Govt announces sops for micro,small and medium enterprises

Responding to the persistent criticism by the Opposition Congress that the Modi government favours only big corporate houses in Gujarat...

Written by Express News Service | Gandhinagar | Published:February 28, 2009 1:51 am

Under the scheme for assistance,interest subsidy at 7% will be available for micro units and 5% for small and medium enterprises

Responding to the persistent criticism by the Opposition Congress that the Modi government favours only big corporate houses in Gujarat,the government on Friday announced a slew of incentives for the development of micro,small and medium enterprises (MSMEs). The move also aims to make them more competitive.

The Congress has been consistently accusing the BJP government of “protecting the interests of only a few major corporate houses,and ignoring the plight of MSMEs” in the state. Maintaining that over 60,000 small scale industrial units across the state have downed their shutters,the Congress leaders have also been highlighting the plight of thousands of workers rendered jobless.

Gujarat Minister of State for Industries Saurabh Patel announced a “scheme for assistance to micro,small and medium enterprises” in the House. He also announced similar schemes for the development of the gems and jewellery and textile and apparel sectors,besides two other schemes for “enhancement of technical competence and manpower” and for “improving industrial infrastructure”.

Following the announcement,the state Industries Department issued a 12-page government resolution containing details of the incentives. The scheme comes into force with immediate effect,and will remain in operation for the next five years.

Under the scheme for assistance,interest subsidy at 7 per cent will be available for micro units,while it will be 5 per cent for small and medium enterprises. The maximum amount of interest subsidy will be Rs 25 lakh per annum for five years. To promote venture capital funding for MSMEs,the government will provide funds to financial institutes/banks that have expertise in operating such funds. Maximum amount to be given to such funds will be Rs 10 crore.

For the rehabilitation of sick units,the government will provide interest subsidy at 5 per cent per annum (limited to Rs 10 lakh per year for three years) on additional finance for rehabilitation disbursed by banks. Maximum subsidy of Rs 1 lakh will be provided towards the cost of diagnostic study.

The scheme also provides for maximum assistance of Rs 1 crore for a group of at least 10 MSMEs going for acquisition of appropriate technology,and also the assistance of Rs 50 lakh for contract/sponsored research work. Maximum assistance of Rs 10 lakh will be provided to any unit towards expenditure for obtaining domestic patents. The assistance can be enhanced to Rs 25 lakh for international patents by a company.

For market development support,maximum of Rs 2 lakh will be available for MSMEs for packaging design for a period of five years,while Rs 5 lakh will be provided to the units for participating in international trade fair outside India once in five years. Industry associations wanting to set up convention/trade centre will be given assistance upto Rs 5 crore once in five years.

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