economy & finance forum · capital subsidy on fci @ rs 25.00 lakhs to 100.00 lakhs maximum up...

Schemes & Incentives For Industry By Central And State Government

By Prashant MohotaManaging Director, Gimatex Industries

Promoter of Hinganghat Integrated Textile Park Chairman – YEG of (Confederation of Indian Textile Industry,

Ex-Vice President of VIA

ECONOMY & FINANCE FORUM

Presented By Prashant Kumar Mohota

Indian Economy Advantage Vidarbha Best option for investment is Manufacturing Common Schemes of Central & State Govt. Sectoral Schemes of Textiles, Food & Agriculture, Logistics Manufacturing Industry

- Set Up Phase- Operating Phase

General Precautions Disclaimer


Fastest Growing Economy in the worldGDP Annual Projected growth>7.5%

Estimated to be Top 3 economies in the world $5 trillioneconomy by 2025 and $10 trillion economy by 2030.

Chinese Economy showing slowdown in GDP Growth @ 6.3%in 2019 and 6 % in 2020 due to increased labour cost &stringent environmental norms

Higher Young Population in India. Easier Labour Laws in India


Industry Friendly policies Push for Make in India. Restrictive import policy by trade & non-trade barriers GST ‘One Nation One Tax’.

- easier tax management - organized & fair business- opportunity for integrated operation- consistency of taxes - moving away from regional imbalance


Centrally Located in India. Power Benefits are significantly higher. Potential Sector - Food & Agricultural, Textile, Logistics High focus of Government for Industrialization by giving

highest slab of incentives under PSI 2013 Extra FSI due to Metro Region & Metro Rail Mumbai- Nagpur Samruddhi Expressway. MIHAN – Logistical Hub in making 4 ICD’s in vicinity of 100kms for EXIM operation


Low returns on- Saving schemes, Bank fixed deposits- Gold, Cash etc.- Real Estate Schemes- Mutual Funds, Stock etc.- PF, NPS, Gratuity, etc.

Job creation opportunity Ready Platform for coming generations. Greater Autonomy for working Self Satisfaction


1. Package Scheme of Incentives (PSI 2013)

Recovery of 60% to 100% Investment within 10 years in form of followingincentives like

– 100% Gross SGST on Intra State Sale.- Interest Subsidy On Term Loan up to 5% per annum- Power tariff Subsidy Rs 1 - 2 / Unit- Waiver of Stamp Duty on Purchase / Lease / Mortgage etc.- Exemption from Electricity Duty- Many other benefits for MSME’s

New Definition of MSME based on Sales < 250 Cr. (Proposed)


2. Special Policy for Women Entrepreneur 2017

Eligibility when MSME unit having 100% Women ownership & 50% women employment

Capital Subsidy on FCI @ Rs 25.00 Lakhs to 100.00 Lakhs maximum up to 50% of FCI

Power Tariff Subsidy @ Rs 2.00 per unit. Interest Subsidy @ 5% maximum up to twice to the value of electricity bills

paid One level higher Tax slab for IPS refund Subsidy up to 50% cost of developing trademark limited to Rs 1.00 Crore Trade Exhibition Participation:- 75% of Rent in Indian Exhibition limited to Rs

50000 and Rs 3.00 Lakh for International Exhibition


3. Start Up India Scheme

Eligibility is working towards Innovative products or potential for high employment generation

Self Certification under 9 Environmental & labour Laws. IPR Support:- Government to bear facilitation cost & 50% rebate on trademark

filing. INR 10,000 Crore Fund:- Funds for investment into startups through Alternate

Investment Funds. Startup Patent Application:- Fast track & up to 80% rebate in filling patents Public Procurement Norms:- Exemption from requirement of Earnest Money

Deposit in government tenders and prior experience relaxation. Tax Exemptions:- Income Tax exemption for a period of 3 consecutive years


4. Credit Linked Capital Subsidy Scheme:-

Applicability To MSMEs on Term Loan taken up to 1.00 Croreon Eligible Plant & Machineries.• 15% Capital subsidy subject to maximum of Rs 15.00 Lakh(At present this Scheme is under revision and will be launched soonafter obtaining the necessary approvals)


Textile Sector :

• State Textile Policy 2018-23:-Applicable for all sectors starting from Ginning , Spinning, Weaving / Knitting, Processing, Technical Textile, Garmenting Industry• Centrally Sponsored Amended TUFS (ATUFS)Applicable for all sectors starting from Weaving / Knitting, Processing, Technical Textile, Garmenting Industry• Power Tex Scheme Applicable only for power looms


