Odisha to offer 25% capital investment subsidy to new MSEs

New policy will replace the Odisha MSME Development Policy-2009, which is now in force

Entrepreneurs wanting to set up new micro and small enterprises (MSEs) can look forward to a host of incentives as the Odisha government readies a new enabling policy for sustainable development of MSME (micro, small and medium enterprises) sector.

The new industrial MSME units, as per the draft Odisha MSME Development Policy-2015, will enjoy capital investment subsidy of 25 per cent on the fixed capital investment with upper limit of benefit fixed at Rs one crore.

Similarly, scheduled caste, scheduled tribe, women and technical degree and diploma holding entrepreneurs and units coming up in the backward region will be entitled subsidy of 12 per cent on fixed capital investment with an upper limit of Rs 10 lakhs.

It may be noted that the draft policy, after finalisation, will replace the Odisha MSME Development Policy-2009, which is now in force.

"The capital investment subsidy shall be governed as per rules and guidelines to be notified in due course. The terms and conditions and eligibility for availing subsidy under the scheme shall be devised so as to ensure proper targeting of genuine enterprises who shall be recommended by a State Level Apex Committee, to be constituted for the purpose", read the draft policy.

Women entrepreneurs setting up new MSEs will be entitled to additional two years fiscal incentives relating to VAT (valued added tax) under Industrial Policy Resolution (IPR)-2015.

The draft policy also talks of measures for revival of the sick units. It has proposed to set up a corpus fund of Rs 100 crore for sick unit revival.

A committee will be formed at the district level under the chairmanship of the collector with representatives from the relevant departments to accord approval for disbursement of fund from the corpus. The fund for revival of sick units will be utilized through a variety of mechanisms such as reimbursement of 50 per cent cost towards preparation of diagnostic studies of sick units with a maximum of Rs 25,000, 4 per cent interest subsidy to all identified and eligible sick units with maximum rebate of Rs one lakh per year for a maximum period of three years.

The funds will also be sanctioned to the sick MSME units for the collateral free loans for meeting marketing expenditure and relief in energy charges.

The soon to be finalized policy also speaks about ensuring adequate flow of institutional credit to MSMEs, a major enabler for the survival and growth of the sector.

Apart from identifying and promoting existing clusters of MSMEs, the state government will initiate steps for promoting new clusters of ancillary and downstream units at industrial hubs like Kalinga Nagar, Paradeep, Dhamra, Gopalpur, Angul, Dhenkanal, Sambalpur, Jharsuguda and Keonjhar.

"The state MSME department has sought suggestions from the industry associations of the state. We will soon submit a suggestion to the department", said Ramesh Mohapatra, President, Utkal Chamber of Commerce and Industry (UCCI), the apex industry body of the state.