: Rs. 1.25 lakh per programme (75% for micro and 50% for SMEs

resp)

o For component c:

o Study: Rs. 2.5 lakh

o Exposure visit: Rs. 7.5 lakh (75% of cost)

o Procurement of samples: Rs. 2.5 lakhs (50% of cost)

o Product development: Rs. 5 lakhs ( ˜ 60% of cost)

o Popularizations of improved product: Rs. 1.5 lakhs (75% of cost)

c) For component d: Rs. 2.5 lakh/ unit (100 units to be assisted)- (75% for Micro and

50% for SMEs resp)

57

For component e: Rs. 2.5 lakh/ unit (20 units to be assisted) (75% for micro and 50%

for

11) Support for Entrepreneurial and Managerial Development of SMEs: Through

Incubators :-

Funding on following points: - Technology fee, common facilities and hiring/lease

of machinery for setting up of Business Incubators.

Subsidies or funds up to the extent of: - Rs. 62.5 lakh per Business incubator (15-

25% of the cost of intervention to be borne. by MSEs).

12) Lean Manufacturing Competitiveness Scheme under NMCP: - The scheme was

started on in the year of 2009.

Funding on following points: - a) Awareness programmes., b) Implementation of

lean manufacturing techniques ( primarily cost of consultant).

Subsidies or funds up to the extent of: - 80% of the cost incurred on Lean

manufacturing consultant in 4 equal installments released as reimbursements.

13) Scheme for Integrated Textiles Park (SITP):- The scheme was started on in the

year of 2005.

Funding on following points: - a) Physical infrastructure, b) Buildings for common

facility centers. c) Factory buildings.

Subsidies or funds up to the extent of: - Limited to 40% of the project cost subject

to a ceiling of Rs. 40 crore.

14) Integrated Handloom Cluster Development Programme :-

Funding on following points :- a) Common facility Centre., b) Setting up of

Showroom., c) Organisation/participation in Exhibitions/Fairs , Buyer-Seller Meets.,

d) Publicity., e) Developing FAQs., f) Declaring the Cluster as Legal entity., g)

Capacity building & networking., h) Strengthening of local associations., i)

Backward – forward linkages., j) Brand Building., k) Organisations of at least 20

workshops and seminars, demonstrations., l) Market Research & Technical

Consultancy., m)Engaging Designer., n) Institutional cost of implementing agency,

Enterprise up-gradation programme, cluster visits, development of consortium,

personal counseling, intervention in the areas of occupational health/ergonomics etc.

Subsidies or funds up to the extent of: - Budget per cluster is Rs.2 crore by way

of 100% Central grant,

The administrative charges, which would include fee of both NRA as well as IA will

not exceed 7% of the project cost.

58

15) Baba Saheb Ambedkar Hastshilp Vikas Yojana (AHVY) :-

Funding on following points :- a) Organisation of artisans clusters into SHGs/

Cooperatives., b) Skill up gradation through design and technology intervention., c)

Infrastructure support for improved quality and productivity., d) Credit facilitation.,

e) Marketing support.

Subsidies or funds up to the extent of:- Up to 100% for most of the components

with specific ceiling for each of the component.

16) Special Handicraft Training Project :-

Funding on following points: - Raw material, wage compensation, fee and boarding

lodging of trainer, tool kits.

Subsidies or funds up to the extent of:- Rs. 3.85 lakh for a 6 month training to 10

artisans.

Ministry of Commerce (including Department of Industrial Policy &

Promotion)

17) Assistance to States for developing Export Infrastructure and Allied Activities

(ASIDE) :-

Funding on following points :- a) Creation of new Export Promotion Industrial

Parks/Zones (including Special Economic Zones (SEZs)/Agri-Business Zones) and

augmenting facilities in the existing ones., b) Setting up of electronic and other

related infrastructure in export conclave., c) Equity participation in infrastructure

projects including the setting up of SEZs., d) Meeting requirements of capital outlay

of EPIPs/EPZs/SEZs., e) Development of complementary infrastructure such as

roads connecting the production centers with the ports, setting up of Inland Container

Depots and Container Freight Stations., f) Stabilizing power supply through

additional transformers and islanding of export production centres etc., g)

Development of minor ports and jetties of a particular specification to serve export

purpose., h) Assistance for setting up common effluent treatment facilities for which

guidelines are placed at Annexure l., i) Projects of national and regional importance.

Subsidies or funds up to the extent of :- In case of non-government agency,

funding for project to be on cost sharing basis Extent of assistance not specified.

In this regard ministry of commerce and industry has released a grant of

Rs.132.98,116.62, 82.30 crores for the year 2010-11, 2011-12, 2012-13.16

59

18) Industrial Infrastructure Up gradation Scheme (IIUS) – recast: - The scheme

was started on in the year of 2009.

Funding on following points :- a) Physical infrastructure., b) Common Facilities for

fuel/ gas supply system., c) Effluent treatment., d) Solid waste disposal., e) Product

design., f) Captive power generation., g) Information and Communication

Technology Infrastructure., h) R&D infrastructure., i) Quality Certification and

Benchmarking Centre., j) Common Facilities Center., k) Information dispersal/

Benchmarking Center., l) Information dispersal/ international Marketing

Infrastructure., m) ICT-induction & process re-engineering & management

consultancy service center n) any other physical infrastructure.

Subsidies or funds up to the extent of :- 75% of the project cost subject to a ceiling

of Rs. 60 crore, Grant for road, drainage & water supply system to be restricted to

25% of the total grant

Administrative Expenses to be restricted to 5% of the total grant.

19) Revised Market Access Initiative Scheme: - The scheme was started on in the year

of 2007.

Funding on following points:- a) Undertaking marketing projects abroad., b)

Capacity building., c) Support for Statutory Compliance., d) Market/Export

Potential/WTO/RTA related studies., e) To generate focused projects leading to

substantial improvement in market access., f) Developing Foreign Trade Facilitation

web Portal (data bases and systems for dissemination of otherwise bo Indian

Exporters);., g) To support Cottage and handicrafts units;.

Subsidies or funds up to the extent of: - The components are further divided into

several sub components and funding assistance could be anywhere in the range of 50-

100% with absolute ceilings. The eligible/ beneficiary organizations have to bear the

remaining cost for each intervention. In this regard Government of India released the

following expenditure and amount of Rs.110, 150, and 120 crores for the year 2010-

11, 201-12, 2012-13 respectively.17

20) Market Development Assistance Scheme: - The scheme was started on in the year

of 2006.

Funding on following points :- a) Export promotion activities abroad., b) Export

promotion activities within India., c) Focus export activities within India., d) Focus

export promotion programmes in specific regions abroad like FOCUS (LAC), Focus

60

(Africa), Focus (CIS) and Focus (ASEAN + 2) programmes. Marketing promotion

efforts abroad.

Subsidies or funds up to the extent of: - Assistance for most of the components is

around 60% of the total cost with absolute ceilings. Part of airfare, stall rentals,

publicity, and buyer seller meets; seminars, studies etc are eligible for funding.

For encouraging the entrepreneurs Ministry of Commerce and Industry released the

assistance outlay an amount of Rs.56 crores, 50 crores and 39.50 Crore for the year

2010-11, 2011-12, 2012-13 up to 12th February 2013.18

21) HRD Mission for Leather :-

Funding on following points: - Training under the following three categories:

Primary: - a) Flaying, b) Preservation, c) Tanning, d) Finishing, e) Waste Treatment,

f) Footwear, g) Leather Garments, h) Leather Goods.

Secondary: - vocational qualification Tertiary Management training.

Subsidies or funds up to the extent of :- Total project cost to be co shared between

Gol and the industrial/ Govt (institution) partner in the ration 85:15 in case of

secondary and tertiary training.Gol share limited by following condition: Per person

cost of investment of Gol funds over three years should not exceed Rs. 400, Rs. 1000

and Rs. 2500 with an overall cap of Rs. 4 Cr, Rs. 4.5 Cr and Rs. 0.5 Cr for primary,

secondary and tertiary trgs. Hardware cost in case of govt/ established institutions

only will be funded with learner strength >20.

Ministry of Labour (Including Director General Empl oyment &

Training)

22) Modular Employable Skills (MES) under skill Development Initiative Scheme

(SDIS) :- scheme was started on in the year of 2007.

Funding on following points: - Training cost.

Subsidies or funds up to the extent of: - The following fee structure stands: Rs.500

per module for modules having duration upto 90 hrs, Rs. 1000 per module for

modules having duration from 91 to 180 hrs., Rs.1500 per module for modules

having duration from 181 hrs to 270 hrs , and Rs. 2000 per module for modules

having duration more than 270 hrs.

a) SC/ST to be given 25% concession in fee, b) Fee to successful candidates will be

refunded, c) For each candidate trained VTP will get Rs. 15/ per hr of trg., d) One

time of advance of Rs 3 lakh will also be given to VTP.

61

As per the annual report 2012-13 of Ministry of Labour and Employment in this;

regard they archived skill development program and employees covered as follows.

During the year 2009-10, 49 implemented centers and they covered 1.7 lakh

employees and in the years 2010-11, 68 implemented centers and 1.14 lakh

employees covered. In the year 2011-12 implemented centers are in numbers 60 and

employees covered are 1.57 lakh.19

23) Up gradation of Government IT Is through Public Private Partnership :-

Funding on following points :- a) up gradation of ITI as a whole., b) State owned

ITI and infrastructure is used Setting up of state steering committee and state

implementation cells and their expenses. Salaries and wages to be borne by state

Government.

Subsidies or funds up to the extent of :- a) Interest free loan up to Rs. 2.5 Cr., b)

Through not mandatory industry partner could contribute either financially or

through machinery., c) Loan has a moratorium period of 10 yrs after which has to be

paid in equal annual installments over twenty years time period.

Coir Board

As per the annual report of Ministry of small and medium enterprises Government of

India has incurred expenditure of Rs.1504.64 crores, 1289.00 crores and 1027.34

crores in the year of 2010-11, 2011-12, 2012-13 respectively for Ari division

(KVIC, COIR BOARD, MGIRI AND SFURTI).20

24) Rejuvenation, Modernisation and Technology Up gradation of the Coir

Industry :- scheme was started on in the year of 2007.

Funding on following points: - Work sheds and motorized rats for the spinning

sector and mechanized looms, for the weaving sector.

Subsidies or funds up to the extent of: - a) 40% or Rs. 80,000 per unit for spinning

Unit., b) 40% or Rs. 2, 00,000 per unit for tiny/ household weaving unit.

25) Scheme for Development of AYUSH Clusters: - scheme was started on in the year

of 2007.

