DEFINITIONS
 

• PLI SCHEMES – “With the objective to boost domestic manufacturing, investments and export in the telecom and networking products Department of Telecommunications (DoT) notified the “Production Linked Incentive (PLI) Scheme” on 24th February 2021”
 

• THRUST SECTOR – “The State Government has notified certain potential sectors as “Thrust sector” for investment, the Thrust sector industries are eligible to get additional subsidy under the State Incentive Scheme”
 
• PANCHAMRIT PRINCIPLE – Laid down by PM Modi during COP26 SUMMIT

• ♦ The first agenda was to raise the non-fossil fuel-based energy capacity of the country to 500 GW by 2030.
• ♦ Also, by 2030, 50% of the country’s energy requirements would be met using renewable energy sources.
• ♦ The country will reduce the total projected carbon emission by one billion tons between now and the year 2030.
• ♦ The carbon intensity of the economy would be reduced to less than 45% by 2030, Modi said as the fourth point.
• ♦ As the final agenda, he said the country would become carbon neutral and achieve net zero emissions by the year 2070.

 
• ZED Certification – MSME Sustainable (ZED) Certification is an extensive drive to create awareness amongst MSMEs about Zero Defect Zero Effect (ZED) practices and motivate and incentivize them for ZED Certification while also encouraging them to become MSME Champions.
 

• SME Exchange – A company must meet some criteria laid down by the SEBI to get its shares listed on a regular stock exchange. These include having an operating profit of Rs 15 crore in the last three years, the minimum post-issue market cap of at least Rs 25 crore, etc. But over a period, the need to allow even smaller/younger companies to raise money from the public through the capital markets was felt. Thus, such companies, referred to as SMEs (small and medium enterprises) were allowed to raise capital in a separate trading platform, wherein the entry barriers would be lower. This trading platform is called an SME exchange.
 

INTRODUCTION & BACKGROUND
 

Just ahead of the state assembly polls, Gujarat CM Bhupendra Patel on Wednesday launched ‘Atmanirbhar Gujarat Schemes for Assistance to Industries’, rolling out a slew of incentives for the micro, small and medium enterprises, large and mega industries of the state. The government aims to attract investments worth Rs 12.5 lakh crore to create jobs for some 15 lakh youths.
 

As part of the scheme, MSMEs and large companies will be able to avail 75% net SGST reimbursements on fixed capital investment over 10 years, a reimbursement of employee provident fund for 10 years and electricity duty exemption for five years.
 

The benefits under the scheme will be extended to 10 sectors including green energy ecosystem, mobility, capital equipment, metals and mineral, textile and apparel, sustainability, agro processing, chemicals, gems and jewelry and healthcare.
 

The scheme aims to attract industries and investors and thereby create largescale employment opportunities. “Gujarat is a land of entrepreneurs. The state is India’s manufacturing hub. The scheme will be instrumental in providing special assistance needed by industries to enable them to become part of global supply chains,” said CM Patel.
 

According to Gujarat CM Bhupendra Patel, the scheme will also encourage industries towards green manufacturing practices and adopt decarbonization initiatives. Under the scheme, micro industries will attract capital subsidy up to Rs 35 lakh, MSMEs will gain interest subsidy up to Rs 35 lakh per annum up to 7 years and incremental incentives will be extended to women entrepreneurs, young entrepreneurs, startups, and differently abled entrepreneurs.
 

On the other hand, largescale and mega industries will get interest subsidy up to 12% of fixed capital investment. Additionally, mega investments with at least Rs 2,500 crore of investment and employment commitment of 2,500 persons will also get net SGST reimbursement up to 18% of fixed capital investment over 20 years and 100% of input SGST paid on capital goods shall be reimbursed over 20 years in addition to 100% reimbursement of stamp duty and registration charges paid to govt for purchase and/or lease of land meant for the project Minister of state for industries Jagdish Vishwakarma said, “33 lakh MSMEs of Gujarat have been key contributors to Gujarat’s inclusive growth and generation of sustainable employment opportunities, particularly in semi-urban and rural India. The schemes for assistance to industries shall transform Gujarat’s manufacturing landscape in the coming years.”
 

