The Odisha MSME Development Policy - 2016

Odisha · state statute

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Odisha MSME Development
Policy – 2016
Micro, Small & Medium Enterprises Department
Government of Odisha

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Table of Contents

Sl.

Subject

Page

Introduction

1
–

Objectives

Strategy

2
-
3

Enabling Framework

–

4.1

Ease of Doing Business

–

4.2

Capacity Building & Skill Development

4.3

Cluster Development

4.4

Credit F
low to MSME

–

Supporting Framework

–

5.1

Infrastructure Development

5.2

Support for Ancillary & Downstream Enterprises

–

5.3

Marketing Assistance in MSME Promotion

5.4

Export Promotion

5.5.

Raw Material
Support

5.6

Techn
ology Up
-
gradation

Financial Support Framework

–

6.1

Capital Investment Subsidy

–

6.2

Seed Capital

Assistance

6.3

Project Report Subsidy

6.4

Reimbursement of Audit Cost for Water Conservation

6.5.

Assistance for raising Capit
al through SME Exchange

6.6

Trade Mark Assistance

6.7

Reimbursement of Training Expenditure

6.8

Award to MSM

Enterprises /

Entrepreneur
s

Revival of Sick MSMEs

–

1
0

Governance

General Provisions

–

1
1

Appendices

12
–

Annexure I

Definitions

1
2

Annexure II

List of Ineligible Enterprises
.

1
3

–

1
4

Annexure III

Highlights of Industrial Policy Resolution 2015

1
5

–

1
7

Annexure
I
V

List of Potential Clusters in Odisha

Introduction

1.1

Odisha
is located

strateg
ically contiguous
to

states of southern, central and
eastern part
s

of India
. It

has a
rich heritage,

a vibrant present and a
huge

potential for Micro, Small and Medium E
nterprises
. State is also a treasure
trove
o
f natural resources
.

A
ccess to global marke
ts, presence of qualified
human resource, robust infrastructure
, stable polity

and a positive business
environment make
the
Odisha a favoured destination for investors.

1.2

Industrialisation is sine qua non of economic progress
.

P
erceptible economic
progress

has been achieved
because of
average annual growth of

5.02%
in

manufacturing and service sectors

to the Gross State Domestic Production
(GSDP)
between

20
11
-
12

and

2015
-
16
.

Odisha’s GSDP

has

increased
at a
Compound Annual Growth Rate (CAGR) of 10.2
3
% from
R
s.
2
81450

crore

to
Rs
.
330200

crore during this

period.

1.3

Cumulative FDI inflows in Odisha during April 20
10

to March 2016 stood at
Rs.
1027 crore
.

S
t
ate G
overnment
has
announced plans to facilitate growth in
the manufacturing sec
tor with

year
-
on
-
year

increas
e of 15% till 2020.

1.4

According to Ministry of Commerce and Industry, total exports from Odisha in
2015
-
16 were valued at
Rs.
1
9
,
7
46

crore
. Value of exports from the state
increased at a CAGR of 2.5% between 2006
-
07 and 2014
-
15.

1.5

Odisha is well connected by

surface

transport, air and water.

The State has
extensive
rail an
d road network linking
various
growth centres.

As
a measure

to
encourage

foreign airlines

to start service from Odisha,

the

S
tate

Government
has
announced zero
Value Added Tax
on
aviation t
urbine fuel
.

1.6

Odisha is a power surplus State with
an
installed
capacity of 5,
531.58

MW
with a positive supply~demand gap of 109 MW in 2014
-
15.

1.7

Odisha ranks high in the country in terms of total value of mineral output.
During 2015
-
16, total productio
n of minerals in the state was recorded at
239.45 million tonnes.
Mineral r
esources of Odisha
constitute
formidable
share in

national deposits of
Chromite
-
98%, Nickel
-
93%,

Graphite
-
71%,
Pyrophyllite
-
65%, Manganese
-
67%,
Bauxite
-
59%, China C
lay
-
31%, F
ir
e C
l
ay
-
25%, Dolomite
-
18%.
Odisha
is
the
fourth largest producer of Coal and
the
fifth largest producer of I
ron
-
ore in India.

1.8

Primarily, being an agrarian state
, Odisha is
endowed with huge
allied

resources like animal husbandry, fishery, forest produces, etc
. T
he vast coast
-
line of 480 km

p
rovides
ample
scope
for

marine
as well as

coir produc
e
.

1.9

Odisha is the home to some of the leading public sector enterprises like HAL,

RSP, IRE, MCL, NALCO, NTPC, NIN
L, PPT, IOCL, Ordinance Factory

and
private companies li
ke Tata Steel, Vedanta Aluminium, Aditya Birla, Jindal
Steel
,

etc. Existence of these large industries offers a huge opportunity for
establishment of A
ncillary

and D
ownstream MSME
s
.

