Gujarat industrial policy 2009

Gujarat Industrial Policy 2009, Incentive Schemes

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Presentation by

H. D. ShrimaliAdditional Industries Commissioner Extn.)

Industries CommissionerateGovernment of Gujarat

Udyog BhavanGandhinagar

28th August 2010

Gujarat-Industry Profile

Gross State Domestic Product (2007-08) at constant 1999-00 prices

Rs. 2,13,674 Crore

Manufacturing Sector Rs. 64,052 Cr.

Share in GSDP 30 %

Micro, Small and Medium Enterprises Over 3,33,000

Large Industries Over 800

ASI 2006-07 Results

•Factories 14,327 (10% share in India)

•Employment 9.83 lakhs(9.5% share in India)

•Fixed Capital Investment Rs. 1,31,624 cr. (18.4% share in India )

•Industrial Production Rs. 3,71,685 cr. (15.4% share in India )

•Value Addition Rs. 47,085 cr. (11.9% share in India)

Exports(2006-07) 19.2% share in India

Average Annual Growth Rate (2002-2007) 12.6%

Gujarat : Industry Sectors

Sector Production

(In Rs. Cr.)

% Share in Gujarat

% Share in India

Refined Petroleum Products 109132 29.4 29.1

Chemicals & Pharma 75658 20.4 27.6

Engineering Industries 48327 13.0 8.2

Food & Beverages 30732 8.3 10.6

Metallurgical Industries 41720 11.2 11.9

Textiles & Apparel 22662 6.1 11.4

Mineral Based Industries 9050 2.4 12.2

Rubber & Plastic Prod. 5354 1.4 8.1

Paper & Paper Products 3619 1.0 13.1

All Industry 3,71,684 100 15.4

As per ASI-2006-07 data

Gujarat Industrial Policy 2009

Visionó Gujarat aspire to become a beacon of comprehensive social and economic development

Objectivesó Investments : SIRs, PPP approach for Infrastructure,

Mega Projects, Innovative projects, Port led development, Logistics

ó Employment Opportunity : MSME, Focus sectors, Human resources,Youth, Women and first gen. entrepreneurs.

ó Quality : Research and Development, Innovation, Quality of products, Environment

ó Investors Facilitation : Investor Portal, Monitoring of Projects

Schemesó Assistance to MSMEs ó Assistance to Textiles & Apparelsó Assistance to Gems & Jewellery Sectoró Improving Industrial Infrastructure ó Enhancement of Technical competence and Manpoweró Assistance for Environment Protection Measures and Infrastructureó Assistance for Environment Protection Measures-MSME unitsó Assistance to Mega /Innovative Projectsó Scheme for relief to the Sick Industrial Units 4

§ Interest Subsidy

ü All MSMEs are eligible for setting of new unit and existing unit for expansion, diversification or modernisation.

ü Graded interest subsidy, @7% for micro enterprises and @ 5% for Small & Medium enterprises.

ü 1% additional interest subsidy to youth having less than 35 years of age in case of first project. Woman entrepreneurs accorded priority.

ü Maximum amount Rs. 25 lakhs per annum, for five years period.

§ Venture capital

ü Venture capital assistance through Banks/FIs for projects adopting innovative technology such as Technical textile, Nanotechnology, Information Technology, Bio-Technology etc..

ü Funds to be provided to Banks/FIs up to Max Rs. 10 cr. during the operative period of the scheme.

§ Quality Certificationü Assistance for maximum 3 quality certifications @ 50% of expenditure subject to overall ceiling of Rs. 6

lakhs in five years

ü Expenditure includes fees charged by certification agencies, cost of testing equipments, calibration charges, consulting fees and training charges.

§ Skill Enhancement ü Reimbursement @50% of fees, subject to maximum of Rs. 5000/ per person for a min. one week training

for skill upgradation conducted by institutions suggested by Anchor Institute or specialised institutions in a specific sector for a minimum batch size of 25 trainees..

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Assistance to Micro Small and Medium Enterprises


§ Technology Acquisition Fundü Assistance for technology acquisition in any form for group of at least 10 MSMEs, by way of 50%

grant, subject to max. Rs. 1 Cr/ technology including royalty payments for first 2 yrs

§ Support to R&D Institutionsü Assistance to R&D institutions for testing facilities, incubation centre as well as setting up of new

R&D Centre, upto 60% of the project cost excluding land and building cost.ü Assistance for Contract/ Sponsored research work from Industrial units/Industry Association

through recognised R&D institutions / AICTE approved technical colleges, @50% of project cost with a ceiling of Rs. 50 lakh.