Funding on following points :- a) Cost of Buildings, Physical infrastructure, plant

and machinery for undertaking:, b) Core Interventions such as those related to setting

up of common facilities for testing, certification, standardization, quality control and

other capacity building measures., c) Add On Interventions such as those related to

62

marketing/ branding, provision of general infrastructure to support production units

etc. Testing laboratory is a mandatory component.

Subsidies or funds up to the extent of: - The assistance would be restricted to 60%

of the Project Cost subject to a maximum of Rs 10.00 crores.

26) Assistance for Exchange Programme / Seminar / Conference / Workshop on

AYUSH :-

Funding on following points :- a) National conference / Workshops / Seminar

organized by Department of AYUSH., b) National Conference / Workshop /

Seminar organized by the State Government., c) National Seminar organized by

NGOs National Seminars or Workshops / Conference by eminent Institutions /

University.

Subsidies or funds up to the extent of :- a) For component a: Rs. 3.00-Rs. 5 lakhs.,

b) For component b: Up to Rs. 3 lakhs., c) For component c: Up to Rs. 1 lakhs., d)

For component d: Up to Rs. 2 Lakhs.

Ministry of Food Processing Industries

27) Mega Food Parks Scheme: - scheme was started on in the year of 2008.

Funding on following points :- a) Core Processing Facilities (Far m Proximate

Collection centers and Primary processing centers), b) Factory Buildings, c)

Enabling Basic Infrastructure, d) Non Core Infrastructure, e) Project Implementation

Expenses.

Subsidies or funds up to the extent of :- One time capital grant of 50% of the cost

subject to a maximum of Rs. 50 Crores in general areas and 75% of the Project cost

subject to a maximum of Rs. 50 Crores in difficult and hilly areas including North

East

Project cost is exclusive of land cost.

Up to the year 31st March 2014, Govt. of India has sanctioned 40 mega food park

project in principal and out of them 15 mega food park project has released grant of

an amount of Rs. 334.9crores.21

28) Scheme for Cold Chain, Value Addition and Preservation Infrastructure :-

Funding on following points:- a) Minimal Processing Centre at the farm level and

this centre is to have facility for weighing, sorting, grading waxing, packing, pre-

cooling, CA / MA cold storage, normal storage and IQF., b) Mobile pre-cooling vans

63

and reefer trucks., c) Distribution hubs with CA /MA Chamber/cold storage /

Variable Humidity Chambers, Packing facility, CIP Fog treatment, IQF and blast

freezing., d) Irradiation facility

Any two of the components from a, b or c should necessarily be set up as part of the

project. Subsidies or funds up to the extent of :- 50% the total cost of plant and

machinery and technical civil works in General areas and 75% for NE region and

difficult areas (North East including Sikkim and J&K, Himanchal Pradesh and

Uttarakhand) subject to a maximum of Rs 10 Crore.

In this regard Govt. of India in there 3 phase projects has released an amout of Rs.

31043.02 in lakhs up to the 31st March 2014.22

29) Scheme for Setting up/ up gradation of food testing laboratories :-

Funding on following points: - a) Laboratory equipments, b) Civil works.

Subsidies or funds up to the extent of :- a) 100% of equipment cost and 25% of the

cost of technical civil works for general areas and 33% for difficult areas in case of

Central / State Government and its organizations / Universities (including demand

universities), b) In case of all other implementing agencies/ private sector

organizations : 50% of cost of laboratory equipments and 25% of the cost of

technical civil works for general areas and 70% of cost of lab equipment and 33% of

technical civil works for difficult areas.

Grant is inclusive of cost of Programme Management Agency (5%).

30) Scheme for Promotional Activities :-

Funding on following points :- a) Seminars/ workshops, b) Studies/ surveys, c)

Exhibitions/ fairs, d) Study tours.

Subsidies or funds up to the extent of: - a) For component a; 50% of the cost up to

Rs. 3 lakhs., b) For component b: 50% of the cost up to Rs. 3 lakhs., c) For

component c: 25% of actual rental space with a ceiling of Rs. 20 lakhs for Govt.

organizations. For common item of expenditure as space rentals, construction of stall,

publication etc will be given. For organizing a fair, assistance shall be decided on

merit. For component d: no specific pattern mentioned.

Department of Rural Development

31) Special Projects under Swarnjayanti Gram Swarozgar Yojana (SGSY) :-


64

Funding on following points: - Projects aimed at increasing competitiveness of

MSMEs such as skill up gradation, entrepreneurship development, production related

infrastructure, testing, processing, packaging etc.

Projects should target rural BPL families.

Subsidies or funds up to the extent of: - 75% of the Project cost would be funded

by Department (the Project cost should be in the range of Rs. 1 Cr- Rs. 15 Cr).

Department of Science and Technology

32) Instrument development Programme (IDP) :-

Funding on following points :- Programmers leading to indigenous development

and up gradation of instruments in the following thrust areas:- a) Analytical / Optical

Instrumentation ;, b) Medical Instrumentation;, c) Industrial Instrumentation;, d)

Sensors ;, e) Imaging Techniques and Instrumentation.

No support is provided towards creating basic infrastructure and building.

Subsidies or funds up to the extent of :- Assistance towards project staff salaries,

equipment, consumables, domestic travel and other miscellaneous items.

Open ended, assistance not specified.

33) International S&T Cooperation (ISTC) :-

Funding on following points :- a) R&D Projects Scheme, b) Joint

workshop/Exhibition/Seminar, c) exchange visit of scientist, d) inter Institutional

Linkages, e) fellowship, f) organization of visit of thematic scientific and composite

(scientific and industrial) delegations.

Transfer of Technology to Indian industry.

Subsidies or funds up to the extent of: - Support for equipment consumables and

exchange visit Extend of assistance not specified.

34) Joint Technology Projects under STAC/IS-STAC :-

Funding on following points :- a) Joint Technology project between the user

Ministry and DST proposed by implementing agency for:, b) R&D in thrust areas, c)

Research Development & Demonstration (RD&D) Projects demonstrated on

industrial scale, d) Studies on topics relating to technology assessment and/or

development of new technology, e) Organizing Inter-Sect oral Workshops, f)

Building and any major infrastructure creation not allowed.

65

Subsidies or funds up to the extent of :- a) Equipment, salaries consumables,

domestic travel, overheads, contingencies etc, b) Financial support from user

ministry expected. Extent of assistance not specified.

35) State Science & Technology Programme (SSTP) :-

Funding on following points :- a) Establishment and supporting State Councils for

S&T, b) Organization of meeting/workshops on specialized S&T topics, c) Carrying

out studies/surveys, d) Identification of science and technology of weaker sections of

the society., e) Location specific research and technology development programmes,

f) Undertaking Science and Technology demonstration projects in States, g)

Vehicles, buildings, any other major infrastructure item not allowed.

Subsidies or funds up to the extent of: - Equipment, salaries consumables,

contingencies, domestic travel, overheads etc

Extend of assistance not specified.

Department of Scientific and Industrial Research (DSIR)

In this regard DSIR has turned the expenditure an amount of Rs.1278.88 Crore for

various schemes mentioned under the year 2009-10.23

36) International Technology Transfer Programme :-

Funding on following points: - a) Organization of technology based trade fairs., b)

Participation of technology intensive organization in such fairs., c) Setting up of

“Technology Trade Facilitation Centers”, d) Organization of “Training-cum-

Awareness Programmes for Overseas participants”

Organization of area-specific buyer-seller meets in India and abroad.

Subsidies or funds up to the extent of: - Partial support generally covering costs

towards documentation, professional charges, travel, office equipment and stationary,

computerization, preparation and printing of documents, reports, invitation cards,

banners etc., and consumables in pilot plants or working models.

37) Consultancy Promotion Programme: - scheme was started on in the year of 2007.

Funding on following points: - Consultancy Promotion Programme for :

a) Strengthening consultancy capabilities such as R&D efforts, studies, surveys, skill up

gradation, venture capital etc.

b) Development of Consultancy for SMEs such as setting up of consultancy clinics,

consultancy parks, commercialization of technologies etc.

c) Documentation of experiences / information dissemination, etc

66

d) Support to consultancy promotion organizations / institutions

e) International Cooperation & Export of Consultancy Services

Setting up of Consultancy clinics Setting up Design Engineering Service centers.

Subsidies or funds up to the extent of: - a) Extend of assistance not specified for

component., b) Partial support of about 70-80% of the total estimated cost for setting

up consultancy clinics.60% support of total budget of the project mainly services &

experts / consultants, capital equipments, salary of core staff, travelling, office

expenditure, advertisement or any other relevant expenditure excluding space for

setting up of Design and Engineering service centers.

38) Technology Information Facilitation Programme: - scheme was started on in the

year of 2005.

Funding on following points:-

A) Development of endogenous capacities,

a) Promotion of content development

b) Industrial trend reports

c) Information support for industrial clusters

d) Digital and indigenous knowledge base

e) National websites/ servers

f) Indian digital library of theses and R&D publications

g) Documentation of traditional knowledge and folk wisdom

h) Information for community – digital provide and opportunities

B) Establishing knowledge net

o Promotion of information access and sharing

o Virtual systems

o Electronic publishing of selected Indian S&T materials

o Open archive initiatives – a web alternative to scholarly communications

C) Mapping of national S&T productivity

a) Education, training and R&D

b) Surveys and R&D studies

c) Manpower development programme

d) International activities Foreign Travel not permissible.

Subsidies or funds up to the extent of :- Financial support (partial or full) and

technical guidance (components as Manpower, Equipment, Consumables, internal

67

travel and other miscellaneous expenditure Equipment, Consumables, internal travel

and other miscellaneous expenditure.

39) Technology Development & Utilization Programme for Women: - scheme was

started on in the year of 2007.

Funding on following points :- a) Studies surveys for the assessment of technology

related information needs of women in different walks of life., b) Documentation

and content development on the following aspects:, c) Technologies useful for

production activities, personal care and community management including food

processing, water conservation, waste disposal, maintenance of health and hygiene,

etc., d) Best practices in the use of technology to strengthen competitiveness of

gainful activities by women., e) Contribution of women innovators/entrepreneurs., f)

Contribution of women scientists/technologies working in various Scientific

laboratories., g) Technologies and products beneficial to women., h) Establishing

Consultancy Cells for imparting technical knowledge on adoption of latest

technologies., i) Awareness creation and training of women in technologies useful for

production activities, personal care, community management, including food

processing, water conservation, waste disposal, etc.., j) Case studies of successful

R&D, Technology Development and business women., k) No support will be

provided for basic infrastructure and buildings.

Subsidies or funds up to the extent of: - Financial support (partial or full) and

technical guidance (components as Manpower, Equipment, Consumables, internal

travel and other miscellaneous expenditure.

40) R&D Grants For New Product / Process Development: - scheme was started on in

the year of 2003.

