MSME POLICY-2022 – bds-vedanta.com

Summary of MSME Policy – 2022

Objectives of the Policy

To make Odisha a leading state in the MSME sector by creating a conducive ecosystem for the growth and development of MSMEs.
To promote the growth of new micro, small, and medium-sized enterprises in the State.
To encourage expansion, scaling up and diversification of existing MSMEs.
To facilitate economic empowerment of women entrepreneurs, entrepreneurs from industrially backward region and entrepreneurs from weaker sections including SC, ST and persons with disabilities.
To facilitate scaling up of women SHG enterprises.
To enable growth of Odisha’s focus sectors.
To provide easier access to domestic and international markets.
To make concerted efforts to encourage MSMEs to adopt and practice green initiatives, sustainability and waste management.

Specific Initiatives under the Policy

Setting up of 100 MSME parks and 1000 MSME clusters across the state.
Providing interest subsidy of 50% on loans up to Rs. 5 crore for new and existing MSMEs.
Capital investment subsidy of 25% for setting up new MSME units in the industrially backward districts of Odisha.
Exemption from stamp duty and registration fees for the transfer of industrial land.
Exemption from electricity duty for the first five years of operation for new MSME units.
Rebate of 50% on electricity duty for the next five years of operation for new MSME units.
Financial assistance for technology upgradation.
Capacity building and skill upgradation programs for MSMEs.
Support for export promotion.

Cluster Development

Often MSMEs are of smaller in size and have limitation in achieving economy of scale, negotiation, specialization, access to strategic information, which restrict them in achieving the expected level of business. Cluster approach envisages overcoming such limitations and maximizing their opportunities.
The MSME Department will promote and facilitate cluster development for potential products, including the focus sector products of Odisha, One District One Product (ODOP) and others.

Focus Sectors

The Policy identifies the following eight sectors as Focus Sectors:

Automobile & Auto Components
Plastics & Polymers
Steel & Stainless Steel
Defence Equipment
Aluminium
Pharmaceuticals
Medical Equipment
Apparel and Textiles