§ Patent Assistanceü Assistance @ 50%. subject to max. Rs. 10 lakhs towards necessary expenditure for obtaining

domestic patents and Rs. 25 lakhs for obtaining international patents subject to maximum 5 patents per unit over a period of 5 years

§ Energy and water conservationü Reimbursement @ 50% of cost of energy/ water audit with a max. of Rs. 25,000/- unit ü In addition, assistance of 20% of cost of equipments subject to max. Rs. 10 lakh in a project .

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§ Market Development Support

ü Assistance to MSME for packaging design from recognised institutions, @ 50%; of the cost, subject to

maximum Rs. 2 lakh once in a period of five years.

ü Assistance to MSME for participation in International Trade Fair outside India @ 50% of cost of rent,

literature & display material subject to maximum Rs. 2 lakhs.

ü Assistance to Industries Associations (min. 5 units) for participation in international trade fairs as

Gujarat Pavilion outside India @ 50% of total rent subject to max Rs.10 lakh

ü Viability Gap Support to industry associations for organizing national seminars/ exhibition in Gujarat

(max. Rs. 4 Lacs) and int. seminars/ exhibitions in Gujarat (max. Rs 8 Lacs)

ü Assistance to industry associations for setting up Convention/ Trade centre @ 50% of project cost

excluding land, max Rs. 5 Cr. once in a period of five years.

§ Support for Ancillary/ Vendor Development

ü Support to Vendor development on PPP model wherein Parent unit to contribute min. 5% for prototype/ new product development besides technical support and commitment for procurement guarantee for 3 yrs.

ü Vendor unit will be eligible for interest subsidy as per scheme. 7


§ Support for Ancillary/ Vendor Development

ü Assistance @ 20% of infrastructure cost excluding land cost, max Rs. 1 Cr. to parent unit for development of industrial park

ü New or existing Medium/large unit as Parent unit to support min. 10 vendor units for a new product/prototype development.

§ Support to Auxiliary industries for value addition

ü Large units producing raw materials and promoting auxiliary MSME units to be encouraged to develop industrial park for accommodating min. 20 units.

ü Assistance @ 20% of infrastructure cost excluding land cost subject to max. Rs. 1 Cr.

§ Cluster Development

ü Anchor units, nodal institutions and/ or industry associations to take up the cluster program in PPP

mode.

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§ Cluster Development

ü Comprehensive support to strengthen cluster units in a programme covering product design,

technology upgradation, quality improvement, energy and water conservation, common branding

and marketing facilities, hiring of an expert/ cluster development agent, setting up of demonstration

plants, common facilities, Incubation centre, ITI extension centre and other need based facilities

ü Assistance @ 80% (including assistance from Government of India) of proposed cost of programme

with a ceiling of Rs. 10 Cr/ cluster in a period of 3 - 5 years

ü Assistance to nodal institutions/ hiring of experts will not exceed 3% of project cost

ü A Cluster Advisory Institution (CAI) to be constituted

ü Cluster to be eligible for partial financial assistance, available under critical infrastructure scheme.

ü Nodal institution to prepare a five year comprehensive development plan of the cluster.

§ Rehabilitation of Sick Units

ü 50% subsidy on cost of diagnostic study by Technical institution initiated through FI/ Bank/

Government- maximum Rs. 1 lakh.

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§ Rehabilitation of Sick Units

ü Registered Experts in the field of technology, marketing and finance to advise sick units.50% fees

(max. Rs. 1 Lakh/unit) to be reimbursed on implementing suggestions.

ü Interest subsidy @5% p.a. limited to Rs. 10 Lakh per year for 3 yrs on additional finance for

rehabilitation disbursed by bank/FI.

ü OTS for clearing dues of GoG Dept./ Corp./ Boards on a graded scale, for which a separate GR to be

introduced

ü Other unit taking over a sick unit for rehabilitation to be eligible for assistance as above

§ Awards to best MSMEs

ü Separate awards to Micro, Small and Medium category

ü Three awards in each categoryü Growth in production and profitü Quality and Environment improvement measuresü Innovation in technology for new product or process development

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§ Awards to best MSMEs

ü Award in the form of Rs. 1 lakh cash and appreciation letterü Awardees are to be given priority in participation in International Seminars and incentives under

the scheme ü Independent Credit Rating agency to be appointed to select the best performing MSMEs in the

above categoriesü Nominations to be encouraged from Industries Associations

§ Promotion of Specific Sector

ü Specific sector identified in a district shall be supported with integrated programme of interest

subsidy, technology upgradation and quality certification

§ Eligibility for Quantum of Assistance

ü All eligible MSME can avail incentives under different categories separately or in combination.

Assistance will be given only once under each category in five years period unless otherwise

specified in specific category of incentive.