1.10

The State has notified Industrial Policy Resolution, 2015
,

which
lays do
wn
policy framework and
fiscal incentives for

industries

including

MSMEs.
However,

MSME sector suffers
from

intrinsic
disadvantages

in availing priority
in infrastructure
, credit

linkages
, marketing and needs extra support
especially in
industrially backwa
rd

districts
. With
a view to provide a
conducive eco
-
system

for
promoti
ng

growth
of MSMEs in a focus
s
ed manner
,

commensurate with the present scenario and anticipated future, the State is
declaring “Odisha MSME Development Policy,

2016.”

1.11

Odisha MSME Devel
opment Policy, 2016 has been formulated through
a

consultative process involving stake
-
holders including Industr
y

Associations,
Financial Institutions, Experts and Government Departments concerned.

Objectives

The objectives of the policy are

to
:

Encourage new manufacturing capacity based on improved
competitiveness.

Provide a conducive eco
-
system
for promotion and growth of MSMEs in
potential sectors.

Provide opportunities t
o local entrepreneurial talent.

Maximize avenues
of employment gen
eration for the youth.

Facilitate MSMEs in

accessing

domestic

and

export market
s
.

Make concerted efforts for revival of sick
enterprises
.

Make focus
s
ed effort
s

for sustainable
,

inclusive

balanced

growth.

Strategy

3.1

To achieve
the objectives
of this P
olicy, the
following strateg
y

is proposed
:

Setting up of
Facilitation Cell
s

at
al
l Regional Industries Centres (
RICs) /
Dist
rict Industries Centres (DIC
s)

and strengthening
of
RICs / DICs
.

Development of MSME Parks in district
s

to provide ready infrastru
cture for
establishment of
MSMEs

and
to
promote balanced growth

across regions.

Development of product
-
specific clusters
namely
,

cashew, engineering,
rice

based products
, pharmaceutical, plastic

& polymer
,
readymade

garment
s
,
agro & food proce
ssing, stone
wares
,

etc
.

Convergence of schemes and resources of state with
and leveraging of
Go
vernment of
I
ndia

schemes and resources.

Suitable incentive packages for promotion and growth of MSMEs especially
in industrially backward

districts

including

KBK
districts.

Facilitate setting up of
A
ncillary &
D
ownstream
enterprises

of
the
existing
and upcoming Large Industries &

Public Sector Undertakings.

Enhance flow of credit to MSMEs by encouraging
banks /
financial
institution
s

through

dedicated

MSME

branches.

Establi
sh MSME

Institution linkages for creation of awareness, imparting
entrepreneurial education through empanelled Institutes

setting up of
L
ivelihood Business Incubator
s

(LBI
s
)

/ T
echnology
B
usiness Incubator
s
.

Strengthen

MSME

Academia
interface

for sk
ill development, product
/
process

development, R&D
and innovations
.

Thrust on
revival of sick
MSME
s i
ncludin
g prevention of sickness
.

Encourage product branding “Made in Odisha” for global recognition
.

Organize
road shows, awareness programme

and investor
s
’

meet
extensively inside the
country

and at strategic locations
overseas
.

3.2

The Policy takes cognizance of
'
E
ase of
Doing B
usiness
'

initiatives and the
relevant extant Policies of
both
the State
Government

&
Government

of India
and
aims

to make Odisha
-

a destination of choice for MSME
s
. Accordingly,
the P
olicy has been divided into

three parts, viz.

an Enabling Framework,
Supporting Framework and Incentive Framework
.

Enabling F
ramework

4.1.

Ease of Doing B
usiness

4.1.1

RICs

/
DICs shall be the nodal a
gency for
development of
MSME
s

in the state
.

They

shall assist and handhold investors in setting up business and
coordinating
requisite
approvals and clearances before, during and after
projec
t implementation.

4.1.2

A
ll relevant schemes /

assistance

enunciated
in
the
extant Policies of State
Government and Government

of In
dia shall be dovetailed at RIC
/

DIC
level
to
enable

investors
to take advantage
as per

their eligibility.

4.1.3

In order to accelerate
promotion & growth in MSME sector
, MSME
Department shall organ
ize Road

Shows

/ Investor
s
’

Meet
s

at
strategic
locations
inside the country

as well as overseas
. RIC
s

/ DIC
s

shall
similarly
organize

Awareness
Programmes

within

the
ir

districts.

4.1.4

Facilitation Cell
s

shall be set

up
at State Level /

RIC
s

DIC
s

manned by
professionals / technical experts
to support entrepreneurs / investors
.

4.1.5

An o
n

line mechanism for
administration

of
incentives in
a
time bound manner

will be implemented

to ensure timely sanction and release of incentive
s
.

4.1.6

An online platform shall be
set u
p

for
redressal of grievances of

MSM

entrepreneurs and
investors.

4.1.7

A Central Inspection

Co
-
ordination Group (CICG) has been put in place
to
simplify business regulati
ons and bring in transparency in inspections.

4.1.8

A State MSME Board in line with National B
oard for Micro, Small & Medium
Enterprises shall be constituted as advisory for development of MSMEs.

4.2

Capacity B
uilding & Skill Development

4.2.1

The MSME Department shall strive to maximize Industry ~ Institution linkage
by entrepreneurial education throu
gh empanelled Project Institutes

such as

Institutes of Higher learnin
g, ITIs,
Entrepreneurship
D
evelopment
C
entres

under
the
National Scheme on Entrepreneurship Development
.

