MSMEs Subsidy : Gujarat Industrial Policy – 2020
Gujarat growth is the most remarkable industrialized growth state in India. It has been recognized world-wide for offering a business ecosystem. Gujarat Industrial Policy 2020 has a vision to give additional push to “Atmanirbhar Bharat” by focusing on key sectors, strengthening integrated value chains, innovation and research and many other considerations and “It will be The Business Card of India”. It supports MSMEs , Large and Mega large Industries by formalities to ease the setup & Operate and finance incentive.
Subsidy by Gujarat State Government is at par with Promoters expectation… Do you agree with me?
Policy covers all business initiated after 7th August, 2020 to 6th August, 2025 and Business is eligible in msme eligibility criteria, Any eligible industry has to apply for an Udyam Registration Certificate.
Once you are eligible under MSME, Then you have the opportunity to avail subsidy as apply to your industry.
Gujarat Industrial Policy 2020 is indeed a game changer by offering land on lease, de-linking of incentives from tax structure and replacing it with capital subsidy without any upper ceiling. It’s bold decision will ensure to establish Gujarat on the world map as the best business destination, Business Card of India.
Reforms in Formalities by Statue:
Gujarat Micro, Small and Medium Enterprises (Facilitation of Establishment and Operation) Act, 2019
By Act facilitating doing business for the MSME in Gujarat can now start operation upon receipt of an acknowledgement certificate from the state nodal agency by submitting the ‘Declaration of Intent’.
MSME sector is now exempted from taking various approvals for the first three years.
Micro,Small and Medium Enterprises (MSMEs)
MSMEs play a role in creating employment opportunities by being labour intensive. They also form an integral part of the value chain of the larger industrial ecosystem. As part of this policy, a focused scheme has been developed to further strengthen the MSME ecosystem in the state.
The new definition for MSMEs as introduced by the Government of India will encourage MSMEs to expand their operations and increase investment, turnover and exports.
Financial Assistance: Manufacturing Sector MSMEs
Incentives to all Manufacturing MSMEs will be provided in terms of Capital and Interest Subsidy on term loans based on the category of talukas and Activity carried by MSME. Manufacturing enterprise can avail all many other assistance as mentioned under.
Financial Assistance: Service Sector MSMEs
Service sector is a major contributor to the national GDP. The service sector is a critical lever for enhancing productivity, ease of living and livelihood. With the establishment of several SEZs, IT parks and most importantly, GIFT City, a conductive ecosystem exists for the service sector industries to expand operations in the state. Hence, it is decided by Policy to extend incentives to Specified Service sector covered in MSME by Interest Subsidy Rate as per Subsidy Matrix.
Service sector for incentives:
- Financial services
- Health services
- Transport and logistics services
- Audio Visual services
- Construction related engineering services
- Environmental services
- Logistics Facilities Such As Container Freight Station Operators /Warehouses / Cold Storages Etc.
- Material Testing Centre
- Start Ups & Incubation Centers
- Hallmark Certification Centers
- Technical Testing And Analysis Servicing
- Maintenance And Repair Of Machineries & Equipments
- Repair Of Computers / Communication & Electronics Equipments / Household Goods
- Maintenance And Repair Of Utility Projects
- Packaging Services
- Industrial Rouse / Disposal Services
- Apparel /Cutting & Stitching Job Work (Other Than Retail Tailoring)
- Printing. Scanning, Digitalization & Lamination
- Weigh Bridges
- Colour Labs
- Steam & Air Conditioning Supply
- Waste Collection, Treatment And Disposal Activities
- Electrical, Plumbing & Other Installation Activities
- Maintenance & Repair Of Motor Vehicles
- Motion Pictures, Video & Television Production, Sound Recording Music Publishing Activities
- Activities Of Internet Access By The Operator Of The Wireless / Satellite Infrastructure
- Web Hosting Activities
- Specialized Design Activities Fashion Design Related To Textile/ Apparel / Jewellery/ Furniture/ Fashion Goods/ Graphic Design Etc.
Policy will also provide assistance in setting up of laboratories established by Industries Association with the help of Government up to 60% of the project cost of machinery and equipment cost.
Besides this, in order to promote contract research, the government will provide assistance for Contract/Sponsored research work from any industrial enterprise/Industrial association to recognized R&D institution / technical colleges approved by AICTE, at 50% of project cost, excluding cost of land and building, subject to maximum INR 50 Lakhs.
Rooftop Solar Power Interest Subsidy to MSMEs
Manufacturing sectors electricity cost is one of the factors to compete production cost with global standard. By Policy promote solar rooftop in industry first time in state and it will be reduce direct production cost. And it will give push to compete local and global.
MSME is eligible to set-up rooftop solar power. Interest Subsidy from 5% – 9% will be provided on term loan as per rates Subsidy matrix and Interest cost to MSME by 2% only*.
