Madhya Pradesh to launch scheme for development of SMEs

The MP government will soon launch a new ancillary development scheme for Small and Medium Enterprises (SMEs), amend Land Allotment Rules 1974 (amended in 1999) for industries (SMEs), create a task force for the potential areas of SMEs like pharma and food processing, follow the 45 day payment rule for SMEs.

If launched, the new allotment rules will ensure facilities for services necessary for industrial areas.

However, the land prices in industrial areas will go up for setting up a small business. A meeting, regarding this, is likely to take place tomorrow in Bhopal.

The recently created State Advisory Council discussed the issues of industry at Khajuraho yesterday evening at its maiden meet as a part of "Destination Madhya Pradesh", which was jointly organised by Ficci and the state government.

However, the council skipped the prime agenda "Amendment to Industrial Promotion Policy 2004" for unknown reasons, a non-government member of the council told Business Standard.

The council also decided to meet at regular intervals of four months each year to monitor the progress of industrial development and target double-digit growth (at least 15 per cent) in the industry.

"Chief Minister Shivraj Singh Chouhan has given us (industry) an assurance to fully support amendments of rules and faulty process to boost growth in SME sector," said RS Goswami, who represented the council on behalf of SMEs and confirmed that the chief minister had agreed upon the new policy for ancillary development and amendments to Land Allotment Rules 1974, continuation of existing Udyog Mitra Yojana, formation of task forces for potential sectors like pharma and food processing and strengthening of small-scale sector.

According to him, the state government has been urged to follow the 45-day payment system introduced by the Centre. At present, the PSUs and government agencies purchase materials from the SSIs and SMEs but make payments within 90-120 days.

In the new system if a PSU or government agency fails to make payment to an SME in 45 days, a penal-interest of four times of prevailing bank rates will be levied on the buyer.

Despite the fact that the department of industries had already finalised the draft of amended policy, the council ignored a discussion on amendments to Industrial Promotion Policy 2004.

The launch of amended policy is pending since May this year when department of industries invited suggestions to the existing policy.