4.2.2

The
T
echnical
I
nstitutions
/ Project Implementing Agencies
shall
be
encouraged
th
rough D
irector,
T
echnical
E
ducation &
T
raining

/ Director,
Employment
to assist

MSMEs / MSME Associations
in

skill development,
product

/
process development, r
esearch & innovation.

4.3.

Cluster D
evelopment

4.3.1

Often

MSMEs are
of
small
er

size an
d
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
o
vercoming such limit
ations and maximising
their
oppo
rtunities
.

4.3.2

Based on c
oncentration of industrial
activities
, initially
a list of
54
potential
clusters

(Annexure IV)

has

been
identified

for
interventions
.

4.3.3

Cluster Development Cell

the Directorate of Industries will be strengthened
.

4.3.4

I
nduced cl
usters
of Ancillary / Downstream / other
enterprises

shall be
promoted at industrial hubs
viz.

Kalinganagar, Paradeep, Dhamra, Gopalpur,
Angul, Dhenkanal, Sambalpur, Jharsuguda
, Rayagada

and Keonjhar.

4.3.5

Special Purpose Vehicle (SPV) formed by MSMEs
for the

purpose of
cluster

development

and development of common facilities / infrastructure
shall be

eligible for gap
-
funding support
,

after availing CFC grants from Government
of India Schemes.

4.4. Credit

F
low to MSMEs

4.4.1

A
n Empowered Committee

under the Chair
manship of Principal Secretary,
MSME
as per composition indicated in
para 7.4 of this policy
shall
monitor

credit flow to MSME sector

especially in schemes viz.

Prime Minister
Employment Generation Programme (PMEGP), Pradhan Mantri Mudra Yojana
(PMMY), Cre
dit Linked Capital S
ubsidy Scheme (CLCSS)

and coverage under
Credit Guarantee Fund Trust for Micro & Small Enterprises
.

4.4.2

Government shall
encourage

opening of MSME dedicated
bank
-
branch in
industrial estates / industrial hubs

/ MSME Parks
.

Government land
for such
branches
,

if required can be provided

at concessional industrial rate.

4.4.3

The MSMEs shall be encouraged to
obtain

credit rating
s

from

reputed
rating
agencies for facilitation of credit.

Supporting F
ramework

5.1.

Infrastructure D
evelopment

5.1.1

MSME Parks shall be established in districts depending upon
potential and
demand
.
OSIC
will

be strengthened to act as implementing agency

for the
MSME parks
.
Private developers shall

also

be encouraged for establishment of
such
MSME parks.

5.1.2

Expansion of
th
e
existing industrial estate
s managed by IDCO

shall be taken
up bas
ing

on demand

for land and availability
.

5.1.3

Capital Grant to support quality infrastructure and other incentives related to
infrastructure development
can

be availed under
IPR,

2015

for devel
opment
of

MSME parks.

5.1.4

10% of

the
land
for

large projects
subject to an upper limit of 300 Ac
res

shall
be
earmarked (
by the concerned large industry
)

for setting up

of Ancillary and
D
ownstream Industrial Park

(Ref:

para 5.4.1 (d) of IPR, 2015).

5.2.

Supp
ort for Ancillary and D
ownstream
Enterprises

5.2.1

Facilitate

linkage between
potential
entrepreneurs and l
arge industries for
development of ancillary and downstream
enterprises
.

5.2.2

Facilitate
easy
availability of
product
(s)

/ by product
(s)

/ waste

generated by

the
mother industries to the MSM

E
ntrepreneur
s for further value addition.

5.2.3

L
and
for ancillary
&
downstream

enterprises
in
industrial estates

/
MSME
park
s

shal
l be allotted
on priority basis
.

5.2.4

Plant Level Consultative Committee

for large industries in pr
ivate sector shall
be constituted
with

District Collector

as Chairman and all other concerned
officer
s

as member

for development of ancillary and downstream
enterprises
.

5.2.5

Plant Level Advisory Committee (
PLAC) of CPSUs shall be activ
ated
. Similarly
,
PLAC f
or

major state PSUs shall be put in place.

5.2.6

Focus
sed

Study for development of

ancillary &

downstream
enterprises

shall
be
undertaken
.

5.2.7

An
“
Ancillary & Downstream Enterprise Cell
”

shall be set up in the Director
ate
of Industries, Odisha with
engagement of
requisite

professionals
.

5.3
.

Marketing Assistance

5.3.1

A web portal namely

“
MSME
e
-
Baz
aar
”

shall be developed
to provide
a
platform
to
entrepreneurs
to

showcase their products and directly connect to
buyers.
The portal

shall
promot
e

product branding
“
Made in Odisha” for
global recognition
.

5.3.2

MSME
State
Trade F
air
shall be
organised

Odisha Small Industries
Corporation
Ltd.
with support from

Directorate of Export Promotion &
Marketing
.

