Post on 05-Oct-2020
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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
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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
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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%
subsidy of their capital investment subject to the ceiling limit of Rs. 15 lakh.
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iii) Under this scheme the Nucleus Plants in ‘A’ category districts are entitled 10%
subsidy of their capital investment subject to the ceiling limit of Rs. 10 lakh.
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
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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.
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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
10 out of 15 initial assessment years
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
10 out of 15 initial assessment years
100% for 10 consecutive assessment years
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)]
10 out of 15 initial assessment years
100% for 10 consecutive assessment years
6. An undertaking which undertakes substantial renovation and modernization of the existing network of transmission or distribution lines [Sec. 80-IA(4)(iv)(c)]
10 out of 15 initial assessment years
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
10 out of 15 initial assessment years
100% for 10 consecutive assessment years
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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)]
1-4-1993 to 31-3-2004 12 (for co-op. society) & 10 (for others)
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)]
1-4-1994 to 31-3-2004 12 (for co-op. society) & 10 (for others)
100% for 5 initial asst. years & 25% (30% in case of company) for the remaining asst. years
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)]
1-4-1994 to 31-3-2004 12 (for co-op. society) & 10 (for others)
100% for 3 initial asst. years & 25% (30% in case of company) for the remaining asst. years
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)]
1-4-1999 to 31-3-2004 12 (for co-op. society) & 10 (for others)
100% for 5 initial asst. years & 25% (30% in case of company) for the remaining asst. years
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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)
100% for all 7 initial asst. years
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)
100% for all 7 initial asst. years
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)
100% for all 7 initial asst. years
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
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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.
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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.
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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.
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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.
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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.
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6) Market Development Assistance Scheme for SSI exporters (SSI-MDA):- The
scheme was started on in the year of 2001.
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
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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)
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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.
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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
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(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) :-
scheme was started on in the year of 1999.
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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
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The scheme will be known as Credit linked Interest Subsidy in Technical Textiles.
Assistance available:-
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:
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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.
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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
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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.
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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.
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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.
Assistance available :-
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 available :-
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
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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,
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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
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Rs. 5 crores will be considered cluster. Scheme of financial assistance for setting up of
specialized skill development centeres.
Assistance available :-
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.
Assistance available :-
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
Assistance available :-
• 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 :
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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.
Assistance available:-
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.
Assistance available :-
• Need based support
Financial Assistance for safety measures and protection from occupational
hazards in Gems & Jewellery sector.
Assistance available:-
• 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.
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Assistance available:-
• 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 available :-
Assistance @ 20% of infrastructure cost excluding land cost subject to maximum Rs. 1
Crore Support to auxiliary industries for value addition.
Assistance available:-
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
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Name of the Scheme :-
Financial Assistance to Industrial Estates / Parks in Public Private Partnership (PPP)
mode.
Quantum of Assistance:-
• 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
Name of the Scheme :-
Assistance of Critical Infrastructure Projects.
Quantum of Assistance:-
• 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.
Quantum of Assistance:-
• Industrial Park / Estate will be provided an amount upto Rs. 10 crores for link
infrastructure.
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• 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
Name of the Scheme :-
Financial Assistance to Industrial Estates / Parks in Public Private Partnership (PPP)
mode.
Quantum of Assistance :-
• 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 of Critical Infrastructure Projects.
Quantum of Assistance:-
• 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.
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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
Name of the Scheme :-
Financial Assistance to Industrial Estates / Parks in Public Private Partnership
(PPP) mode.
Quantum of Assistance:-
• Viability Gap Funding of upto 20% of the landed project cost through GIDB.(In
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.
Assistance available :-
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 available :-
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
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institutions/ hiring of experts should not exceed 3% of project cost. Scheme of financial
for setting up State Level Anchor Institute.
Assistance available :-
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.
Assistance available:-
• 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
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• 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.
Assistance available :-
• 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.
Assistance available :-
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.
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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.
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.
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 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
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
The Government has incurred Crores of expenditures since inception of scheme
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.
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.
94
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.
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 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
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 :
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
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
The Government has incurred Crores of expenditures since inception of scheme
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.
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.
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) 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
The sales tax incentive under the Scheme either as an exemption or Deferral.
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
The Government has incurred Crores of expenditures since inception of scheme
that is since 1964.
PSI Scheme 2007
The package scheme of incentive 2007 was valid for the period April 2007 to
March 2013. This schemes 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.
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.
Definition of Eligible unit:-
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.
The Government has incurred Crores of expenditures since inception of scheme
that is since 1964.
PSI Scheme 2013
The package scheme of incentive 2013 was valid for the period April 2013 to
March 2018. This schemes 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.
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
investments is eligible for subsidy at rates specified in the Scheme document.
i) Electricity duty exemption: - Scheme provides exemption from payment of
electricity duty to all eligible units to the extent of eligible period.
j) Stamp duty exemption: - Waiver of stamp duty on transactions undertaken during
the investment period.
k) Power Tariff Subsidy :- Fixed subsidy is granted per unit consumption basis
l) 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.
Definition of Eligible unit:-
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.
The Government has incurred Crores of expenditures since inception of scheme
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
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8) Center government Resolutions to industrial policy 1991 Annexure 2A, Read with
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9) Annual report of Ministry of Micro, Small and Medium Enterprises Annexure –I,
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10) Annual report of Ministry of Micro, Small and Medium Enterprises Annexure –I,
Page No. 219.
11) Annual report of Ministry of Micro, Small and Medium Enterprises Annexure –I,
Page No. 219.
12) Research paper named Challenges and opportunities for Micro, Small and Medium
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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.
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16) Annual report 2012-13, Ministry of Commerce and Industry, Govt. of India, Table
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105
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20) MSME Annual Report 2012-13, Annexure II, Page no.239.
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