Funding on following points :- a) R&D Project for development of a new/ improved

product resulting in Prototype development and ending with demonstration in

commercial environment., b) R&D Project for development of a new / improved

process resulting in establishment of process know-how, development of process

equipment and demonstration of yield, efficacy etc in a Pilot plant cost of following

activities not supported :, c) Pre-project activities ( including preliminary literature

survey and patent search), d) Permanent employee costs, e) Travel costs of industry

personal, f) Industry overheads, g) Contingency provisions, h) Payments for

technology received from commercial organizations, i) Infrastructure facilities like

land, building, j) Production and production test equipment, k) Standard quality

68

control., l) received from commercial organizations, m) Infrastructure facilities like

land, building, n) Production and production test equipment, o) Standard quality

control equipment.

Subsidies or funds up to the extent of :- a) Partial funding support towards cost of:,

b) Exclusive personnel for the project, c) Consultancy services used exclusively for

the research activity, including bought-in research, technical knowledge, patents,

etc);, d) Patenting, e) Running costs, f) Cost Testing, trials & certification.

41) Technology Management Programme: - scheme was started on in the year of

2005.

Funding on following points :- a) Compilation and analysis of data on foreign

collaboration approvals., b) Analytical, technology status and development studies.,

c) Studies on technology and management issues., d) Targeted research studies on

specific issues in technology transfer, technology & innovation management., e)

Case studies covering technology management aspects., f) Resource centers on

technology management., g) Information dissemination., h) Training, Interaction

meets, Seminars/ management development programmes., i) Student paper contest.,

j) Pedagogic tools., k) Technology management audit exercises

Ministry of Finance

42) Viability Gap Funding: - scheme was started on in the year of 2005.

Funding on following points :- a) Roads and bridges, railways, seaports, airports,

inland waterways;, b) Power, c) Urban transport, water supply, sewerage, solid waste

management and other physical infrastructure in urban areas;, d) Infrastructure

projects in Special Economic Zones. International convention centers and other

tourism infrastructure projects;.

Subsidies or funds up to the extent of: - Viability gap funding to the extent of 20%

of the Project cost.

Comparison of facilities & Concessions to Industries in Maharashtra,

Gujarat, Karnataka , Tamilnadu and Andhra Pradesh .

No. of facilities, incentives and special form assistance are available to industries

for setting up and modernization industries in first industrially developing states namely

Maharashtra, Gujarat, Karnataka, Tamilnadu and Andhra Pradesh. Which study in this

section a comparison of various facilities, concession and various forms assistance

provided by various state Government in India. The package scheme of incentives and

69

various assistance as enunciated by the various State Government are certainly a

necessary adjunct to the right kind of industrial development. To widen the industrial

development base various above state Government designed the package scheme of

incentives that the maximum advantage could be derived.

Capital Subsidy

Government of Maharashtra is a prominent state in India for industrialization.

Government of Maharashtra has given various package scheme of incentives for

industries. To encourage the Industrialization the State Government offered Capital

Subsidy for various industries, @ 20% to 40% capital subsidy for Fixed Capital

investment in industries.

The following Capital subsidies offered by the various State Government:

In Maharashtra a capital subsidy will be extended to new small scale units in

different parts of the state from 20% to 40% in taluka / areas B, D, D+ and No Industry

Districts. The Monetary Ceiling in the district mentioned are from 10 to 35 lacs.

In Gujarat there is a no Capital Subsidy for study period. The State Government

offered package incentives in various other forms.

In Karnataka a capital subsidy will be extended to new enterprises according to

note given below , the promotion subsidy for:

a) Micro Mfg. Enterprises in a following way Investment Promotion Subsidy for

Zone –1 :25% VFA (max. Rs.10lakhs), for Zone – 2 20% VFA (max. Rs.7.5

lakhs), for Zone – 3 : 15% VFA (max. Rs.5.00 lakhs)

b) Small Mfg. Enterprises

for Zone -1 :20% VFA max. Rs.20 lakhs), for Zone – 2 : 15% VFA max. Rs.15

lakhs), for Zone – 3 : 10% VFA (max. Rs.10 lakhs), for Zone – 4 : Nil

c) Med. Mfg. Enterprises_(Those who employ minimum 25 workers)

for Zone – 1 : Rs.30 lakhs, for Zone – 2 : Rs..20 lakhs, for Zone – 3 : Nil, for

Zone – 4 : Nil

Karnataka Government also adapted the above Capital Subsidy scheme for micro

small and medium enterprises also considered the unemployment problem in Karnataka

and give a higher assistance to those industries who create higher employment.

70

In Tamilnadu a capital subsidy will be extended @ 15% on eligible plant &

machinery as indicated in Micro, Small, and Medium enterprises development

(MSMED) Act 2006 and Rules.

The Tamilnadu Government has adapted the central Government MSMED act

2006 as per there norms the Capital Subsidy available to the extent of above.

In Andhra Pradesh a capital subsidy will be extended to 15% investment

subsidy limited to Rs. 20.00 lakhs to MSE’s. Seed capital assistance to First Generation

Entrepreneurs to ser-up Micro Enterprises @10% of the Machinery cost and the same be

deducted from the eligible investment subsidy. The Andhra Pradesh Government adapted

the principles of Maharashtra Government incentives scheme and Capital Subsidy

available to the extent of above statement.

VAT & CENTRAL SALES TAX EXEMPTION

In Maharashtra, Gujarat and Karnataka there is no exemption of VAT & CST, but

these states will consider extending sales-tax benefits to the existing eligible industrial

units enjoying incentives approved in earlier schemes, for new products because of

diversification or modernization in their existing plant.

In Tamilnadu the exemption from VAT and CST to All Micro Manufacturing

Enterprises will be entitled to a subsidy equal to the assessed VAT paid by them for 1st

six years after commencement of production.

In Andhra Pradesh exemption from VAT& CST for a period of 5 years to Micro

Enterprises .Reimbursement of 50% for period of 5 years to Small Enterprises.

EXPORT SUBSIDY

Export Oriented Subsidy: In Maharashtra the subsidy is given for small,

medium and large enterprises at the rate of spicified percentage of expenditure.

In Gujarat the export promotion subsidy will give in the following way:

The State will encourage export of products manufactured by industrial units in the State.

Setting up of Export park, 100% EOUs, Inspection agencies for export products etc. will

be encouraged. Air Cargo Complex at Ahmedabad will be strengthened and new such

Complexes will be opened. Setting up of Common Facilities Centre of World Trade

Centers will be encouraged.

In Karnataka, the export promotion subsidy will give in following principal.

MSME, Large and Mega Projects. For 100% EOUs, 100% exemption from payment of

71

ET on ‘Plant & Machinery and Capital Goods' for an initial period of 3 years from the

date of commencement of project implementation irrespective of zones. For other EOUs,

(Minimum Export obligation of 25% of their total turnover) 100% exemption from

payment of ET on raw materials, inputs, component parts & consumables (excluding

petroleum products) for an initial period of 3 years from the date of commencement of

commercial production in Zone 1, 2, and 3 and 50% in Zone 4.

In Tamilnadu and Andhra Pradesh there is no export oriented subsidy given.

INTEREST SUBSIDY

In Maharashtra, new textile unit, hosiery and knitwear small scale industries

setting up in different parts of the State will also be eligible for interest Subsidy on the

interest actually paid to the financial institution/ bank on the term loan for creation fixed

capital assets, equal to the interest payable at 5% per annum in the taluka/ area C,C,D+

and No Industry districts monetary ceiling ranging from Rs. 10 to 35 lacs for the

maximum period ranging from 4 to 7 years. The monetary ceiling will be applicable for

the complete period of eligibility.

In Gujarat, interest Subsidy to SSI @ 5% for five years up to a maximum of

Rs.25.00 lacs to all industrial units. Existing units carrying out expansion, diversification

will be offered interest subsidy @ of 3% per annum up to a maximum of Rs. 15.00 lacs.

Alternatively self financed new units will be offered subsidy @ 10% of fixed capital

investment up to a maximum of Rs. 10.00 lacs.

Interest Subsidy has to educated Unemployed in Service Sector.

The service sector industries will be encouraged as part of industrial activities. An

elaborate list will be published covering activities like technical consultancy, port-related

activities, IT related activities, tourism activities and similar other activities Assistance

will be provided by way of interest subsidy at the rate of 5% for first 3 years up to a

maximum limit of Rs. 5 lacs to educated unemployed youth for establishing service

industry.

Scheme for financial assistance by way of credit linked Interest Subsidy in

Spinning, Weaving, Knitting, Apparel and Machine Carpenter.

Assistance available:-

Maximum interest subsidy at the rate of 5% per annum, limited to maximum of

Rs. 30 lakhs (for spinning maximum of Rs.40 lakhs available

72

The scheme will be known as Credit linked Interest Subsidy in Technical Textiles.


Maximum interest subsidy at the rate of 6% per annum, limited to maximum of

Rs. 125 lakhs during the operative period five years available.

The machinery of Technical/ Industrial textile as listed and identified under TUF

scheme of compatible with TUF scheme will be five years.

Scheme for financial assistance by way of credit linked Interest Subsidy to Micro, Small

and Medium Enterprises.

Assistance available :-

Interest subsidy up to 7% for micro enterprises and @ 5% for small and medium

enterprises.

1% additional interest subsidy to youth having less than 35 years of age in case of

first project. Women entrepreneurs will be as follows

Maximum limit of Rs. 25 lakhs per annum, for 5 years.

In Karnataka there is no interest subsidy given.

In Tamilnadu a back-ended interest subsidy at the rate of 3% (subject to a

maximum of Rs. 10 lakhs per enterprise over a period of five years) will be extended on

loans taken up to Rs. 100 lakhs by Micro, Small and Medium Enterprises for

modernization by induction of well-established and improved technologies in specified

sub-sectors / products as listed in the guidelines on Credit Linked Capital Subsidy

Scheme (CLCSS) Scheme of Government of India.

In Andhra Pradesh an Interest rebate reimbursement under Pavalavaddi scheme

on Prime Lending Rate on the term loan to an extent of 9% over and above 3% to MSEs

for a period of 5 years.

Popularize the collateral free loan scheme – CGTMSE actively take measures

which will enhance the loan rendering capacity of banks.

APSFC will provide loans to MSMEs in line with Commercial Banks under SIDBI –

CGTMSE scheme.

STAMP DUTY EXEMPTION:

In Maharashtra the stamp duty for various situations are exempted in a following

way Stamp Duty on Corporate Restructuring:

73

The stamp duty for demerger of companies as defined under section 2( 19-AA) of

Income Tax Act 1961 will be made applicable on lines of the stamp duty structure on

applicable on lines of the stamp duty structure applicable for amalgamation of companies

under every order made by the High Court under every order made by the High Court

under section 394 of the Companies Act, 1956.