RIC
s

/
DIC
s

shall conduct
MSME
exhibitions

district level
.

5.3.
3

Mandatory procurement preference from Micro and Small Enterprises shall be
governed
as per provisions
under The Odisha Procurement Preference Policy
for Micro & Small E
nterprises, 2015

(
details

may be seen
at www.msmeodisha.gov.in
)
.

5.3.
4

Directo
rate of

Export Promotion & Marketing
will be the Nodal Agency for

implementation of
all marketing facilities extended to local MSME
s
.

5.3.
5

Government Departments and Agencies under
their control shall

procure

product
(s)

from MSEs located within the State

as per
provisions
of
“
The
Odisha Procurement Preference Policy for Micro & Small Enterprises, 2015
”
.

5.3.
6

The Directorate of
Industries and

OSIC

in collaboration with MSME
-
DI

shall
organize annual Buyer & Seller Meet and Vendor Development Programmes
i
n
respect of each large industr
y
,

CPSU and major
State

PSU
s
.

5.3.7

Local Micro & Small Enterprises shall be exempted from payment of earnest
money and shall pay 25% of the prescribed security deposit while
participating
in
tenders of Government Department
s
&

Agencies
there
under.

5.4
.

Export P
romotion

5.4.1

In order to
enhance

the export potential of the MSMEs of the State,
Odisha

Export Policy, 2014
is already in operation.

The Directorate of EP&M sha
ll
prepare and update a product
-
country matrix for the MSM
Es of Odisha
clearly
identifying the products
,

which have potential export market overseas
.

5.4.2

The
MSME
e
-
Bazaar
portal
shall be
developed

by Directorate of Industries

and
maintained by Director
,

EP&M.

The Portal

shall be utilized for hosting
catalogue of p
roducts of
local
MSMEs having export potential.

5.5.

Raw Material
Support

5.5.1

The Odisha Small Ind
ustries Corporation Ltd. (OSIC)

shall act as the Nodal
Agency for sourcing and supplying of raw material required by MS
ME
s /

Industrial parks and cluster parks
in the state.

OSIC / NSIC shall set up Raw
Material Bank
(
s
)

to provide such support.

5.5.2

OSIC
may
also
set

up Raw Material Bank
(
s
)

in PPP mode
in collaboration
with
local industr
y

industry
associa
tions

in order to

meet the requirement of raw
material of MS
MEs wherever it is required to do so
.

5.5.3

In order to promote Fly Ash
product

manufacturing units in non
-
fly ash
generating
areas
,
OSIC
may
take steps for
supply of
Fly Ash to
such

MSMEs
.

5.5.4

The
CPSUs
,

state PSUs and large industries

shall accord priority in su
pplying
raw material

OSIC
being

the Nodal Agency for MSMEs at the lowest
possible
rate extended to any other buyer
for

the same material
.

5.
6
.

Technology

U
p
-
gradation

5.6.1

MSMEs shall be encouraged to undertake
interventions to enhance
their

competitive
ness with respect to quality, productivity, reduction in cost, etc. by

up
-
gradation

of technolog
y

and
adoption

of new technolog
y

for

quality
enhancement and

environment friendly production
.

5.6.2

Directorate of Industries in association with MSME
-
DI shall
incre
ase
awareness
of

schemes of Government of India for incentivizing adoption of
cutting edge technology by MSMEs such as
CLCSS

(Credit Linked Capital
Subsidy Scheme)
, QMS (Quality Management Standards), QTT (Quality
Technology Tools). The progress of credit
delivery under such schemes shall
be closely monitored

by Director of
I
ndustries
, Odisha
.

Financial Support F
ramework

6.1
.

Capital Investment Subsidy

Sl.

No.

Category of Enterprise

Quantum of Assistance

1
.

New Micro & Small
Enterprises

@ 25% of capital investment made
in Plant & Machinery

subject to
an upper limit of Rs.1 crore only
.

2
.

New Micro & Small
Enterprises owned by SC, ST,
Differently abled, Women &
Technical (Degree / Diploma)
entrepreneur
.

@ 30% of capital investment ma
de
in Plant & Machinery subject to
an upper limit of Rs.1.25 crore
only.

Sl.

No.

Category of Enterprise

Quantum of Assistance

3
.

New Micro & Small
Enterprises set up in

industrially b
ackward

districts

including KBK districts
.

Additional capital investment subsidy
@ 5% of investment
made in
Plant
& Machi
nery

with an

upper limit
prescribed at sl.1 & 2 above as
applicable.

4
.

New Micro & Small
Enterprises engaged in

recycling of E
-
waste, Hospital
waste, Construction &
demolition waste
.

Additional capital investment subsidy
@ 5% of capital investment mad
e in
Plant & Machinery subject to an
upper limit of
Rs.10 lakh over and
above the limits specified as above.

Note:

For the enterprises set up
by SC / ST / Differe
ntly Abled / Women / Technical

Degree
or Diploma
holders, their s
take in equity participatio
n / s
hareholding shall be 51% or
more

individually or jointly
.

6.2
.