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Assistance to Textiles and apparels

§ Interest Subsidyü Credit linked Interest Subsidy to units in Spinning, Weaving, Knitting, Apparel and Machine

Carpeting, satisfying certain conditions, both for new project as well as expansion, and diversification in existing units for investment in new and modern plant and machinery.

ü Interest subsidy @5% per annum, limited Rs. 30 lakhs per annum for 5 years period on term loan from FI/Bank (for Spinning, maximum amount of Rs.40 lakhs).

ü Assistance is in addition to Incentive available under GOI Scheme.

§ Technical Textilesü Credit linked interest subsidy @6% per annum limited to Rs.125 lakhs during operative period of the

scheme, to new or existing units on equipment/ machineries identified under TUF scheme for production of identified range of technical textiles.

§ Technology Acquisitionü Assistance for technology acquisition / technical collaboration, @ 50% max. Rs 25 lakhs per process/

product once during operative period of the scheme.

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§ Apparel Training Institutions and Traineesü Assistance for setting up new Apparel Training Centre, @ 85%, of the project investment with a

ceiling of Rs.3 crores .ü Assistance to ITIs to upgrade existing facilities for conducting training in apparel production.ü Assistance to Training Centres registered with Directorate of Employment & Training (DET), for

setting up facilities in apparel training, @ 50% with a limit of Rs.20 lacs.ü Reimbursement of tuition fees @ 50% subject to a limit of Rs.5,000 per trainee per course.ü Reimbursement of training fees to trainers, @100% of fees for training in autonomous institutes

and @50% of fees in other institutes, maximum Rs.5000/- per trainer per week for maximum four weeks.

§ Training in Powerloom Sectorü Stipend @ Rs.1500/- per month per trainee for a period of 3 months for weavers and jobbers for

training conducted by Powerloom Training Centres.ü Stipend @Rs.200 per day for two days to weavers and Rs.300 per day for 6 days to jobbers for a

training on upgradation of skills for weavers, jobbers and powerloom owners to work on auto looms, high speed auto looms and shuttleless looms.

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§ Textile & Apparel Park

ü Support to private developer for setting up Apparel / Sewing Park, Weaving Park, Technical Textile Park, Industrial Park for machine made carpets, industrial park for textile machineries and ancillaries and Ginning and Pressing park.

ü The park must have minimum 20 manufacturing / service enterprises.

ü Assistance will be under Viability Gap Funding scheme by Gujarat Infrastructure Development Board.

ü State Government may also provide land to SPVs on lease.

ü Assistance will be @50%, maximum Rs.10 crores in a total project cost for establishing common infrastructure facilities excluding land cost, for setting up textile industrial park developed by Industries Associations/ Group of Industries as SPV in PPP mode.

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Assistance to Gems & Jewellery Sector

§ Interest Subsidyü Interest subsidy @ 3% per annum, maximum Rs.15 lakhs per annum, for 5 years on term loan from

Bank/FI for setting up new project or expansion, diversification and modernisation in existing project on fixed capital investment.

ü The unit may avail assistance from other schemes of GOG and GOI

§ Hall Mark Certification and Gems Testing Centre.ü Assistance by way of interest subsidy @3% per annum limited to Rs.15 lakhs for 5 years period to set

up new Hall Mark Certification Centre/ Gems Testing Centre as an independent legal entity.ü Plant and machinery must be as approved by Bureau of Indian Standards in case of Hall Mark

Certification and as per approval of NABL, BIS, Gemological Institute of America in case of Gems Testing Centre.

§ Assistance for Health & Safety Measuresü Financial assistance to entrepreneurs @ 50% of cost of safety measures/ equipments, limited to

maximum Rs.500/-per worker once during 5 years period.

§ Training Institutesü Need based support for setting up National / International level Gems & Jewellery Institutions for

taking up R&D activities, design support and training to workers.15

Assistance to Gems & Jewellery Sector

§ Jewellery Park

ü Support to provide development for setting jewellery park in PPP mode.

ü The Park must have minimum 50 manufacturing / service enterprises.

ü Support as Viability Gap Funding upto 20% of the project cost under GIDB Scheme.

ü Government may provide land to such parks.

ü Assistance to Industries Association / Group of Industries for developing Jewellery Park under SPV, @ 50% of the project cost in establishing Common Infrastructure Facilities including land cost, with a ceiling of Rs.10 crores.

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Improving Industrial Infrastructure

§ Assistance to Critical infrastructure Projectsü Assistance to be considered for ü Upgrading infrastructure facilities as may be required in an industrial estate / clusters/industrial

area. ü Additional infrastructure facilities.ü Upgradation of infrastructure facilities in GIDC estates and ü Undertaking specific studies.