Incentives

Incentive Name	Incentive Particulars
Land Incentives	Enterprises with investment in Plant & Machinery up to INR 10 crores: 100% up to 5 acres Enterprises with investment in Plant & Machinery more than INR 10 crores and up to INR 50 crores: 75% up to 25 acres
Stamp Duty Exemption	Enterprises with investment in Plant & Machinery up to INR 10 crores: 100% of applicable stamp duty Enterprises with investment in Plant & Machinery above INR 10 crores and up to INR 50 crores: 75% of applicable stamp duty
Exemption on Electricity Duty	New enterprises with investment in Plant & Machinery up to INR 50 crores shall be exempted from the payment of electricity duty up to a contract demand of 750 KVA for a period of 5 years from the date of commencement of production
Incentive for Fixed Capital Investment	New and existing enterprises undertaking Expansion/ Modernization/ Diversification (E/M/D) with investment in Plant & Machinery up to INR 10 crores shall be eligible for CIS in the following manner: New and existing enterprises undertaking E/M/D: 25% of capital investment made in Plant & Machinery with a maximum limit of INR 2 crores only. New and existing enterprises undertaking E/M/D owned by SC, ST, persons with disabilities, women & technical (Degree/Diploma) entrepreneur: 30% of investment made in Plant & Machinery with a maximum limit INR 2.50 crores only. New and existing enterprises undertaking E/M/D shall be granted additional CIS @5% of capital investment made in Plant & Machinery, subject to an upper limit of INR 20 lakhs over and above the limits as specified above at (a) and (b) for the following enterprises: o Set up in Industrially Backward Districts. o Set up in designated IDCO Industrial Estates or Industrial Areas along Biju Express Highway Corridor. o Enterprise of Automobile & Auto Components, Plastics & Polymers, Steel & Stainless Steel, Defence Equipment, Aluminium, Pharmaceuticals, Medical Equipment and Apparel & Textile sector. New and existing enterprises undertaking E/M/D will be granted additional CIS @5% of capital investment made in technical civil works and Plant & Machinery for non-polluting measures, subject to an upper limit of INR 25 lakhs over and above the limits as specified above in sl. no. (a) and (b) for investment in non-polluting measures such as: o Waste water treatment o Waste recycling o Green Energy Equipment manufacturing o Green Buildings o Use of rooftop renewable source of power o Installing Continuous Emission Monitoring System (CEMS) for red category industries o Effluent Treatment Plants o Adopting rain water harvesting/ rainwater recharging practices o Any other environment management practices/projects approved by the MSME Department New and existing Anchor enterprises undertaking E/M/D shall be eligible for CIS @30% of investment made in Plant & Machinery subject to a maximum limit of INR 4 Crores. New enterprises with investment in Plant & Machinery up to INR 50 crores engaged in manufacturing of E-Vehicle components and charging infrastructure shall be eligible for CIS @ 30% of the investment made in Plant & Machinery subject to a maximum limit of INR 3 Crores. Note: Investment in Plant & Machinery till the date of Commencement of Production. For the enterprises set up by SC, ST, persons with disabilities, Women, Technical Degree or Diploma holders, their stake in shareholding shall be 51% or more individually or jointly on the date of commencement of production.
State Goods and Services Tax (SGST) reimbursement	New and existing enterprises undertaking Expansion/ Modernization/ Diversification (E/M/D) with investment in Plant & Machinery up to INR 50 crores shall be eligible for reimbursement of 75% of net SGST paid in cash for a period of 3 years from the date of commencement of production limited to 100% of cost of Plant & Machinery New pioneer enterprises with investment in Plant & Machinery up to INR 50 crores shall be eligible for reimbursement of 100% of net SGST paid in cash for a period of 5 years from the date of commencement of production limited to 200% of cost of Plant & Machinery
Interest Subsidy	New enterprises with investment in plant and machinery up to INR 50 crores shall be eligible for reimbursement of 50% of interest paid on term loan availed from public financial institutions/banks for a period of 5 years from the date of commencement of production, subject to a total maximum limit of INR 1 crore
Subsidy for MSME Sustainable Certification Zero Defect Zero Effect (ZED)	New and existing MSMEs will be provided an additional subsidy of 80% on the balance cost i.e., over and above the financial support provided by the Government of India on the expenses incurred by the MSME for obtaining MSME sustainable ZED certification. In order to encourage the new and existing MSMEs, a one-time reimbursement will be provided to the applicant MSME, towards the expenses incurred on the acquisition of plant & machinery/testing equipment in the following manner: o @50% of expenses incurred on the acquisition of Plant & Machinery/testing equipment subject to an upper limit of INR 2.00 lakhs to achieve “ZED Bronze” from “No Rating” o @50% of expenses incurred on the acquisition of Plant & Machinery/testing equipment subject to an upper limit of INR 3.00 lakhs to achieve “ZED Silver” from “ZED Bronze or lower rating” o @50% of expenses incurred on the acquisition of Plant & Machinery/testing equipment subject to an upper limit of INR 5.00 lakhs to achieve “ZED Gold” from “ZED Silver or lower rating”
Employment Cost Subsidy	75% reimbursement (in case of male workers) and 100% reimbursement (in case of female workers) of employers’ contribution paid towards ESI and EPF for a period of 5 years for new and existing units undertaking E/M/D, with investment in Plant & Machinery up to INR 10 crores, which employ unskilled, semi-skilled, skilled and highly skilled workers who are domicile of the State and are on the payroll of the unit. 75% reimbursement (in case of male workers) and 100% reimbursement (in case of female workers) of employers’ contribution paid towards ESI and EPF for a period of 3 years for new and existing units undertaking E/M/D, with investment in Plant & Machinery of more than INR 10 crores and up to INR 50 crores, which employ unskilled, semi-skilled, skilled and highly skilled workers who are domicile of the State and are on the payroll of the unit.
Quality Certification	New and existing enterprises undertaking Expansion/ Modernization/ Diversification (E/M/D) with investment in Plant & Machinery up to INR 50 crores will be provided with assistance for obtaining quality certifications from nationally and internationally recognized institutions and its renewal for next consecutive 2 years, i.e., for a total period of 3 years @100% of the quality certification charges up to a total maximum limit of 5 lakhs.
Technology Purchase Subsidy	The State Government shall reimburse 50% of the amount spent on the purchase of technology from the National Research Development Corporation (NRDC) or other Government research centres, up to a maximum limit of INR 20 Lakh. Special focus will be on technologies that could help the units become cleaner and/ or energy-efficient and/or IT-enabled.
Assistance for raising Capital through SME Exchange	New Enterprises with investment in Plant & Machinery above INR 1 crore and up to INR 50 crores shall be entitled for a one-time grant of 20% of expenditure incurred for raising of capital through SME Exchange subject to a maximum of INR 10 lakh after the successful raising of equity as per the scheme approved by SME Exchange.
Reimbursement of Audit Cost for Water Conservation	To encourage water conservation, a one-time reimbursement of 75% of water audit cost by approved agencies limiting to INR 1 lakh shall be provided to new enterprises, with investment in Plant & Machinery up to INR 50 crores, undertaking water conservation measures.
Reimbursement of Audit Cost for Energy Conservation	To encourage energy conservation, a one-time reimbursement of 75% of energy audit cost by approved agencies limited to INR 5 lakhs shall be provided to new enterprises, with investment in Plant & Machinery up to INR 50 crores, undertaking energy conservation measures
Trademark Assistance	New and existing enterprises undertaking E/M/D, with investment in Plant & Machinery upto INR 50 crores, shall be entitled for reimbursement of 100% of expenditure incurred in obtaining Trade Mark subject to a maximum limit of INR 3 lakhs.
Award to MSMEs	In order to encourage competitiveness and efficiency amongst enterprises with investment in Plant & Machinery upto INR 50 crores, annual State Awards shall be given to MSMEs in recognition of their contribution in terms of: Product/Process Innovation Sustainability and adoption of environment-friendly technology Employment Generation Export Women entrepreneurship Registration of Patent and Trademark Excellence in growth, profitability, liquidity, and turnover Quantum of first, second and third prizes will be of INR 1,51,000, INR 1,00,000 and INR 51,000 respectively.