Micro, Small & Medium Enterprises (MSME)
Small and the medium enterprises have played a significant role in creating employment opportunities in India. Currently, the MSME sector employs nearly 40% of India’s work force, contributes 45% in nation’s manufacturing output, and accounts for 40% of the exports. But the poor adoption of technology and lack of professional skills have resulted in poor productivity. MSME is very important to India due to three reasons: 1) it doesn’t require a hefty amount as in the case of big companies, 2) It provides a platform for innovation and 3) it provides employment opportunities for a large section of work force.
Andhra Pradesh which is home to 20 lakh MSMEs. It provides employment opportunities to nearly 25% of work force, and officials estimate that it can attract 1200 crore worth of investment. Thus, the government is keen in promoting this sector to boost the employment opportunities.
The AP government is providing a conducive environment for MSMEs. The fiscal benefits have been listed below:
- Stamp duty and transfer duty will be reimbursed fully to industries on purchase of land meant for industrial use for the first time.
- Stamp duty for land/shed/buildings and mortgages will be reimbursed fully.
- 100% of net VAT/CST/SGST will be reimbursed for a period of 5 years to micro and small businesses and 75% to medium industries for 7 years.
Apart from the incentives and subsidiary provided in IP 2015-20, the MSME Policy 2015 of Andhra Pradesh will help the government to accelerate the development of small industries. The first requirement for any industry is a business friendly environment and MSME policy ensures it through providing financial and infrastructure support. The highlights of this scheme are:
- AP has emerged as power surplus state in 2015, according to energy secretary Ajay Jain. He further said that it will provide 24/7 power supply to the industries. The power supply will be provided at a cheaper rate in comparison with many other industrialized states.
- Fixed power cost reimbursement is proposed to be provided at Re. 1 per unit for the first five years.
- The government has proposed that 15% of total land area for MSME industries in any of 2 of developed Industrial Parks of APIIC in every district, which will not be less than 40 acres of developed land in every district.
- 25% rebate will be provided in land cost limited to INR 10 lakh in Industrial Estates/Parks.
- 10% of total land plots under this scheme will be allocated to women.
Workforce – Skill Up-gradation
- To meet the requirement of skilled labour force, the government will identify industry specific skill sets and provide courses at different levels of education.
- The government will reimburse 50% of the cost involved in skill up-gradation and training the local manpower limited to INR 5000 per person for 10 persons in micro and 20 in the case of medium and small industries.
Capital and Funds
- The AP government has set aside a 100 crore amount to revive the MSMEs across the state for the period 2015-16.
- The state government also understands that there is a need of creating such institutions which can provide financial assistance to MSMEs. Hence, the government is planning to facilitate the loan facility through Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Scheme. The government of India (GoI) has given instructions to the financial institutions to sanction collateral free loans, up to ₹1crore by charging additional (maximum) annual service fee on such loans as follows: 1st year – 1.5% and 2nd year onwards – 0.75%
- Micro and small businesses will get 15% investment subsidy on fixed capital investment subject to a maximum of 20 lakhs.
- 25 Acres of land in every district will be reserved for MSME parks. The government will ensure the required infrastructure through roads, industrial water supply, power and effluent treatment plant.
How to take advantage of this policy?
The state government will provide MSME Facilitation Desk which will serve as a one stop solution to answer all the queries and questions.
Visit https://www.apindustries.gov.in to apply for this scheme.
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