Food & Agricultural Sector : MOFPI (Pradhan Mantri Kissan Sampada Yojna)

1. Cold Chain Scheme - Cumulatively Capped at 10 Cr.- Storage & Transporation Infra 35% - Value Addition & Processing Infra 50%

2. Creation / Expansion of food processing & preservation facility – 35% of the project cost with capped at Rs. 5 Cr

3. Infrastructure for Agro Processing Cluster – 35% of Project4. Creation of Backward & Forward Linkages – 35% of Project

Schemes of National Horticultural Board1. Commercial Horticulture Scheme – 35/40/50 % Capped at Rs. 50.75 lacs2. Cold Storage Scheme - 35% of the project cost

Mukyamantri Krishi va Anna Prakriya Yojna.30 % of Ptoject Cost Capped upto 50.00 Lacs

Dairy Entrepreneurship Development Scheme- NABARD. Capital Investment Subsidy Scheme for Commercial Production Units for organic/ biological

Inputs- NABARD.. Agricultural Marketing Infrastructure-NABARD


Logistic Sector: GOI grant industry status to logistic sector enabling credit

availability under priority sector lending interest rates. Maharashtra Logistic Park Policy.

- Location made Zone neutral - Additional FSI of 200%

Any plot of MIDC can be used now for warehousing Subsidy for Developing Infrastructure for Agro Processing

Clusters like Roads, Compound Walls, Warehouses, Coldchain etc.


Infrastructure Facilities like Land & Building Technology or Plant & Machinery Capital / Financing Manpower Resources or Labour . Management Systems, Product, Process Development


Land can be developed by own or In Industrially Developed Zone like MIDCs, Industrial Parks (HITP) , Mega Food Parks, SEZ(MIHAN) etc.

- Available on subsidized rate - Benefit of common facilities and infrastructure like road,

electricity line, sewage etc. Stamp Duty Exemption on Purchase, lease, Mortgage under PSI 2013

by DICs, GOM Deemed NA Provisions for land in Industrial Zone of RP/ DP Additional FSI upto 1 on payment of premium Powers for zone conversion delegated at regional level Land & Building Costs will form part of FCI under PSI 2013 Integrate Industrial Area (IIA) with higher FSI & priority sector lending

rate for long term loans


Applicability only for Approved technology covered for TUFS and CLCSS Schemes.

Capital Subsidy on Purchase of Latest Technology under various schemes of GOI and GOM

Schemes are ATUFS (MOT), State Textile Policy 2018-23, CLCSS Scheme (DCMSME), MOFPI, PSI 2013(DIC GOM), Special Policy Women Entrepreneurs 2017 (DIC GOM)


Priority sector lending by all banks to MSMEs benefits in form of lower interest and Target lending ◦ Term Loan – Reduced rate for plant setup @ 9%◦ RXIL – Receivable exchange for bill discounting @ 8.5%◦ Warehousing loan – for storage and stocking of raw materials @ 9%◦ Farmer Loan – Procurement of farm produced @ 5%

CGTMSE Scheme for collateral free lending by Govt. of India & SIDBI up to Rs 2.00 Crore.

Fund of Funds for Startups by SIDBI under Start up India Scheme of GOI. PMEGP & Seed Money Scheme for Small Projects up to Rs 25.00 Lakhs. Interest Subsidy under PSI 2013 and Women Entrepreneur policy Post

Commercial Operation. Venture capital Funds- IDBI Venture Capital Fund Ltd for SC & ST

Entrepreneurs


• PMRPY– Reimbursement of PF of 12.5% - Reimbursement of ESIC 3% (Proposed)

• Skill development Scheme - Basic Classroom Training - MSSDS / PMKVY with reimbursement of Rs 42 / Hr for 340 Hours- DDUGKY with reimbursement of Hostel, Food, Conveyance etc. along with Rs 42 / Hr - Recognition of Prior Learning(RPL) – Rs. 2500 per person

• Skill Development Scheme – On the Job training - NAPS for training Apprentice with reimbursement of Rs 1500 per person per month for a period of 1 year under Designated and Optional trades - Employment Promotion Programme (EPP Scheme)

• Fixed Term Employment Scheme • Easier Retrenchment of labour force up to 300 employees• All shift working for women workforce opening the door for large availability of dedicated,

obedient & punctual option


Various Benefits for Strengthening MSME under PSI 2013.Sr No Nature of Benefits Quantum

1 Capital Subsidy on technology up gradation 5% of Cost subject to Maximum of Rs 25.00 Lakhs.2 Subsidy on quality certification expenses 75% of Expenses limited to Rs 1.00 Lakh.3 Subsidy on capital equipment for cleaner

production measures25% of expenses limited to Rs 5.00 Lakhs.

