Who will benefit from MSME policy of Gujarat government?

- Antenna : Vivek Mehta

The Gujarat government announced the new MSME policy on October 5. However, the biggest issue is the withdrawal of capital subsidy for those who invest more than 1 crore and up to 50 crore. As of today, Rs. Even a small industry cannot be set up in 1 crore. In this situation Rs. Announced to give benefits to industries up to 1 crore, so that benefit will only reach the cottage industries.' Employment Link Incentive Scheme has been provided in the new industrial policy. It will also create a new manufacturing sector in Gujarat. The major drawback of the Dhanvi scheme is that the capital subsidy will now be available only to the industries falling under the category of micro. Small category is excluded from subsidy. In fact, the number of industries falling under the category of small in the country is also very large which will not get the benefit of subsidy from now on.'

Small units will not get much benefit from the new MSME policy. On the other hand, even big companies cannot benefit from it. Thrust sector companies are likely to benefit from it. The benefit of Employee Provident Fund will not be available to very small units.' It is also planned to provide interest subsidy to micro, small and medium industries. Term loan to industrial units falling in category one taluka i.e. 7 percent interest of term loan maximum Rs. It has been decided to give within the limit of 35 lakhs. It has been announced to give annual interest subsidy at the rate of 7 percent on term loans in taluks falling in category 1, i.e. in taluks located in rural areas. This benefit will be given for a maximum period of seven years. Units in category-II talukas will get interest subsidy of 6 percent of Termloan with an annual maximum of Rs. It has been decided to give within the limit of 30 lakhs.

Similarly, units falling in category three can get a term loan at the rate of 5% per annum with a maximum of Rs. Interest subsidy will be given within the limit of 25 lakhs. Yes, along with this it has been decided to provide one percent more interest subsidy to women entrepreneurs as compared to male entrepreneurs. Also, one percent more interest relief will be given to the disabled. This benefit will also be given to the start ups of the manufacturing sector. It has been decided to provide one percent additional interest subsidy on term loan to small entrepreneurs from the age of 35 years. It seems that there is a plan to limit this benefit by placing a condition that the beneficiaries of the interest relief on mandatory term loans will have to pay two percent of the total interest rate charged by the bank or financial institute. This seems to be a technique of giving with one hand and taking with the other.'

In the new MSME policy, it has been decided to provide 100 percent net state GST-Goods and Services Tax relief for up to 7.5 percent of the amount of eligible fixed capital investment for 10 years. Similarly, it has also been decided to provide 90% and 80% SGST relief of state GST to the units operating in talukas falling under category-two and three, respectively 6.5% and 5% of the eligible fixed capital investment.

This benefit is planned for ten years from the date each industrial unit starts commercial production. The benefits of GST have been announced in the new industry policy. Gujarat is a manufacturing hub. Most of the products produced in Gujarat are sold within the state itself. is exported. Its sales in Gujarat remain around 5 percent of the total production. The rest is exported. In this situation, the benefit of GST subsidy will be limited.

Therefore, the provision of giving GST benefits only to local sellers will also limit their benefits. So the announcement of SGST refunds will not prove to be of much benefit. There is little expectation of improvement in the performance of Gujarat's manufacturers in terms of selling locally.