Seed Capital

Assistance

The 1
st

generation
Women, SC, ST,
D
ifferently

able
d

entrepreneurs
setting up

n
ew Micro
/

Small Enterprise
in Industrially Backward Districts

including KBK
distric
ts

shall be entitled to

a
one time grant equivalent to
10
% of

Term Loan

disbursed by the financing

bank
/ institution
subject to
a
maximum of

Rs.15

lakh
.

6.3
.

Project Report Subsidy

N
ew Micro enterprise
s

shall be entitle
d

to a one time grant
up to

Rs
.50,000
/
-

or 2% of
the
project cost
,

whichever is lower for preparation of
the
detailed
feasibility report

detailed project report
,

which will facilitate the
entrepreneur to access finance from Banks /

financial institutions
.

The said
amount will be disb
ursed after sanction and disbursement of

the

first
instalment of term loan by bank

F
inancial
I
nstitution

to the

Micro

enterprise.

6.
4
.

Reimbursement of Audit Cost for Water Conservation

To encourage
w
ater conservation
,

a
one
t
ime

reimbursement of 50%
o
f audit
cost
by approved agencies
limiting to Rs.
25
,000
/
-

shall be provided to new
MSME
s

undertaking water conservation measures
.

6.5
.

Assistance for raising Capital through SME Exchange

New
Small & Medium Enterprises
shall be entitle
d

for
one time grant

@
20
%
of expenditure incurred
for

raising of
capital

through SME

Exchange

subject to
a
maximum
amount of

Rs.
10

lakh after successful raising of equity as per
the
scheme
approved

by
SME
E
xchange
.

6.6
.

Trade Mark Assistance

New MSMEs shall be entitle
d

for
reimbursement of
50% of
expenditure
incurred in
obtaining Trade Mark
subject

to
maximum of
Rs.25,000/
-
.

6.7
.

Reimbursement of Training Expenditure

Government will reimburse 50% of the cost of skill up
-
gradation and training
of local manpower limited to R
s.3000
/
-

per person for a maximum of 10
persons in Micro and 20 persons in Small and Medium Enterprises. Thrust will
be given
on

skill development
of

women to enhance their employability and
for that purpose
an additional training cost o
f Rs.
1000
/
-

shall b
e reimbursed
per woman
.

This support shall not be available to those employee trainees
who are availing benefit under other skil
l

d
evelopment programmes of the
Government.

The Skill up
-
gradation training of local man power
shall

be
supported in consultatio
n with Skill Development & Te
chnical Education
Department /
Odisha Skill Development Authority.

6.
8
.

Award to MSM

Enterprises /
Entrepreneurs

In order to encourage competi
tion and efficiency amongst MSM

enterprises,
annual

State
Award
s

shall be given to

best MSM

enterprises /
entrepreneur
s

in recognition
of

their contribution
in terms of

achieving highest

turnover,
highest employment, adoption of environment friendly & innovative
technology, registration of patent, etc.

for each category of Micro, Small
and
Medium enterprise.

7
.

Revival of S
ick
MSMEs

7.1

The M
icro &

S
mall enterprises are prone to sickness
due to

various reasons.

Reserve Bank of India

ha
s

notified

a framework for revival and rehabilitation
of
sick MSMEs

vide their circular RBI/2015
-
16/33
8 dt.17.3.2016
.

7.2

State Government shall closely monitor implementation of the frame work for
identification
, nursing

and providing rehabilitation package

to
potentially
viable sick units
of the state
under the

frame work
.

7.3

The
identified viable sick MSMEs

shall be assisted at par with new industrial
units for
assistance

/
incentives
admissible
under
this policy.

7.4

Empowered Committee
under the Chairmanship of
Principal Secretary /
Secretary, MSME shall monitor credit
flow
to MSME
s

including potentially
v
iable sick units quarterly. The Committee
shall

comprise of the following:

Principal
Secretary

/ Secretary
, MSME Department

Chairman.

ii.

Director, Institutional Finance, Government of Odisha

Member

iii.

Regional Director,
RBI
, Bhubaneswar

Member

iv.

Convenor, State Level Bankers Committee

Odisha

Member

General Manager, SIDBI
, Bhubaneswar

Member

vi.

Regional Heads of
all
Commercial
/ Rural
Banks

Member

vii.

Managing Director
,
OSFC

Member

viii.

Director, MSME DI
, Government of India,

Cuttack

Member

ix.

Representative of
two

State

Level
Industries
Association

(to be rotated bi
-
annual
ly)

Member

Director of Industries
,

Odisha

Member
-
Convenor

Any other member as per requirement may be co
-
opted by the Chairman.

8
.

G
overnance



Implementat
ion of provisions of this policy shall be periodically

monitored and

reviewed by

High Level Committee
to be constituted
under the Chairmanship
of Chief Secretary

for
mid
-
course correction

amendment
s
, if any.



I
ncentives

/ claims

under this Policy shal
l be
considered and approved

by
the
following
Committee
s to be constituted by MSME Department
:

Sl.