ü Industries Associations, Large Industry, Govt. Dept./agency, to be eligible.ü Assistance will be @60% of the project cost with a ceiling of Rs.10 crores in case of Industrial area /

Park having less than 100 hect. and Rs.20 crores for area more than 100 hect.ü The promoter is to contribute 20% of equity in the project.ü Last mile connectivity project to the industrial park / area having more than 25 hect. to be

considered.

§ Financial Assistance to Industrial Parkü Assistance to Industries Associations / Industrial houses or Institutions for setting up industrial

park in PPP mode.ü Industrial park must have basic infrastructure facilities to be classified into C, B & A categories

depending upon the minimum infrastructure facilities.ü Assistance will be in the form of Viability Gap Funding upto 20% of the cost through GIDB.ü Additional Assistance upto 20% may be provided by the Central Government.

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Enhancement of Technical Competence and Man Power§ State Level Anchor Instituteü Assistance to State Level Anchor Institutes in the selected focus sectors towards expenditure on

equipment, internal refurnishing of premises and contingency.

ü Additional financial support towards operating expenses to Anchor and Nodal Institutes.

ü Anchor Institute to actively involve industries and provide technical support to the technical educational institutions for shop floor workers, supervisory and managerial level training.

ü The total financial assistance under both capital and expenses will not exceed Rs.10 crores in each sector in the operative period of the scheme.

§ Short Term Bridge Coursesü Industry Partner could run the courses from existing courses with addition of certain subjects.

Alternatively new course can be started as per the specific requirements by industry in existing ITI/Polytechnic/ Engineering Colleges.

ü Assistance @ 75% cost of machinery and equipment upto Rs.100 lakhs contributed jointly by DTE/DET/IC.

ü Industry partner/industries Association / institutes to contribute rest of the amount and provide infrastructure facilities in the form of land and building.

ü Institutional Management Committee (IMC) to monitor and run the course.

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Assistance for Technical Competence and Man Power § Extension Training Centres

ü Financial assistance for setting up extension centre of ITI/ Polytechnic/ Engineering colleges in GIDC estates / industrial clusters / SEZs/ Industrial Parks to run specific courses @, ü 100% in case of GIDC, ü 75% in industrial cluster and ü 50% in industrial Parks/ SEZs ü with a ceiling of Rs.1 crores for each Extension Centre towards cost of Machinery and equipments.

ü GIDC/ Industrial Cluster / SEZs/ Industrial Park to provide land and building for the purpose.

§ Specialised Skill Development Centre

ü Assistance to Institutes / Universities / Industries / Industries Associations for setting up specialised training Centre in the areas of marine engineering, mining, specialised pipe laying, logistic and services etc. and other advanced technology and management courses to the extent of 50% of the project cost covering building, equipment and machinery excluding land cost with a ceiling of Rs.2 crores.

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Assistance for Environment Protection Measures –MSME Units

§ Scheme 1 Assistance Environment Management to MSMEsüAssistance is offered for innovative /State of the art technology for

following activities:

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Sr. No.

Activity Quantum of Assistance

A Substitution & Optimization of raw material including catalysts

up to 25% of cost of plant & machinery , ceiling of Rs. 10 lakh per project

B Rainwater harvesting up to 50% of cost of fixed capital investment ceiling of Rs. 5 lakhs per project

C Any Other pre-identified environment management proj.


D Implementation of cleaner production and clean technology measures etc.


Assistance for Environment Protection Measures –MSME Units

§ Scheme 2 Assistance for encouraging green practices and Environmental Audit to MSMEsü Assistance is offered for encouraging “Green “ practises and environmental audit to MSMEs

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Sr. No.

Activity Quantum of Assistance

A Use of Clean, efficient and Innovative Pollution Control Equipments in industries

up to 25% of cost of equipments , ceiling of Rs. 2.5 lakh per units

B Periodic Environmental Audits except those covered under Rules and Judgments

up to 50% of fees of audit services or maximum Rs. 25, 000/unit

C Encouraging Environment Management System-setting up of Environment Management Cell

up to 25% of cost of equipments , or maximum Rs. 5 lakh/plant once in a lifetime

D Purchase of new equipments/systems related to safety, occupational health for a cluster of industries (minimum 10 industries in a cluster)

Assistance to industrial association or SPV of Industrial units up to 25% of cost of equipments or maximum Rs. 25 lakh per cluster.

E Installation of Solar system leading to atleast 5% energy saving

Up to 25 % of the cost of system, rs. 2.5 lakh per plant

THANK YOU

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Economy & Finance

Gujarat industrial policy 2009