4 Subsidy on patent registration Expenses 75% of expenses limited to Rs. 10 Lakhs for the National patents and Rs. 20 lakhs for the International patents.

5 Incentives for Credit Rating of MSMEs 75% of cost limited to Rs 40,000/-

7 Cost of energy audit 75% of cost limited to Rs. 2.00 lakh 8 Subsidy on Capital Equipment under the

measures to conserve/recycle water.50% of the cost limited to Rs. 5 lakh

9 Subsidy on Capital Equipment for improving energy Efficiency

50% of the cost limited to Rs. 5 lakh

Cost of water audit 75% of cost limited to Rs Rs. 1.00 lakh6


Fast track & up to 80% rebate in fillingpatents under Start Up India Scheme

Lean Manufacturing Competitiveness Scheme(LMCS) for MSMEs- Financial Support of 80%of Consultant fees for each mini cluster.

ZERO Defect System- special incentive forforming Quality circles etc.


Power and Energy Marketing Support Export Incentives Scheme Taxation Benefits Ease of doing business Grievance Handling & Information flow


Power & Energy

Power

@ Rs. 4

Electricity Duty

Exemption

[email protected]

Vid Subsidy Rs @2.32

PF, LF, BD

23% Rebate

Solar Net Metering

Rs.@4

BG for Security Deposit

POWER• Special incentive to Vidarbha of Rs.

2.32 on achieving 89% Load factor & above

• New units after 2016 eligible to get 75 paise additional discount

• New connection given within 24 hrswherever infrastructure permitsCOAL • Availability of coal & other minerals

by way of transparent auctions⁻ Spot Auctions every month ⁻ Linkage options for 5 years ⁻ Exclusive Auctions

• Special quota for MSME’s by state nodal agency MSMC


Public procurement support - Relaxation in norms of the priorexperience criteria in public procurement to MSMEs andStartups.

GeM (Government e-Market Place) - Online procurement ofcommon use Goods & Services required by variousGovernment Departments / Organizations / PSUs.

Special marketing support under Women Empowermentscheme


Easy Access to Custom Data for import & export Duty Drawback Scheme. MEIS / SEIS / Served from India scheme Interest subvention for packing credit for certain items

(Fabrics, engineering etc.) EPCG , Advance Authorization etc. AEO & other reduction in transaction cost Online application of certifications like COO, etc. Market Development Access- Trade Exhibition Support


1. Direct Tax – Income Tax Lower Corporate taxes to 25% up to annual turnover of Rs 250.00 Crore. Income tax Exemption for Startups for 3 years for entity having turnover up

to Rs 25.00 Crore. MAT @ 18.5% for SEZ’s and MAT Credit in Following years Additional depreciation for 1st year of setup @ 20% 30% deduction for additional employment under Sec 80JJ

2. Indirect Tax – GST IPS Benefits under PSI 2013- MSMEs -100% Gross SGST of Intra State Sale. Large Scale- 60% to 100% Gross SGST of Intra State Sale. Mega & Ultra mega project- As per Eligibility Certificate on basis SGST on

Intra State Sale


MAITRI - a Single Window fast tracked online platform for applying various licenses, incentive.

TUFS, CLCSS subsidies related online application through lender Banks.

Online Application for Start up Benefits-www.startupindia.gov.in.

Taxation Compliances are online and easier Self Certfication for MPCB unders Different Zones Scrapping of RRZ policy which hindered growth


“Zilla Udyog Mitra” (ZUM) under the Chairmanship of Collector & Deputy Industries Commissioner Meetings.

MSME SAMADHAAN -Protection to MSME creditors under (MSMED) Act, 2006 through MSEFC

Industry facilitation cell Insolvency & Bankruptcy code for disputes resolution and

recovery from creditors Right to Information Act 2005 Right to Services


Project should be commercially viable without considering government incentives.

Plan the project under boundaries of all applicable laws and government regulations such as Valid Town Planning sanctions for land & building.

Timely Compliances of All regulatory measures imposed by government

Avoid Diversion of Funds to Non-productable Activities during the set up of business.

Plan the project only after getting experience/ in depth knowledge of proposed business activity


All highlights mentioned in presentation are based onavailable government policies and schemes.

Instructed to read scheme documents and policies carefullybefore planning investments

Thank You

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