Name of the Committee

Category of Enterprise

District L
evel Committee (DLC) under the
C
hairmanship of General Manager
,

RIC / DIC

Micro Enterprises

Sta
te Directorate
Level Committee (
SDLC) under
the C
hairmanship of Director of Industries,
Odisha

Small & Medium
Enterprises

9
. General Provisions

9.1

This Policy an
d other extant Policies provide

f
iscal & non
-
fiscal incentives
for
MSME
s
. Entrepreneur can
choose to avail a particular incentive
according

to
his / her

eligibility
.

9.2

Incentives as envisaged in this policy shall not be applicable to an enterprise
if the similar incentives are availed under any other policies of State
Government or Government of
India.

9.3

New
MSME
for availing incentives under this policy

shall be

acknowledged
with Entrepreneurship
Identification

Number and

or Production Certificate

and
commencing production within a period of three years from the date of
starting of first fixed c
apital investment
.

9.4

Government may consider c
ondon
ation of

delay
(beyond the stipulated period
of 3 years)
in implementation of projects
due to force majeure (reasons like
natural calamities) on cases to case basis on recommendation of an
Empowered Committ
ee
to be
constituted under the Chairmanship of
Principal
Secretary to Government, MSME Department
.

9.5

New MSME shall become ineligible to get incentives if it does not file its claim
complete in all respects within 1 (one) year of its commencement of
product
ion or within the time limit prescribed in the Operational Guidelines of
respective
incentives.

9.6

Th
is
Policy shall
be effective from the date of its notification and
remain in
force until

substituted by another policy.

9.7

MSMEs

which have commenced fixed ca
pital investment prior to notification
o
f this
P
olicy shall
continue to
be governed and assisted under
Odisha MSMED
Policy, 2009
.

9.8

For
definition
s

of all the terms
used in the policy,
Annexure

be
referred
.

9.9

Doubts relating to interpretation of any term a
nd / or dispute relating to the
operation of any provision under this policy sh
all have to be referred to the
MSME Department
,

Government of Odisha for clarification / resolution
.

Decision

of Government shall be fina
l and binding on all concerned.

9.10

The

lis
t of

ineligible
MSMEs for incentives

in respect of this policy
is

given

Annexure

II
.

9.11

No right or claim for any incentive under this policy shall be deemed to have
been conferred merely on the grou
nd of provision in this policy.

9.12

Implementation of vario
us provisions covering the incentives, concessions etc.
will be subject to
notification of
detailed guide
lines / statutory notifications

by
MSME /
concerned
Administrative

Department.

9.13

An i
ndicative
list

of the
fiscal incentives provided in IPR
-
2015
is

gi
ven
at

Annexure III.
Details

of policy & its
Operational Guidelines

is
available in
www.msmeodisha.go
v.in and
http://diodisha.nic.in

9.14

The list of potential clusters is
given
at Annexure I
V.

* * * *

Annexure
I

DEFINITIONS

For the purpose of this Po
licy, the various terms shall have the meanings assigned to them
here

under:

“Ancillary
Enterprise
”

means an Industrial undertaking which is engaged or is
proposed to be engaged in manufacturing or production of parts, components, sub
-
assemblies, tooling
or intermediates or rendering of services and the undertaking
supplies or renders or proposes to supply or render not less than 50% of its production
or services as the case may be, to one or more other industrial undertakings within the
state.

“CST”

means

Central Sales Tax as defined under the provisions of Central Sales Tax
Act, 1956.

“Downstream
Enterprise
”

means an Industrial undertaking, which is engaged or
proposed to be engaged in value addition of the intermediate or final produce or waste
product o
f one or more industrial undertakings within the state utilizing a minimum of
50%

by weight as base raw material
.

“
Fixed Capital Investment”

means investment in land, building, plant, machinery
and balancing equipment.

"IDCO"

means the Odisha Industrial In
frastructure Development Corporation
.

"IDCO L
and"

means land allotted to and land acquired by IDCO
.

“Industrial Unit”

means any industrial undertaking located inside the State and
engaged in any manufacturing activity.

Industrially
Backward
Districts

incl
udes
Kalahandi, Nuapada, Bolangir, Subarnpur,
Koraput, Malkangir
i
, Rayagada, Nabarangpur, Kandhamal, Gajapati & Mayurbhanj.

“IPR”

means Industrial Policy Resolution

2015.

10)

“Local Micro
,

Small
& Medium
Enterprises”

means Micro
,

Small
and Medium
Enterprises

s
ituated in the State of Odisha.

11)

“Micro
, Small

&
Medium Enterprise
”

means an Industrial Unit

/ Enterprise

as
defined by the Government of India
in MSMED Act, 2006 amended
from time to time.

12)

MSME
-
DI
"

means
MSME Development Institute.

13)

“New
MSME
”

means a

Mic
ro, Small & Medium

Enterprise

where fixed capital
investment
(including the one who has existing land)
has commenced on or after
the
effective date

and
goes into production within three years from the date of starting
of
first fixed capital investment.

14)

"NS
IC"

means the National Small Industries Corporation
.

15)

“OSIC”

means the Odisha Small Industries Corporation

Ltd.