Waiver of Stamp Duty and Registration Fees:

At present, IT units in public IT parks are exempted from Stamp Duty and

deregistration fees upto 31st March, 2006. Now all the new industrial units (including IT

and BT units) and expansions, will be exempted from payment of Stamp Duty and

deregistration fees up to 31st March, 2006 in C,D and D+ areas and No Industry Districts.

However, 50% of the Stamp Duty and Registration fees will be waived for IT units set

up in other IT Parks in talukas / areas in the State in “A” and “B” Categories.

In Gujarat there is a no Stamp Duty Exemption to Industry. In Kranataka the

Stamp Duty Exemption to Industry are as follows : For the loan document and sale

deeds, MSME Large and Mega Projects the charges shall be at concessional of Re. 1 per

1000.

In Tamilnadu the Stamp Duty Exemption to Industry are as follows : Micro

Manufacturing Enterprises will be exempted from the payment of stamp duty on

mortgaged and pledged documents. In Andhra Pradesh there is a no Stamp Duty

Exemption to Industry.

INCENTIVES FOR RESEARCH AND DEVELOPMENTS

Incentives For Research and Developments:

In Maharashtra Promotion of education and Research institutions:

Educational and research institutions of international or national standard,

including world-class business education institutions, would be provided land in

industrial areas/ estates at nominal or concessional rates.

In Gujarat Assistance for Patent registration:

A facilitation Cell will be opened to assist entrepreneurs for Patent and

Intellectual Property Right (IPR) provisions. The industries as well as R & D institutions

will be encouraged for filling patent on their research. Assistance will be provided at the

rate of 50% of expenses in this regard up to a maximum of Rs.5 lakhs.

74

Technology Up gradation:

The state Government has accorded high priority for up gradation of technology

and modernization by industrial units. The Research & Development Institutions set up

in the State will be strengthened and will be encouraged for taking technology up

gradation programme in specific industrial clusters. Encouragement will be given to get

accreditation with International Quality Testing Agencies in order to make them

internationally reputed. Innovations from small enterprises and individual will be

encouraged. The institutions set Technology Cell (TBIIP) set up in INDEXT with the

help of UNIDO will be strengthened.

Training Institutes in Hi-tech areas

The State will promote training institutions in international repute to be set up by

large industrial houses in the areas like information Technology, biotechnology, marine

engineering etc. Support to Research & Development Institutions Scheme. Assistance

available :-For support to R&D Institutions. Assistance of up to 60% of project cost,

excluding cost of land and building. For assistance to Contract/ Sponsored research

work. Assistance of up to 50% of project cost, excluding cost of land and building,

subject to maximum of Rs. 50 lakhs.

In Karnataka & Tamilnadu there no incentives for R & D. In Andhra Pradesh R

& D incentives for industries as follows: Create Technology Facilitation Cell in the

Commissionerate of Industries with the help of APTDC, TIFAC, CII, CSIR and local

chamber of commerce to help MSMEs..

Continue to provide necessary budget for the Technology Development Fund.

APTDC and ISB are entrusted to study Food Processing, Engineering, Electronics,

Precision Instrumentation, Bulk drugs / Pharmaceuticals sectors to identify the

technological gaps and to prepare an action plan.

INCENTIVE FOR SICK UNIT

In Maharashtra the following way of incentive: Sick SSI units:

Issues relating to the rehabilitation of sick SSI units are reviewed in the State

level Inter Institutional Committee and Sub Committee of Reserve bank of India and in

the District Level Committee which have been set up as an adjunct of the Zilla Udtog

Mitra. Sick SSI units taken up for reschedulement of arrears of Government and

electricity dues to be repaid in 36 monthly installments at 13% interest. The interest rate

75

on the rescheduled arrears will now be reduced to 10%, in all except “A” areas of the

State. The repayment of such arrears would be allowed in 60 monthly installments.

In Gujarat the following way of incentive: Rehabilitation of Sick Industrial Units

The State Government has introduced Gujarat Board for Industrial Finance and

Reconstruction (GBIFR) in 1988 to rehabilitate potentially viable small scale industrial

units. The State Govt. has liberalized the existing provisions of viable small scale units.

Assistance for medium and large units will be considered in consultation with financial

institutions to prevent them becoming sick.

Remission of the entire amount of interest, penal interest and penalty.

(i) Remission of entire amount of interest, penal interest and penalty. However, a unit has

to pay simple interest @9% on the outstanding principal amount payable from the date of

order issued under the scheme.

In Karanataka & Tamilnadu there is a no incentive for sick unit.In Andhra

Pradesh the way of incentive as follows : Government of India is in process of

finalization of a Scheme for Rehabilitation of Sick Micro, Small and Medium Enterprises

by setting up a Rehabilitation Fund. Accordingly, the State would suitably modify its

Scheme, taking advantage of the Sick units Revival and Rehabilitation scheme of

Government of India.

Marketing Support/Price Preference

In Maharashtra there is no market support subsidy.

In Gujarat the Marketing support are in a huge since, Market Promotion:

Market promotion activities like Buyer Seller Meets, Trade Fair etc. will be

encouraged. Common purchase policy will be introduced for purchase of items

manufactured by small scale units of the State. A booklet incorporating items required by

State Government Corporation/ Boards and large companies will be published for the

benefit of small scale industries.

Assistance for Market Development

Assistance Available and conditions:-

Name of the Scheme-

1. Packaging Design by MSME :-

Assistance to MSME units for packaging design from recognized institutions @

50% of cost of packaging design charges/ fees, Maximum to Rs. 2 lakhs.

76

Assistance will be available only once during the operative period of the scheme.

2. Participation of MSME in International Trade Fair outside India

Assistance to MSME units for participation in International Trade Fair outside

India @ 50% of total rent of Stall or Space paid to organizer and cost of product

literature, catalogue and display material. Maximum to Rs. 2 lakhs.

Assistance will be available only once during the operative period of the scheme.

MSME unit shall have to apply within six months from the date of participation.

3. Participation of Industries Association in international trade fair as Gujarat

Pavilion Assistance to Industries Association for participation in international

trade fair as Gujarat Pavilion outside

India @ 50% of total rent. Maximum to Rs. 10 lakhs.

Minimum five industrial unit’s participation is necessary to get assistance.

4. National – International Seminar / Exhibition organized by Industries Association.

Viability gap support to Industries Associations for organizing seminars/

exhibitions.

Maximum of Rs. 4 lakh for national exhibition/ seminar in Gujarat.

Maximum of Rs. 8 lakh for international exhibition/ seminar in Gujarat.

5. Convention Centre / Trade Centre set up by Industries Association.

Assistance for setting up of Convention Center/ Trade Center by Industries

Association at maximum of 50% of project cost, excluding land cost, subject to

maximum of Rs. 5 crore. Assistance will be available only once during the Scheme

Operative Period of the scheme. In Karnataka there is ano incentive for this purpose.

In Tamilnadu the Price preference to industry as follows:

A) Price preference of 15% will be extended for purchase of goods of domestic

Micro and Small Enterprises as provided in the Tamilnadu Transparency in

Tenders Act, 1998.

B) A grant of 50% of expenses incurred on hall rent (subject to a ceiling of Rs. 5

lakhs per event in Chennai and Rs. 1 lakh per event in Districts) will be

sanctioned on reimbursement basis for sponsoring of exhibitions by MSME

Associations.

C) A grant of 50% of the hall rent (subject to a ceiling of Rs. 5 lakhs per exhibition)

will be sanctioned on reimbursement basis for participation in exhibitions in other

States by MSME Associations of Tamilnadu.

77

In Andhra Pradesh the Marketing support to industries will be available in a following

way: Tender Forms will be made available free of cost. Exemption from payment of

Earnest Money Deposit (EMD) and Security Deposit (SD). Bill discounting facility will

be made available on Government orders. 10% price preference i.e. where the bid of

Micro and Small Enterprises are within 10% of L1, the local Micro and Small

Enterprises will be given an offer of reasonable part of the order at L1.

Reimbursement of cost incurred for quality certification/ patent registration

@50% limited to Rs.2.00 lakhs for MSMEs. Provide platforms for interaction between

Enterprises in Andhra Pradesh and potential domestic and global markets through Trade

Fairs, Road shows. Encourage the SMEs to participate in national and overseas business

fairs & exhibitions, and international delegations.

Consider to create A Facilitation Council – a quasi-judicial body to redress the

problems being faced by the local MSEs in marketing their quality products Setting-up a

permanent Exhibition-cum-convention Centre exclusively display of MSME products.

Technical support

In Maharashtra there is no such scheme. In Gujarat Assistance will be provided to

industrial units obtaining quality certification from approved institutions, research

laboratories, @ 50% of the expenditure up to a maximum of Rs. 2.00 lacs.

The scheme will be known as assistance to enterprises for Technology acquisition and up

gradation.


The enterprises acquiring the technology will be provided financial assistance of

upto 50% of the investment for technology 31/03/2014 with maximum of Rs 25 lakhs

per process/product once during operative period of the scheme

Scheme for financial assistance for Quality Certification.


Assistance at the rate of 50% of cost of quality certificate, within overall ceiling of Rs. 6

lakhs in 5 years, will be available. Assistance will be available only for maximum of

three certificates in the Scheme during the Operative Period of the scheme for

31/03/2014. This scheme is supplementary to any other incentives from other schemes of

Government of India. Scheme for Technology Acquisition Fund

78

Assistance Available:-

Grant at the rate of 50% of cost of technology acquisition, including royalty payments

for first two years, subject to maximum technology. Scheme of assistance for Patent

Registration.

Assistance Available :-

Assistance of up to 50% expenditure incurred for obtaining patents, subject to maximum

of: Scheme of financial assistance for Energy & Water Conservation.

Assistance Available:-

50% cost of energy/water audit conducted in a unit by a recognized institution/consultant

subject to a limit of Rs. 25,000 and 31/03/2014 institution/consultant is enclosed

herewith. 20% of cost of equipment subject to maximum Rs. 10 lakhs per project.

Rs. 10 lakhs for obtaining domestic patents Rs. 25 lakhs for obtaining international

patents In Karnataka & Andhra Pradesh there is a no technical support to industry.

In Tamilnadu the following incentives are available:-

A) Mini Tool Rooms: Government will proved all support for the proposal for the

setting up of Mini Tool Rooms to be sanctioned under National Manufacturing

Competitiveness Programme (NMCP) of Government of India and provide

necessary assistance wherever required.In addition the Government will also

provide support to Mini Tool Room projects to be taken up by any Industrial

cluster / Association at the rate of 25% of the project cost, subject to a

ceiling of Rs.1.00 Crore in strategic locations based on demand. The

Industrial cluster / Association concerned should arrange for the land.

