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MP Industrial Promotion Policy- a Gateway for Businesses

The state of Madhya Pradesh over the years has gained a significant position in the country based on infrastructure and economic growth. Over the period of time the state has developed a healthy and balanced infrastructure and economic growth coupled with favourable policies. As a result of this nurturing, the state’s total GDP during 2007-08 to 2012-13 grew at a CAGR of 1.3% where as India’s total GDP grew at a CAGR 7.15%. So, in order to achieve inclusive growth and bring economic prosperity to the people through sustainable industrialization; employment generation and skill enhancement, that the state launched it Industrial Promotion Policy in the year 2014.

Key objectives:

  • To simplify procedures to ensure effective implementation of the policy
  • To increase ease of doing business to facilitate investors
  • To achieve higher and sustainable economic growth by accelerating the growth of manufacturing and service sectors
  • To generate employment
  • To encourage growth in MP’s thrust sectors i.e. Agribusiness and Food processing, Textiles, Automotive and Auto components, Tourism, Pharmaceuticals, Bio-technology, IT/ITeS, Healthcare and Logistics & Warehousing

Main highlights:

Improving of business environment-ease of doing business:

  • The policy is aimed at bringing regulatory reforms to facilitate ease of doing business by strengthening the Single Window System.
  • ‘Investment Relationship Managers’ would be appointed for speedy implementation of investment proposals.
  • Cabinet Committee on Investment Promotion (CCIP) would be constituted with Chief Minister as Chairman and Ministers of Finance, Commercial Taxes and Industries Department as members to deal with all issues relating to Industrial promotion.

Industrial growth: Land concessions- 50% assistance subject to a maximum of Rs. 1 cr. each would be provided to medium, large and mega scale industrial units for developing power, water and road infrastructure provided that the investor acquires private land or gets undeveloped government land for setting up of project.

Green industrialization: MSME,SMEs, Large and Mega industries would be provided a capital subsidy of 50% up to a maximum of Rs. 25 lakh for investment in setting up of waste management systems (such as ETP, STP etc.), pollution control devices, health and safety standards, water conservation/harvesting etc.

Fiscal assistance: These incentives are available only to manufacturing sector. But once eligible for assistance under this policy, a unit cannot avail any other benefits from any schemes.

Sl. No Type of Unit Assistance
1 Micro scale industrial unit A manufacturing enterprise having an investment less than INR 25 lakh in plant & machinery
2 Small scale industrial unit A manufacturing enterprise having an investment between INR 25 lakh and INR 5 crore in plant &machinery
3 Medium scale industrial unit A manufacturing enterprise having an investment between INR 5 crore and INR 10 crore in plant & machinery
4 Large scale industrial unit A manufacturing enterprise having an investment more than INR 10 crore in plant & machinery
5 Mega scale industrial unit An unit having an investment more than:

·         INR 100 crore in plant &machinery

·         INR 25 crore in plant &machinery in sectors including Food Processing, Bio-technology, Herbal &Minor forest produce, Tourism & IT

Capital subsidy: SMEs would be eligible for a capital subsidy of 15% amounting to a maximum of Rs. 15 lakh

Interest Subsidy:

Type of Units Interest subsidy
Micro scale industrial unit 5% with annual ceiling of INR 3 lakh for 7 years
Small scale industrial unit 5% with annual ceiling of INR 4 lakh for 7 years
Medium scale industrial unit 5% with annual ceiling of INR 5 lakh for 7 years

Entry tax exemption:

  • SME, MSME and large scale industries would be exemption from tax for 5 years if they have made an investment up to Rs. 500 cr. in plant and machinery.
  • Mega scale industries would be exempted for 7 years if they have made investments above Rs. 500 cr. in plant and machinery.

VAT/CST concessions: All units except for Textiles would be eligible

SL No. Unit Type Eligibility under Priority Blocks Eligibility for all other remaining districts
1 Micro and small manufacturing enterprises having fixed capital investment of at least INR 1 cr. and Medium scale industrial unit 50% for a period of 7 years 50% for a period of 5 years
2 Large & Mega scale industrial unit 75% for a period of 10 years 75% for a period of 7 years

(*Priority blocks: Blocks having no large/mega scale industrial unit as on policy notification date)

Fiscal assistance for textile units Click here

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