16)

“PMEGP”

means Prime Minister
’s

Employment Generation Programme
.

17)

“Raw Material”
means material

required by
an

enterprise

that will directly go in
to the
composition
/ manufacturing
of its finished products.

18)

“RIC”

means Regional Industries Centre

and

“DIC”

means District Industries Centre
.

19)

“SIDBI”

means the Small Industrial Development Bank of India
.

20)

“
VAT”

means value added tax as defined under the p
rovisions of The Orissa Value
Added Tax Act, 2004‘ & Orissa Value Added Tax Rules, 2005
.

21)

“
Year”

for the purpose of incentives means a period of 365 consecutive days.

* * * *

Appen
dices

Annexure
II

LIST OF INELIGIBLE
ENTERPRISES

Enterprises in
eligible for fiscal

incentives specified under this Policy

All Service enterprises.

Hullers and Rice mills with investment in plant
&

machinery of less than
Rs.
25 lakhs
for industrially
backward districts and less than

Rs.1 crore
for other areas.

Flour mills including manuf
acture of besan, pulse mills and chuda mills except
investment in
plant & machinery
of less than
Rs.
25 lakhs for industrially backward
distr
icts and less than Rs.
1 crore
for other area
s

(excluding
Roller Flour Mills).

(a) Processing of spices with investme
nt in
plant & machinery
with less than Rs.
10
lakh for industrially backward districts and less than
Rs.2 crore

for other areas.

(b)
Units without Spice
-
mark or Ag
-
mark.

Confectionary with investment in
plant & machinery
with less than Rs.
10 lakh for
indust
rially
backward districts and less than

two crore rupees for other area
s
.

Oil mills with expellers including oil processing, filtering, decolouring, colouring
,

refining of edible
oils and hydrogenation thereof
except investment in
plant &
machinery
more th
an

Rs.10 lakh in industrially backward districts.

Preparation of sweets and savouries except investment in
plant & machinery
of less
than Rs10 lakhs for industrially backw
ard districts and less that Rs.50 lakh
for other
area.

Bread
-
making (excluding mecha
nised bakery).

Mixture, Bhujia and Chanachur preparation units.

Manufacture of Ice candy.

Manufacture and processing of betel nuts.

Hatcheries, Piggeries, Rabbit or Broiler farming.

Standalone Spong
e

Iron Plants
.

"Iron and Steel Processors" such as cutting

of sheets, bars, angles, coils, M.S.
sheets, recoiling, straightening, corrugating, drop hammer units
,

etc
.

with low value
addition.

Cracker
-
making units.

Tyre retreading units with investment in plant and machinery of less than Rs.20 lakh.

Stone crushing

units.

Coal / Coke screening,
coal washing, Coal / Coke Briquetting.

Production of firewood and charcoal.

Painting and spray
-
painting units with investment in plant and machinery of less than
Rs.20 lakh.

Units for physical mixing of fertilizers.

Brick
-
mak
ing units (except units making refractory bricks and those making bricks
from fly ash, red mud and similar industrial w
aste not less than 25%
as base
material).

Manufacturing of tarpaulin out of canvas cloth with investment in plant and
machinery of less t
han Rs. 20 lakh.

Saw mill, sawing of timber.

Carpentry, joinery and wooden furniture making except when part of a Wood based
cluster of at least 20 units.

Drilling rigs, Bore
-
wells and Tube
-
wells.

Units for mixing or blending / packaging of tea.

Units fo
r cutting raw tobacco and sprinkling jaggery for chewing purposes and
Gudakhu manufacturing units.

Units for bottling of medicines.

Bookbinding / Rubber stamp making / Making notebooks, exercise notebooks and
envelopes.

Distilled water units.

Tailoring (ot
her than readymade garment manufacturing units).

Repacking / stitching / printing of woven sacks out of woven fabrics.

Pre
-
processing of oil seeds
-

decorticating
, expelling, crushing, parching

and frying.

Aerated water and soft drink units.

Bottling units
or any activity in respect of IMFL or liquor of any kind.

Size reducing / size separating units / Grinding / mixing units with investment in
plant & machinery of less than ten crore rupees except manufacturing of Cement
with clinker.

Polythene
less than 40

micron in thickness / recycling of Plastic materials

Thermal Power Plant.

Re
-
packaging Units.

Note:
List of
Enterprises

indicated above may be modified by the Governme
nt

from time to
time.

* * * *

Annexure
III

HIGHLIGHTS OF FISCAL INCENTIVES FOR MSMEs
IN INDUSTRIAL POLICY
RESOLUTION
–

2015
*

LAND AT CONCESSIONAL RATE



Ground rent @1% of the land
v
alue.



10% of the land for large projects limiting to 300 Acre shall be earmarked for
Ancillary &

Downstream industrial Park.

EXEMPTIION OF PREMIUM ON CONV
ERSION OF Ag. LAND FOR INDUSTRIAL USE



New Industrial units and existing industrial units taking up E/M/D.