Subsidy Matrix :
The following initiatives are being taken by the state government to reposition Gujarat’s MSMEs on a global level & enhance competitiveness:
| Particulars : Activity | Capital Subsidy | Interest Subsidy |
| Manufacturing Enterprise | ELIGIBLE | ELIGIBLE |
| Service Enterprise | NA | ELIGIBLE |
| Manufacturing Enterprise -Solar RoofTop | NA | ELIGIBLE |
| Taluka Category | Capital Subsidy | Interest Subsidy |
| Category 1 | @25 % of eligible Term Loan Amount subject to Subsidy upto Rs. 35 lakhs;
For Medium Enterprise Subsidy upto 45 Lacs |
@7% of term loan amount disbursed with the maximum amount of Rs. 35 lakhs per annum for 7 years |
| Category 2 | @20 % of eligible Term Loan Amount subject to Subsidy upto Rs. 30 lakhs;
For Medium Enterprise Subsidy upto Rs. 37.5 lakhs |
@6% of term loan amount disbursed with the maximum amount of Rs. 30 lakhs per annum for 6 years |
| Category 3 (including Municipal Corporation areas) | @10 % of eligible Term Loan Amount subject to Subsidy upto Rs.10 lakhs;
For Medium Enterprise Subsidy upto Rs. 15 lakhs |
@5% of term loan amount disbursed with the maximum amount of Rs. 25 lakhs per annum for 5 years |
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Policy guide to provide other Incentives to MSMEs by :
- Quality Certification
- Information & communication Technology adoption
- Technology Upgradation & Acquisition Support
- Patent Support
- Market Development Assistance
- Energy & Water Conservation
Quality Certification: With a vision to encourage domestic products, the policy will promote quality certifications under Zero Defect Zero Effect (ZED scheme) and also support to obtain ISI/WHO-GMP/Hallmark certifications & other national/International certification from Quality Council of India.
Financial Assistance,
- upto 50% of fee payable to International Certification Authority
- 50% cost of testing equipment and machinery required for that certification
Subsidy limit upto maximum amount of INR 10 lakhs.
For ZED certification, MSMEs can avail assistance upto
- 50% of certification cost maximum upto INR 50,000 after deducting the assistance received from Government of India.
Information & communication Technology adoption: Financial assistance for installation of Enterprise Resource Planning (ERP) System MSMEs can avail an assistance of upto 65% of capital cost upto INR 1 lakh & Adoption of other ICT platforms & facilities MSMEs can obtain assistance upto 65% of capital cost upto INR 5 lakhs.
Technology Upgradation & Acquisition Support: the manufacturing sector needs to adopt latest technologies and the state will provide fiscal support to acquiring technologies from recognized institutions as well as in acquisition of patented technologies from foreign companies.
MSMEs will get assistance
- upto 65% of the cost payable to the institution
- upto INR 50 lakhs for acquisition of technology.
Patent Support: Financial support by reimbursement of cost for filing of domestic patents and international patents,
- Upto 75% of the cost/expenditure incurred subject to a max of INR 25 lakhs.
And it includes fees reimbursed for attorneys for national and international patent is INR 50,000 & INR 2,00,000/- respectively.
Market Development Assistance: For Support to Gujarat based companies at a global level, the policy will support domestic MSMEs & startups for participation in national and international level exhibitions organized in India and abroad.
| Category | Incentives |
| Participation in exhibition within India |
Can be applied directly by the individual exhibitor/association
|
| Participation in exhibition outside India |
International Level exhibition Outside India
This can be claimed 3 times by an individual unit/ association during the policy period |
| Organizing exhibition within Gujarat | 60% of Bill electricity consumption |
Energy & Water Conservation:
The assistance will be provided for conducting audits for energy and water conservation as well as for purchase of equipment.
- Financial assistance upto 75% cost of energy / water audit conducted by a recognized institution / consultant subject to maximum INR 50,000
- Financial assistance 25% of cost of equipment recommended by the auditing authority subject to maximum INR 20 lakhs.
Policy will provide assistance for service line and power connection charges, rent etc. at 35% of charges paid to distribution licences for LT/HT service line, maximum limit up to INR 5 lakhs.
The State Government shall provide additional incentives under new industrial policy for Women entrepreneurs, SC/ST entrepreneurs, physically challenged entrepreneurs and startups.
- For environment management projects with use of clean, Efficient and Innovative Pollution Control Equipment the policy will provide assistance at 25% of cost of Plant & Machinery to MSMEs with maximum support upto INR 35 lakhs.
- Implementation of cleaner production technology in place of existing processes such as substitution & optimization of raw material, reduction in water consumption or energy consumption or waste generation, at 35% of cost of Plant & Machinery to MSMEs with maximum support upto INR 35 lakhs.
Gujarat Industrial Policy 2020 is indeed a game changer by offering land on lease, de-linking of incentives from tax structure and replacing it with capital subsidy without any upper ceiling. It’s bold decision will ensure to establish Gujarat on the world map as the best business destination, Business Card of India.
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