B) A corpus of Rs. 25 lakhs with necessary annual injections will be set up to part

fund small developmental projects undertaken at the behest of MSME

Association by IIT-Madras, Universities in the State including Deemed

Universities, Engineering Colleges, Polytechnics, and Central Government

Institutions of Excellence in the State for evolving cleaner and / or energy

efficient of IT enabled technologies for the Micro, Small and Medium

Manufacturing Sector. The support will be up to Rs.2.5 lakhs or 50% of the

project cost whichever is less and the project should have the prior approval of

the Industries Commissioner and Director of Industries and Commerce.

C) Financial assistance to the tune of Rs.50 lakhs per Incubator/Centre of Excellence

would be provided for creation of basic infrastructure for setting up of Centres of

Excellence and Technology Business Incubators in the fields like Automobile,

79

Machine tools, Food processing etc, in MSME Sector for introduction of new

production techniques and design development.

D) 50% of the cost of filing a patent of Rs.2 lakhs, whichever is less, would be

provided as subsidy to Micro, Small and Medium manufacturing enterprises

having in-house or stand alone R & D Laboratories for innovations capable of

industrial application. Similarly 50% of the cost of application for Trade Mark

registration or Rs.25,000/- whichever is less, would be provided as subsidy.

E) Special steps will be taken to assist technology up gradation and achieve

economies of scale in the coir, handmade match, Cooperative tea and Sago

sectors.

Incentive to thrust sectors

In Maharashtra assistance available as follow:- I.T. Industry:

Twice the admissible Floor Space Index (FSI) is allowed for certain types of I.T.

units setting up in IT Parks promoted by public bodies. Such units are also permitted in

No Development Zones of cities up to FSI of 0.2. Such IT units will now be permitted to

establish in No Development Zones with an enhanced FSI of 1.0.

Film Industry:

The film industry has an important position in the economic and social life of

Maharashtra and Mumbai is the entertainment capital of the country. The Central

Government has accorded industry status to the film sector. Keeping in view the

potential for further development and employment generation in this sector, Minister

(Industries) will have deliberations with representatives of the film industry for possible

assistance from the State Govt.

Non Conventional Energy:

In order to give in impetus to the development of non-conventional energy, such

projects will be eligible for benefits under the new package scheme of incentives.

In Gujarat the assistance available for selected areas: - Cluster Approach:

The State Govt. intends to strengthen the industrial clusters at different locations with

involvement of Industries Associations of the area and R & D Institutions. Assistance

will be provided for establishing common facilities covering quality improvement,

technology upgradation, market promotion and technical skill. Financial assistance up to

80

Rs. 5 crores will be considered cluster. Scheme of financial assistance for setting up of

specialized skill development centeres.


Assistance to the extent of 50%, with ceiling of maximum of Rs. 2 crore, of the

project cost cocering fixed capital investment in new building, new equipments and

machinery (including installation cost), electrification, furniture and other miscellaneous

investment, etc.,

The assistance shall be available only for construction of new building and

purchase of new equipments, in addition to expenditure for electrification, furniture and

other miscellaneous investment, etc.

The land shall be owned by the promoter or shall be taken on long term lease (for

more than 20 years). The Center shall have a separately identifiable premise. Scheme of

financial assistance for running short-term bridge courses under Public private

Partnership.


For running courses at existing it is / Polytechnics/ Engineering colleges, the host

institute will offer the basic infrastructure facilities i.e. land & building.

The cost of machinery & equipment of up to 75%, limited up to Rs. 100 lakhs, will be

contributed by Directorate of technical education (DTE) and / or directorate of

employment and training (DET) and / or Industries Commissionerate.

Scheme of financial assistance for extension training centers at GIDC Estates/Industrial

Clusters/ Industrial Parks/ SEZs


• Land & Building : For extension centers, land and building shall be made

available by

o GIDC in GIDC Estates

o Industry Clusters will provide the land and the Industries Commissioner -

ate for the building thereon.

o Developers in SEZs / Industrial parks

• Financial Assistance : For each extension center, one time financial assistance to

the extent of following percentages of the cost of new machinery and equipment

will be provided, subject to maximum limit of Rs. 1 crore :

81

o 100% for GIDC estates

o 75% for Industrial Clusters, and the remaining by the cluster association/

industry association.

o 50% for Industrial Parks/ SEZs, and the remaining by the developer.

• In case the cost of machinery and equipment exceeds the maximum limit of

assistance for GIDC estates, the same shall be borne by the Industry/ Industries

Association/ National Level Training Institute.

Special incentive game and jewellary Industry: The Scheme is known as support

for setting up of following type of Gems & jewellary Park anywhere in Gujarat on PPP

basis.


Up to 50% with maximum limit of Rs 10 Crore of total project cost for

establishing common infrastructure facilities, excluding land cost.

Assistance for Training Institute for development of Gems & Jewellery sector.

Support for setting up of Training institute for development of Gems & Jewellery sector.


• Need based support

Financial Assistance for safety measures and protection from occupational

hazards in Gems & Jewellery sector.


• Financial assistance of 50% of cost of safety measures/ equipment, limited to Rs.

500 per worker.

Financial Assistance for setting up Hallmark Certification Center and Gem Testing

center

Quantum of Assistance:-

• Maximum interest subsidy at the rate of 3% per annum, limited to maximum of

Rs. 15 lakhs per annum, will be available.

• Interest subsidy will be available for establishing new Centers only, and

expansion or diversification of existing Centers will not be eligible for interest

subsidy.

Interest Subsidy to modern Jewellery Units

Name of the Scheme :-

Interest Subsidy be way of credit linked interest subsidy for modern Jewellery enterprise.

82


• Maximum interest subsidy at the rate of 3% per annum, limited to maximum of

Rs. 15 lakhs per annum, will be available.

The following incentive schemes are available in Gujarat only:

Assistance for setting up Industrial Parks. The State Government will encourage setting

up of Industrial parks through private sector investment. Assistance will be offered as

under.

Employment Park: 100 units or more than 2,500 employment-

Subsidy at a rate of 10% of Capital Investment- maximum Rs. 1 crore.

200 units or more than 5,000 employment-Subsidy at a rate of 10% of Capital

Investment- maximum Rs. 2.00 crores

HI TECH Park S ubsidy at a rate of 50% of Capital Investment – maximum Rs.2.5

crores.

Investment Park Investment of more than subsidy At a rate of 10% of- Share Capital

contribution @ 10% of paid up capital up to Rs.2.5. crore.

Trade Centre

More than 5,000 Sqmt. Construction – Subsidy up to 50 lakh

More than 10,000 Sqmt. Construction –Subsidy up to Rs.100 lakh

Support for Vendor Development


Assistance @ 20% of infrastructure cost excluding land cost subject to maximum Rs. 1

Crore Support to auxiliary industries for value addition.


Assistance @ 20% of infrastructure cost excluding land cost subject to maximum Rs. 1

Crore Financial Assistance to Industrial Estates/Parks in Private Institutions should be

provided link Infrastructure.

Quantum of Assistance :-

• Industrial Park / Estate will be provided an amount upto Rs. 10 crores for link

infrastructure.

• Exemption on payment of stamp duty on purchase of land only for New projects

required for the project approved by SLAC.

• The units in the industrial park required to pay stamp duty @50% of the duty.

Improving Industrial Infrastructure

83


Financial Assistance to Industrial Estates / Parks in Public Private Partnership (PPP)

mode.


• Viability Gap Funding of upto 20% of the landed project cost through GIDB.(In

addition to upto 20% VGF assistance as may be provided by Central Govt.)

Assistance to Critical Infrastructure Projects


Assistance of Critical Infrastructure Projects.


• Financial assistance to be extended would be subject to a review of the current

status of infrastructure grading and thereby estimation of costs/investments.

• Assistance will be considered, depending upon the requirement of State

contribution in the projects identified in industrial parks/clusters/areas, up-to 60%

of project cost, with ceiling of assistance as below :

o Rs. 10 crore_ in case the area of the project is less or equal to 100 hectares

o Rs. 20 crore. In case the area is more than 100 hectares

• The promoter of the Project shall commit to hold at least 20% equity participation

in the project.

• The Implementation Committee may also approve projects for providing last mile

connectivity to the industrial parks/clusters/ areas having area of more than 25

hectares.

• In case there is no private stakeholder fix the development of the infrastructure of

the industrial area/estate. Government may form a Special Purpose Vehicle

(SPV) and financial assistance will be provided on cost recovery mechanism

basis which may include toll tax. Lease rent, by increase in allotment price,

transfer fees, non utilization penalty. Etc.

Financial Assistance to Industrial Estates/Parks in Private Institutions should be provided

link Infrastructure.



infrastructure.

84






Financial Assistance to Industrial Estates / Parks in Public Private Partnership (PPP)

mode.



addition to upto 20% VGF assistance as may be provided by Central Govt.)

Assistance of Critical Infrastructure Projects.


• Financial assistance to be extended would be subject to a review of the current

status of infrastructure grading and thereby estimation of costs/investments.

• Assistance will be considered, depending upon the requirement of State

contribution in the projects identified in industrial parks/clusters/areas, up-to 60%

of project cost, with ceiling of assistance as below :

o Rs. 10 crore_ in case the area of the project is less or equal to 100 hectares

o Rs. 20 crore. In case the area is more than 100 hectares

• The promoter of the Project shall commit to hold at least 20% equity participation

in the project.

• The Implementation Committee may also approve projects for providing last mile

connectivity to the industrial parks/clusters/ areas having area of more than 25

hectares.

• In case there is no private stakeholder fix the development of the infrastructure of

the industrial area/estate. Government may form a Special Purpose Vehicle

(SPV) and financial assistance will be provided on cost recovery mechanism

basis which may include toll tax. Lease rent, by increase in allotment price,

transfer fees, non utilization penalty. Etc.

Financial Assistance to Industrial Estates/Parks in Private Institutions should be provided

link Infrastructure.

85



infrastructure.






Financial Assistance to Industrial Estates / Parks in Public Private Partnership

(PPP) mode.



addition to up to 20% VGF assistance as may be provided by Central Govt.)

Support to industries Association:-

The Scheme is known as support for setting up of following type of Textile & Apparel

Park anywhere in Gujarat on PPP basis.

1. Apparel / Sewing parks.

2. Weaving park for Cotton / synthetic Textiles.

3. Exclusive Technical Textile Park.

4. Exclusive Industrial park for machine made carpets.

5. Industrial Park for Textile machineries & ancillaries.

6. Ginning and Pressing Park.


Up to 50% with maximum limit of Rs 10 Crore of total project cost for establishing

common infrastructure facilities, excluding land cost.

Scheme for financial assistance for Cluster Development in PPP Mode.