Micro & Small Sector

100% up to 5 Acres

Medium Sector

75% up to 25 Acres

Priority Sector

100% up to 100 Acres & 50 % for balance Area

3. INTERE
ST SUBSIDY



New MSME @ 5% per annum on term loan for Five years and same for Seven years
for Industrially Backwa
rd Districts limiting to:

Micro Enterprise

Rs.10 lakh

Small Enterprise

Rs.20 lakh

Medium Enterprise

Rs.40 lakh



One time
Guarantee fee charg
ed under CGTMSE will be reimbursed to MSEs

4. STAMP DUTY EXEMPTION



No stamp duty for land allotted by the
Government

to ID
CO or Govt /IDCO to Private
Industrial

Estate Developers

Transfer of land/
shed by Govt / IDCO/Private
Industrial

Estate Developers
to new units and
existing units acquiring fresh land for E / M / D

Micro & Small Sector

75% of Stamp duty

Medium Sector

50% of Stamp duty

Priority Sector

100% of Stamp duty

Stamp Duty exemption on transfer of management/ conversion to Company/ rec
onstruction
& amalgamation of Companies /execution of loan deed / credit deed / hypothecation deeds

5.
ELECTRICAL
ENERGY

SUBSIDY

Exemption of
Electricity Duty for

5 years

New MSMEs

up to Contract demand of 50
0 KVA

New units in the Priority Sector

up to Contract demand of
5 MVA

New & existing industrial units setting up Captive Power Plant with non
-
conventional sources & bio
-
fuel as Green Energy Subsidy.

Seasonal Units such as food processing, sugar, salt and cotton ginning & pressing unit
shall
be allowed for temporary surrender of a part of their contract demand as per norms of OERC.

One
-
time reimbursement of cost of Energy Audits for achieving energy efficiency up to
-

Micro Enterprise
-
Rs.1 l
akh

Small Enterprise
-

Rs.2 l
akh

Medium En
terprise
-
Rs.
3 Lakh

6. VAT RE
I
MBURSEMENT
–

in a tapered manner

New MSMEs

75% of net VAT paid for 5 years

Limited to 100% of cost of
Plant & M/c

New units in Priority
Sector

100% of net VAT paid for 7 years

Limited to 200% of cost of
Plant & M/c

Exist
ing MSMEs taking up
75% of net VAT paid on increased
Limited to 100% of additional

E / M / D

production for 5 years

cost of plant & M/c for E /M / D

Existing units in Priority
sector taking up E/ M / D

100% of net VAT paid on
increased production for
7 years

Limited to 200% of additional
cost of Plant & M/c for E /M / D

New Pioneer Units

100% of net VAT paid for 9 years

Limited to 200% of cost of
Plant & M/c

Anchor Tenant in

Industrial

park

100% of net VAT paid for 9 years

Limited to 200% of cost
of
Plant & M/c

Above provision will be suitably replaced / modified after GST is introduced

7.
REIMBURSEMENT

OF ENTRY TAX

Plant &
Machinery

New MSMEs & Priority Sector
units

100% of Entry Tax paid on plant & M/c

Existing MSMEs & Priority Sector
u
nits taking up E/M/D

100% of Entry Tax paid on additional plant &
M/c.

Raw Material

New MSMEs & Priority Sector
units

100% of Entry Tax paid for 5 years limited
to 100% of cost of Plant & M/c

Existing MSMEs & Priority Sector
units taking up E/ M/ D

100% of Entry Tax paid on additional raw
materials for 5 years limited to 100% of cost
of additional Plant and machinery.

New Pioneer Units under each
Priority Sector

100% of Entry Tax paid for 7 years limited to
100% of cost of plant & M/c

Above prov
ision will be suitably replaced / modified after GST is introduced

8. REIMBURSEMENT OF
ENTERTAINMENT

TAX (ET)

New Multiplex Cinema Hall of at least 3 screens with minimum
capital investment of Rs.3.00 crores

100% of ET paid for 5
years

Existing
cinema hall upgraded to a multiplex and modernised
with minimum investment of rupees one crore

100% ET paid for 5 years

The above provision will be suitably replaced/ modified after GST is introduced

9. EMPLOYMENT COST SUBSIDY
-

for employing skilled &
semi
-
skilled workers of domicile of
Odisha as regular employees.

New & existing

units taking up
E/M/D in Micro &

Small Sector

Male workers
-

75% of ESI &

EPF

contribution for 5 years

Female workers
-
100% of ESI

EPF

contribution

for

5 years

New and ex
isting units taking up
E/M/D in

Medium sector

Male workers
-
50% of ESI &

EPF

contribution for 3 years

Female workers
-
100% of ESI

EPF

contribution for 3 years

New and existing units taking up E/M/D in MSME and Priority
Sector
–
displaced for th
e establish
ment of the said Industrial

unit

100% of ESI & EPF
contribution for 3 years

New and existing Industrial units undertaking E/M/D in MSME
and Priority Sector
-

with Disabilities

100% of ESI & EPF
contribution for 5 years

Employment Cost Subsidy
-
for add
itional period of 2 year for Industrially Backward Districts.

Excerpt shown. Open the full act in Lexace.

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