Assistance of up to 80% of project cost (including assistance from Government of India),

with a ceiling of Rs. 10 Crore per cluster 5 years.

If the assistance for cluster development is obtained under the Cluster Development

Scheme of Government of India, the total scheme shall not exceed 80% of the project

cost. No recurring expenditure will be considered for assistance. Assistance to nodal

86

institutions/ hiring of experts should not exceed 3% of project cost. Scheme of financial

for setting up State Level Anchor Institute.


Capital Expanditure Support :

The institute will be provided following financial support:

* Expenditure towards equipments only will be reimbursed and cost of land, building

required for setting up of Anchor/ Nodal institute will not be Included.

* Expenditure for internal refurnishing of the premises dedicated for the programme will

also be eligible for financial support.

* No Institutional overheads will be permitted.

* 3% contingency may be considered as part of the project cost.

* Reasonable amount of Pre-project expenses, to the extent of up to Rs. 2 lakhs, may be

considered.

Operating Expenditure Support

• Initial support towards operating expenses for Anchor and Nodal Institutes would

be allowed to the extent of the following percentages :

First & Second Year 100%

Third Year 75%

Fourth Year 25%

• The cost of office consumables, communication expenses and traveling and

dearness allowance of the faculty for the program will be approved as a part of

the operating cost.

Quantum of Assistance

• Total financial assistance under both capital and operating expenses support shall

not exceed Rs. 10 crores for each sector for the entire operative period.

For Organizing Exhibitions, Seminars by Chambers and Industries association.


• Depending on the programme’s proposal and with budgetary allocation as

decided by the State Level Approval Committee.

• Up to Rs. 3 lakhs only one time assistance in a year, to the regional and local

industries association, if participated by State Govt. or Board-Corporation of the

State

87

• If exhibition is organized by State of National level body of industries, the

assistance may be granted up to Rs. 10 lakhs only one time assistance in a year.

For Organizing Exhibitions, Seminars by Chambers and Industries association.


• Depending on the programme’s proposal and with budgetary allocation as

decided by the State Level Approval Committee.

• Up to Rs. 3 lakhs only one time assistance in a year, to the regional and local

industries association, if participated by State Govt. or Board-Corporation of the

State

• If exhibition is organized by State of National level body of industries, the

assistance may be granted up to Rs. 10 lakhs only one time assistance in a year.

Environment Schemes:- Scheme for assistance to encouraging “Green” practices and

environmental audit to MSMEs.

Up to 25% of cost of equipments; or maximum Rs. 2.5 lakh/ Units

Up to 50% of fees of audit services; or maximum Rs 25,000/ audit

Up to 25% of cost of equipments; or maximum Rs 5 lakh/ plant once in a lifetime

Up to 25% of cost of equipments; or maximum Rs 2 lakh/ cluster. The assistance under

the scheme will be provided to industrial association or SPV formed by the Industrial

Units.

Up to 25% of cost of system; Rs 2.5 lakh / plant

Scheme of assistance for Environment Management to MSMEs.


The following quantum of assistance shall be provided :

Up to 25% of cost of plant & machinery; ceiling of Rs 10 lakh per project.

Up to 50% of cost of fixed capital investment ; ceiling of Rs 5 lakh per project

Up to 25% of cost of plant & machinery; ceiling of Rs 10 lakh per project

Up to 50% of cost of plant & machinery; ceiling of Rs 10 lakh per project.

On the bases of above incentive scheme and concession offered by various leading state

Government. We must say that one should take into consideration the following points.

Incentive scheme must be a simple scheme.

Concession offered must be separate for each class industries.

1. Incentive scheme must be a simple scheme.

2. Concession offered must be separate for each class industries.

88

3. VAT & CST must be exempted.

4. Air Cargo and Dock facilities should be in world class.

5. Interest free loan for each industries.

6. Technology up gradation assistance for patent and R & D.

7. Various marketing support for MSME.

8. Bill discounting facilities for industries.

9. Use of non-conventional energy should be improved.

10. Clusters development for various industries.

11. Financial assistance for safety measures.

12. Financial contribution for employment generation investment, parks, critical

project, infrastructure up gradation.

13. Support for various industries parks.

14. Support for various associations.

15. Support to service industries.

16. Support for quality presentation of product.’

17. Support for various licensing at global level.

18. Support to sick industries.

19. Support for finance.

PSI Scheme 1983

The package scheme of incentive 1983 was valid for the period 1st April 1983 to

31st March 1988. This scheme covers all the industrial units in Maharashtra. Government

of Maharashtra has also adopted Geographical Groups made since inception.

The Government of Maharashtra gives the following incentives or continued

following incentives.

A) Industrial Promotion Subsidy (Capital Subsidy) :- The scheme provide with which is

percent of capital investment in the projects differentiated on the basis of Groups.

B) Interest Subsidy: - The interest paid on finances obtained for qualified investments is

eligible for subsidy at rates specified in the Scheme document.

C) Electricity duty exemption: - Scheme provides exemption from payment of

electricity duty to all eligible units to the extent of eligible period.

D) Stamp duty exemption: - Waiver of stamp duty on transactions undertaken during the

investment period.

89

E) Power Tariff Subsidy :- Fixed subsidy is granted per unit consumption basis

F) Other incentives: - Investments qualifying for promotion of Quality Competitiveness,

Research & Development, Technology Up-gradation, Water & Energy Conservation,

Cleaner Production Measures and Credit Rating will get specified benefits under the

Scheme. Sales tax exemption and octroi refund.

Definition of Eligible unit:-

A) SSI Unit: - As per definition of small scale industries government of India.

B) Pioneer Unit :- A large scale New unit set up/large scale Fixed Capital

Investment made by an Existing Unit after April 1, 1983, in Group ‘C’ or Group

‘D’ areas for which at least Final Effective Step is taken after April 1, 1983, will

be considered eligible for Pioneer Status if it satisfies any of the following

conditions, namely :-

(i) It is a New Unit with Fixed Capital investment exceeding Rs. 5 crores in

Group ‘C’ area being set up as the first unit in point of time in a Panchayat Samiti

Area in Vidarbha Region/Taluka in other Regions there is, as on April, 1, 1983,

no Existing Unit with net Fixed Capital Investment of the said order namely, Rs.

5 crores in Group ‘C’ area of Rs. 2 crores in Group ‘D’ area.

Under this category only one unit in a Panchayat Samiti Area in

Vidarbha/Taluka in other Regions will be considered eligible for Pioneer Status;

(ii) It is a New Unit with Fixed Capital Investment exceeding Rs. 25 crores being

set up in Group ‘C’ or Group ‘D’ areas.

(iii) It is an Expansion/Diversification undertaken by the Existing Unit in either

Group ‘C’ or Group ‘D’ area as an adjunct to the Existing Unit or otherwise in

the same Panchayat Samiti Area in Vidarbha area/Taluka in other Regions

involving additional Fixed Capital Investment made there under after April 1,

1983, in excess of Rs. 25 crores.

Under the Categories (ii) and/or (iii) above my number of units in a Panchayat

Samiti Area in Vidarbha area/Taluka in other Regions will be considered eligible

for Pioneer Status.

90

Table No. 2.2

Package Scheme of Incentive 1983 for Eligible SSI Units & Pioneer Unit (New

Units)

Group Industrial Promotion

Subsidy (Note 1)

Interest Subsidy (Note 2)

Electricity Duty

Exemption (Note 3)

Stamp Duty

Exemption (Note 4)

Industrial Promotion

Subsidy For

MSI/LSI

Percentage Eligibility in years

A No Subsidy No Subsidy No Subsidy

No Exemption

No Exemption No Subsidy

B

100% of Fixed

Capital Investment

3 5% No Exemption

No Exemption

75% of Fixed

Capital Investment

C 100% 5 5% 100% 100%

80% of Fixed

Capital Investment

D 100% 7 5% 100% 100% -

Pioneer Unit - 9 5% 100% 100%

97% of Fixed

Capital Investment

The sales tax incentive under the Scheme either as an exemption or Deferral.

A New Unit can get special exemption during the period of this incentive scheme as

follows :

Eligible unit in Area Quantum Ceilings (Rs. In lakhs.

Group ‘B’ and Resource Based Units

15 per cent of the Fixed Capital Investment

15.00

Group ‘C’ and ‘D’ 20 per cent of the Fixed Capital Investment

20.00

Pioneer Unit (Not being Resource based)

25 per cent of the Fixed Capital Investment (For SSI Units)

25.00

Group ‘B’ and Resource Based Units

20 per cent of the Fixed Capital Investment

7.50

Group ‘C’ and ‘D’ 25 per cent of the Fixed Capital Investment

7.50

Only New Unit and Pioneer Unit will be entitled to refund octroi duty paid to

local authority and sales tax exemption is also applicable to ‘B’,’C’,‘D’ and Pioneer Unit

as admissible under the this scheme with specified ceiling limit

91

The Government has incurred Crores of expenditures since inception of scheme

that is since 1964.

PSI Scheme 1988

The package scheme of incentive 1983 was valid for the period 1st October 1988

to 30 September 1993. This scheme covers all the industrial units in Maharashtra.

Government of Maharashtra has also adopted Geographical Groups made since

inception.



A) Industrial Promotion Subsidy (Capital Subsidy) :- The scheme provide with

which is percent of capital investment in the projects differentiated on the basis of

Groups.

B) Interest Subsidy: The interest paid on finances obtained for qualified investments

is eligible for subsidy at rates specified in the Scheme document.



D) Stamp duty exemption: - Waiver of stamp duty on transactions undertaken during

the investment period.


F) Other incentives: - Investments qualifying for promotion of Quality

Competitiveness, Research & Development, Technology Up-gradation, Water &

Energy Conservation, Cleaner Production Measures and Credit Rating will get

specified benefits under the Scheme. Sales tax exemption and octroi refund.


A) SSI Unit :- As per definition of small scale industries government of India.

B) Pioneer Unit :- A large scale New unit set up/large scale Fixed Capital

Investment made by an Existing Unit after October 1, 1988, in Group ‘C’ or

Group ‘D’ areas for which at least Final Effective Step is taken after October 1,

1988, will be considered eligible for Pioneer Status if it satisfies any of the

following conditions, namely :-

92

(i) It is a New Unit with Fixed Capital investment exceeding Rs. 5 crores in

Group ‘C’ area and 2 crore in ‘D’ area being set up as the first unit in point of

time in a Panchayat Samiti Area in Vidarbha Region/Taluka in other Regions

there is, as on April, 1, 1983, no Existing Unit with net Fixed Capital Investment

of the said order namely, Rs. 5 crores in Group ‘C’ area of Rs. 2 crores in Group

‘D’ area.

(ii) It is a New Unit with Fixed Capital Investment exceeding Rs. 25

crores being set up in Group ‘C’ or Group ‘D’ areas.

(iii) It is an Expansion/Diversification undertaken by the Existing Unit in

either Group ‘C’ or Group ‘D’ area as an adjunct to the Existing Unit or

otherwise in the same Panchayat Samiti Area in Vidarbha area/Taluka in other

Regions involving additional Fixed Capital Investment made there under after

April 1, 1983, in excess of Rs. 25 crores.

Under the Categories (ii) and/or (iii) above my number of units in a Panchayat

Samiti Area in Vidarbha area/Taluka in other Regions will be considered eligible

for Pioneer Status.

Table No. 2.3

Package Scheme of Incentive 1988 for Eligible SSI Units & Pioneer Unit (New Units)

Group Industrial Promotion Subsidy For SSI

Interest Subsidy

Electricity Duty

Exemption

Stamp Duty

Exemption

Industrial Promotion

Subsidy For

MSI/LSI Percentage Eligibility

in years

A No Subsidy No Subsidy

No Subsidy

No Exemption

No Exemption

No Subsidy

B 100% of Fixed

Capital Investment

5 5% No Exemption

No Exemption

60% of Fixed

Capital Investment

C 100% of Fixed

Capital Investment

5 5% 100% 100% 75% of Fixed

Capital Investment

D 100% of Fixed

Capital Investment

7 5% 100% 100% 90% of Fixed

Capital Investment

93

Pioneer Unit

- 10 5% 100% 100% 95% of Fixed

Capital Investment

No Industry District

- 10 5% 100% 100% 100% of Fixed

Capital Investment

The sales tax incentive under the Scheme either as an exemption or Deferral. A New Unit can get special exemption during the period of this incentive scheme as

follows:

Eligible unit in Area

Quantum Ceilings (Rs. In lakh)

MSI/LSI SSI MSI/LSI SSI Group ‘B’ 20 25 20 10 Group ‘C’ 25 30 25 15 Group ‘D’ 30 35 30 20 No Industry District

30 35 30 20

Pioneer Unit 30 - 30 - Only New Unit and Pioneer Unit will be entitled to refund octroi duty paid to




that is since 1964.

PSI Scheme 1993

The package scheme of incentive 1983 was valid for the period 1st October 1993

to 30 September 1998. This scheme covers all the industrial units in Maharashtra.

Government of Maharashtra has also adopted Geographical Groups made since

inception.




which is percent of capital investment in the projects differentiated on the basis

of Groups.

B) Interest Subsidy: - The interest paid on finances obtained for qualified

investments is eligible for subsidy at rates specified in the Scheme document.

94



D) Stamp duty exemption :- Waiver of stamp duty on transactions undertaken

during the investment period.



Competitiveness, Research & Development, Technology Up-gradation, Water

& Energy Conservation, Cleaner Production Measures and Credit Rating will

get specified benefits under the Scheme. Sales tax exemption and octroi refund.

Definition of Eligible unit :-


B) Pioneer Unit :- A Pioneer Unit shall mean and include a large scale New Unit set

up or a large Fixed Capital Investment made by an Existing Unit after 1st October

1993 in Group B/C/D/D+ areas for which at least one Final Effective Step is

taken after 1st October 1993, provided it is-

(a) A New Unit with the Fixed Capital Investment exceeding Rs. 100 crore in

Group B area or Rs. 30 crore in Group C area or Rs. 15 crore in Group D area

or Rs. 5 crore in Group D+ area, being set up as the first Unit in point of time

in a Taluka where there is, as on 1st October 1993, no such Existing Unit in

the Taluka, or

(b) A New Unit being set up with, or an Existing Unit undertaking in the same

Taluka, the Fixed Capital Investment exceeding Rs. 300 crore in Group B or

Rs. 60 crore in Group C or Rs. 30 crore in Group D area or Rs. 10 crore in

Group D+ area.

Explanation:- Under condition (a) only one Unit in a Taluka and under condition

(b) any number of Units in a Taluka will be considered eligible for Pioneer status.

Prestigious Unit :- A Prestigious Unit shall mean and include a large scale New Unit set

up or a large scale Fixed Capital Investment made by an Existing Unit after 1st October

1993 in Gadchirioli District for which at least one Final Effective Step is taken on or

after 1st October 1993, provided it is a New Unit with a Fixed Capital Investment

exceeding Rs. 100 crores.

95

Table No. 2.4

Package Scheme of Incentive 199 for Eligible SSI Units & Pioneer Unit

(New Units)

AREA MSI/LSI UNIT

SSI UNIT

NON-PIONEER PIONEER UNIT Group Per Cent of

Fixed Capital

Investment

No. of years or earlier if the

ceiling is

reached

Per cent of Fixed

Capital Investment

No. of years

Capital Investment

Per cent of Fixed

Capital Investment

No. of years or earlier if the

ceiling is

reached A - - - - - - B 60 5 80 7 100 6 C 75 7 95 9 110 8 D 90 9 110 11 120 10 D 90 9 110 11 120 10

D+ 125 12 130 15 130 12


A New Unit can get special exemption during the period of this incentive scheme as

follows :

AREA (Group)

Quantum as Per cent of Fixed Capital

Investment

Ceiling (Rs. Lakhs)

A - -

B 15 7

C 20 10

D 25 15

D+ 30 20

Only New Unit and Pioneer Unit will be entitled to refund octroi duty paid to




that is since 1964.

96

PSI Scheme 2001

The package scheme of incentive 2001 was valid for the period April 2001 to

March 2006. This scheme covers all the industrial units in Maharashtra. Government of

Maharashtra has also adopted Geographical Groups made since inception.





Groups.

B) Interest Subsidy: - The interest paid on finances obtained for qualified




D) Stamp duty exemption: - Waiver of stamp duty on transactions undertaken during






specified benefits under the Scheme. Sales tax exemption and octroi refund.



B) Other Eligible Unit :- Hotels, Poultry and Agro industries, Coir Board, Silk

Board, Cold Storage, Bio-technology units etc.

Table No. 2.5

Package Scheme of Incentive 2001 for Eligible SSI Units & Other Eligible Unit.

AREA (Group)

Quantum as Per cent of Fixed Capital

Investment

Ceiling (Rs. Lakhs)

A - - B - - C 20 10 D 30 20

D+ 35 25 No Industry District 40 35

97


Only New Unit and Pioneer Unit will be entitled to refund octroi duty paid to local

authority and sales tax exemption is also applicable to ‘B’,’C’,‘D’ and as admissible

under the this scheme with specified ceiling limit


that is since 1964.

PSI Scheme 2007


March 2013. This schemes covers all the industrial units in Maharashtra. Government of




a) Industrial Promotion Subsidy (Capital Subsidy) :- The scheme provide with


Groups.

b) Interest Subsidy: - The interest paid on finances obtained for qualified


c) Electricity duty exemption: - Scheme provides exemption from payment of


d) Stamp duty exemption: - Waiver of stamp duty on transactions undertaken during


e) Power Tariff Subsidy :- Fixed subsidy is granted per unit consumption basis

f) Other incentives: - Investments qualifying for promotion of Quality



specified benefits under the Scheme.


A) MSMED Unit :- Micro Enterprises where capital investment not exceeding

rupees 25 lakhs, Small Enterprises where capital investment more than 25 lakhs

but not exceeding 5 crores, Medium Enterprises where capital investment more

than 5 crores but not exceeding 10 crores.

98

B) Large Scale Unit :- Large Scale Unit have investment more than medium

enterprises but less than mega projects

C) Mega Project :- Industrial Projects with investment more than Rs.500 Crores or

generating employment for more than 1000 persons in A & B area or investment

more than 250 Crores or generating employment for more than 500 person in rest

of Maharashtra.

Table No. 2.6

Package Scheme of Incentive 2007 for MSMED Units (New Units) LSI & Medium

Enterprises.

Taluka / Area

Classification

Ceiling as per cent of Fixed Capital Investment

Number of years Stamp Duty Exemption

(Note 4)

Power Tariff Subsidy (Note 5)

Micro & Small

Manufacturing

Enterprises

Medium Manufact

uring Enterprises / LSI

Micro & Small

Manufacturing

Enterprises

Medium Manufacturing Enterprises

/ LSI

A - - - - No Exemption No Subsidy

B 20 - 6 - No Exemption

Re. 0.50 / Re. 1.00 per unit

C 30 20 7 5 100% Re. 0.50 / Re. 1.00 per unit

D 40 25 8 6 100% Re. 0.50 / Re. 1.00 per unit

D+ 50 30 9 7 100% Re. 0.50 / Re. 1.00 per unit

No Industry District 60 35 10 8 100% Re. 0.50 / Re.

1.00 per unit

The large scale units can get the benefit from package scheme of incentive, under

this scheme large scale unit established under ‘C’ , ‘D’, ‘D+’ areas and no industry

district and naxalism affected area can get the benefit respectively 30%, 40%, 50%, 70%,

& 80% of eligible investment made during the operational period of scheme. They can

also get the exemption in stamp duty and electricity duty @100% except ‘A’ & ‘B’ area

in Maharashtra.

The package of incentive also available for MSMED units who are going to

expansion. They get subsidy for ‘B’ area 15%, ‘C’ areas 30%, ‘D’ areas 52.5%, ‘D+’

99

areas 60%, No industry district 67.5%, & Naxalism Affected Areas 75% with eligible

invested made and they also get 100% exemption in stamp duty.


that is since 1964.

PSI Scheme 2013


March 2018. This schemes covers all the industrial units in Maharashtra. Government of




g) Industrial Promotion Subsidy (Capital Subsidy) :- The scheme provide with

which is the percent of capital investment in the projects differentiated on the

basis of Groups.

h) Interest Subsidy: - The interest paid on finances obtained for qualified


i) Electricity duty exemption: - Scheme provides exemption from payment of


j) Stamp duty exemption: - Waiver of stamp duty on transactions undertaken during


k) Power Tariff Subsidy :- Fixed subsidy is granted per unit consumption basis

l) Other incentives: - Investments qualifying for promotion of Quality


Energy Conservation,

Cleaner Production Measures and Credit Rating will get specified benefits under

the Scheme.


D) MSMED Unit: Micro Enterprises where capital investment not exceeding rupees

25 lakhs, Small Enterprises where capital investment more than 25 lakhs but not

exceeding 5 crores, Medium Enterprises where capital investment more than 5

crores but not exceeding 10 crores.

E) Large Scale Unit :- Large Scale Unit have investment more than medium

enterprises but less than mega projects

100

F) Mega Project :- Table shows as under :

Rs. In crore.

Enterprises Area of classification

Min Fixed Capital Investment

Min Direct Employment

Mega Project A & B C D & D+ No industry district & Naxalite affected area Entire State

750 500 250 100

1,500 1,000

500 250

Ultra Mega Project Entire State 1,500 3,000

Table No. 2.7

Package Scheme of Incentive 2013 for MSMED Units (New Units)

Group Industrial Promotion

Subsidy (Note 1)

Interest Subsidy (Note 2)

Electricity Duty

Exemption (Note 3)

Stamp Duty Exemption

(Note 4)

Power Tariff

Subsidy (Note 5)

Percentage Eligibility in years

A No Subsidy 7 No Subsidy

No Exemption

No Exemption

No Subsidy

B 20% 7 5% No Exemption

No Exemption

Re. 0.50 / Re. 1.00 per unit

C 40% 7 5% 100% 100% Re. 0.50 / Re. 1.00 per unit

D 70% 10 5% 100% 100% Re. 0.50 / Re. 1.00 per unit

D+ 80% 10 5% 100% 100% Re. 0.50 / Re. 1.00 per unit

No Industry District

90% 10 5% 100% 100% Re. 0.50 / Re. 1.00 per unit

Naxalism Affected

Areas 100% 10 5% 100% 100%

Re. 0.50 / Re. 1.00 per unit

The large scale units can get the benefit from package scheme of incentive, under

this scheme large scale unit established under ‘C’ , ‘D’, ‘D+’ areas and no industry

district and naxalism affected area can get the benefit respectively 30%, 40%, 50%, 70%,

& 80% of eligible investment made during the operational period of scheme. They can

also get the exemption in stamp duty and electricity duty @100% except ‘A’ & ‘B’ area

in Maharashtra.

101

The package of incentive also available for MSMED units who are going to

expansion. They get subsidy for ‘B’ area 15%, ‘C’ areas 30%, ‘D’ areas 52.5%, ‘D+’

areas 60%, No industry district 67.5%, & Naxalism Affected Areas 75% with eligible

invested made and they also get 100% exemption in stamp duty.


that is since 1964.

As per Economic Survey of Maharashtra 2013-14 in order to encourage the dispersal

industries to less developed areas. Under the packeage scheme of incentive an amout of

Rs. 750 crores, was disbursed in 2009-10, and in following years 2010-11 Rs.700 crores,

2011-12 Rs.2366 crores, 2012-13 Rs.2480 crores, 2013-14 Rs.2250 crores.31

Gujrat state has also encouraged industries to establish in backward areas in Gujarat.

Gujrat state has disbursed 606.24 crore (in 2008-09), 789.81 crore(in 2009-10), 895.25

crore (in 2010-11), 790.05 crore (in 2011-12) and 1031.36 crore (in 2012-13).32

Karnataka State has also disbursed in promotional scheme of incentive Rs.73,470 lakh.33

Tamilnadu government has also taken inactive in this regard. They also disbursed

industrial promotions subsides to industries an amount of Rs.939.25 crores during 2010-

11 and an amount of Rs.800.97 crores during the 2011-12.34

On the basis of above discussions few observations are summarized as follows;

1) It is observed that since last three decade, central and state government has been

remarkable contributed to industrialization in backward area of India.

2) Incentive has been recognized as driving force which encourages the entrepreneur

to undertake industrial activity in backward areas central and state government

has been giving incentives to entrepreneur in industrially backwards areas.

3) It was noticed that central government has been giving subsidies’, exemption,

concession, etc through following ministry.

A. Ministry of MSME

I. Schemes of fund for regeneration of traditional industries (SFURTZ)

II. Scheme of surveys studies and policy research

III. International co-operation scheme.

Development commissioner (MSME)

1. Scheme for capacity buildings strengthening of data base and advocacy by

industry/Enterprises associations.

2. Micro and small entrepreneur cluster development program (MSECDP)

3. Market development assistance scheme for SSI Exporters (SSI-MDA)

102

4. Integrated infrastructure development (IID) sub-summed under (MSECDP)

5. NMCP schemes

a. Building awareness on intellectual property right

b. Setting up of new mini tool rooms under PPP

c. Enabling manufacturing sector be competitive through quality management

standards and quality technology tools.

d. Support for entrepreneurial and managerial development of SME

e. Lean manufacturing competitiveness scheme

f. Scheme for integrated textiles parks(STTP)

g. Integrated handloom cluster development programme.

h. Babasaheb Ambedkar hastshilp vikas yojana (AHVY)

i. Special handicraft Training project.

B. Ministry of commerce (including Department of industrial Policy and promotion)

1. Assistance to states for developing export infrastructure and Allied activities

(ASIDE)

2. Industrial Infrastructure Up gradation Scheme (IIUS) – recast

3. Revised Market Access Initiative scheme

4. Market Development Assistance Scheme

5. HRD Mission for Leather

C. Ministry of Labour ( Including Director General Employment and Training)

1. Modular Employable Skills (MES) Under skill Development Intuitive Scheme

(SDIS)

2. Up gradation of government IT is through public private partnership

3. Rejuvenation, Modernization and Technology Up gradation of the Coir Industry

4. Scheme for development of AYUSH Clusters

5. Assistance for Exchange Programme/ Seminar/ Conference/ Workshop on

AYUSH

D. Ministry of Food Processing Industries

1. Mega Food parks scheme

2. Scheme for Cold Chain, value addition and preservation infrastructure

3. Scheme for setting up/ up gradation of food testing laboratories

4. Scheme for promotional activities

E. Department of rural development

1. Special Projects under Swarnjayanti Gram Swarozgar Yojana (SGSY)

103

F. Department of Science and Technology

1. Industrial development Programme (IDP)

2. International S & T Cooperation(ISTC)

3. Joint Technology Projects under STAC/IS-STAC

4. State Science and Technology programme (SSTP)

G. Department of Scientific and Industrial Research (DSIR)

1. International Technology Transfer Programme

2. Consultancy Promotion Programme

3. Technology Information Facilitation Programme

4. Technology development and Utilization programme for Women

5. R &D Grants For New Product / Process Development

6. Technology Management Programme

H. Ministry of Finance

1. Viability Gap Funding

I. Comparison of facilities and Concessions to Industries in Maharashtra, Gujarat,

Karnataka, Tamilnadu and Andhra Pradesh.

1. Capital Subsidy

J. Vat and centeral sales tax exemption

K. Export subsidy

L. Interest subsidy

M. Stamp duty exemption

N. Incentives for research and developments

O. Incentive for sick unit

P. Marketing Support/Price Preference

Q. Technical support

R. Incentive to thrust sectors

104

References:-

1) Todaro, Michael P,: Smith, Stephen C. (2009). Economic Development (10th ed.).

Addison Wesley. P.839. ISBN 978-0-321-48573-1.

2) Gove, P.B. & other 1961. Webster’s Third New International Dictionary. Springfield,

MA : G&C Merriam Company

3) Ansley, C.F. & others 1940. The Columbia Encyclopedia in One Volume.

Morningside Heights, NY: Columbia University Press.

4) P30- “The English Reformation: crown power and religious change, 1485-1558”.

Colin Pendrill, Heinemann, 2000 ISBN 0435327127.

5) Circular NO: PMEGP/Policy/M-939/08-09, Dated on 10/04/2008, by Central

Government Authority (KVIC).

6) Central government notification No. 6(1)/DBA-11 dated on 01-06-1998

7) Published in Part 1. Section 1 of the Gazette of India Extra – ordinary dated

27.7.1971 ( No,102) vide Notification No F.6(26)/71-IC dated 23.7.1971 and

amended vide Notification No.6(26)/71-IC dated 28.2.1974 published in the part I.

Section I of the Gazette of India Extra, ordinary dated 28.2.1974 (No 103) and

Notification No. 6/3/15 RD dated 19.7.1978. Notification No.11/1/90 DBA-II dated

28.7.1993 and 29.09.1997. by the Central Governmental Authority.

8) Center government Resolutions to industrial policy 1991 Annexure 2A, Read with

vide Press Note No.13/11/89-DBA-I dated on 16.10.1989.

9) Annual report of Ministry of Micro, Small and Medium Enterprises Annexure –I,

Page No. 224.


Page No. 219.


Page No. 219.

12) Research paper named Challenges and opportunities for Micro, Small and Medium

Enterprises (MSMEs) sector in India by Shri KrishanDuhan, Chaudhari Devi Lal

University, Sirsa, Haryana, and Journal of International Academic Research for

Multidisciplinary, Volume 2, Issue4, may 2014.

13) Report of Inter-Ministerial committee for Boosting Exports from MSME sector,

Ministry of Finance, July 2013, Page (i).

14) MSME Annual Report 2012-13, Annexure II, Page no.239.


16) Annual report 2012-13, Ministry of Commerce and Industry, Govt. of India, Table

No. 5.1

105

17) DSIR Annual report 2010-11, Annexure 1,Page no. 124.

18) http://ficcci.com/sector/36/project/MSME_sector_draft.pdf. Annual report 2012-13,

Ministry of Commerce and Industry, Govt. of India, Table No. 5.4

19) Annual report 2012-13 of ministry of labour and employment government of India,

Page no. 308.


21) Annual report 2013-14 of Ministry of Food Processing Government of India, Page

no. 134 to 136.

22) Annual report 2013-14 Ministry of Food Processing Government of India, Page no.

137 to 141.

23) Annual report 2012-13, Ministry of commerce and Industry, govt. of India, Table No.

5.6.

24) Various website of government directorate of industries of concern state and CII and

FICCI report on incentive scheme. Report of Research Consultant 2012, Ministry of

MSME.

25) Government of Maharashtra Industries, Energy and Labour Department Resolution

No. DIL -1082/(4077)-IND-8 Mantralaya, Bombay-400032, dated the 4th May 1983.


No. DIL -1093/(8889)-IND-8 Mantralaya, Bombay-400032, dated the 7th May 1993.


No. DIL -1088/(6603)-IND-8 Mantralaya, Bombay-400032, dated the 31st sep. 1988.


No. DIL -1021/(CR-73)-IND-8 Mantralaya, Bombay-400032, dated the 31st March

2001.


No. PSI-1707/(Cr-50) IND-8 Mantralaya, Bombay-400032, dated the 30th march

2007.


No. PSI 2013(CR-54)-IND-8 Mantralaya, Bombay-400032, dated the 27th June 2013

31) Economic survey of Maharashtra 2013-14, Page no. 116.

32) Social Economic review, Gujrat State, 2013-14, page no.264.

33) Economic survey of Karnataka 2013-14, Economic survey of Karnataka 2012-13.

34) Economic Survey of Tamilnadu 2011-12. Page no. 20

Central & State Government’s Incentives Schemesshodhganga.inflibnet.ac.in/bitstream/10603/74769/9/09_chapter2.pdfUnder this scheme eligible manufacturing units are provided financial

Documents