ASSISTANCE TO MSME
 

Micro, small and medium-sized enterprises (MSMEs) have been key contributors to Gujarat’s inclusive growth and generation of sustainable employment opportunities, particularly in semi-urban and rural India. Over the time, MSMEs have moved up the value chain from manufacturing of simple goods to sophisticated products. MSMEs also play a central role in nation building by generating large employment opportunities for youth as well as through industrialization of rural & backward areas, and thus, reducing regional imbalances, assuring more equitable distribution of national income and wealth. However, MSMEs function in a highly competitive environment and require an enabling ecosystem to sustain growth. In order to enable Gujarat’s MSMEs to be globally competitive, boost value addition and also encourage youth to pursue their entrepreneurial ambitions, MSMEs shall be eligible for following benefits under the Aatmanirbhar Gujarat Scheme for assistance to MSMEs:
 

A. Micro, Small and Medium Enterprises:
 

For the purpose of eligibility under this scheme, a micro, small or medium enterprise means an enterprise which has fixed capital investment made in Plant and Machinery as per following:

• a) Micro: Less than or equal to INR 1 crore
• b) Small: More than INR 1 crore and less than or equal to INR 10 crore
• c) Medium: More than INR 10 crore and less than or equal to INR 50 crore

The enterprise must have obtained acknowledgement/ registration, as the case may be from appropriate authority.

B. Assistance of capital investment subsidy to micro enterprises
 

Micro enterprises shall be eligible for capital investment subsidy based on the category of taluka:
 

C. Assistance for Interest Subsidy to Micro, Small and Medium Enterprises in manufacturing sector
 

• a) 1% additional interest subsidy to differently abled entrepreneur, Women entrepreneur, and registered startup in manufacturing sector.
• b) 1% additional interest subsidy to young entrepreneur below age of 35 years on the date of sanction of term loan.
• c) In any case, eligible enterprise shall have to bear minimum 2% interest levied on term loan by bank/financial institution
• d) An existing enterprise which installs new solar power plant or any other renewable power plant for captive consumption in the premises will be eligible for interest subsidy in accordance with the location of the Enterprise. In addition to the Interest Subsidy as mentioned above special provision is made for interest subvention on such installation. However, incentive will be available only once. If an enterprise has already availed of this subsidy under the previous scheme, such enterprise shall not be eligible for this subsidy under this scheme.

D. Net SGST reimbursement to Micro, Small and Medium Enterprise (MSMEs)
 

MSMEs shall be eligible for reimbursement of net SGST based on the taluka category of the project subject to following ceilings:
 

The period of 10 years shall be from the date of commencement of commercial production.
 

E. EPF Reimbursement to MSMEs
 

MSMEs shall be able to claim reimbursement of employer’s contribution under Employees’ Provident Fund (EPF) made by them for their new employees working in Gujarat for a period of 10 years from DoCP.
 

The reimbursement shall be made subject to following criteria:

• a. 100% of employer’s statutory contribution under EPF amount paid, and
• b. The ceiling of incentive amount per employee will be 12% of the employee’s basic salary plus applicable Dearness Allowance (DA) and retaining allowance or INR 1800 per month, whichever is lower.

F. Other Schemes for comprehensive support to MSMEs
 

The MSMEs will continue to avail support under following schemes:
 

• ♦ Interest Subsidy to service sector MSMEs
• ♦ Assistance for quality Certification –
• ♦ ERP assistance: 65% of cost for ERP System upto Rs.1,00,000/-
• ♦ Quality certification – 50% of fees payable for national/ international certification and 50% cost of testing equipment’s & machinery required for certification up to Rs.
• ♦ Financial Support to MSMEs in ZED Certification = 50% of assistance upto Rs.50,000
• ♦ Assistance in implementation of Information and Communication Technology – 65% of assistance up to Rs.5,00,000
• ♦ Assistance for Technology Acquisition – 65% of assistance up to Rs.50,00,000
• ♦ Assistance for Patent Registration – 75% of assistance up to Rs.25,00,000
• ♦ Assistance for saving in consumption of Energy and Water
• ♦ Assistance for raising capital through SME Exchange – 25% of expenditure incurred Maximum to Rs.5,00,000
• ♦ Assistance for reimbursement of CGTMSE fees – 100% Reimbursement of annual fees paid for five years
• ♦ Rehabilitation of Sick enterprise
• ♦ Assistance for Power Connection charges – 35% of charges paid to HT/LT service line up to Rs.5,00,000
• ♦ Assistance in Rent to MSEs – 65% of rent paid maximum limit of Rs.1,00,000 per annum

ASSISTANCE TO LARGE INDUSTRIES AND THRUST SECTOR
 

Large enterprises play an important role in industries role in industrial development of a region. Such industries help in developing an ecosystem around them and thereby having a multiplier effect on employment opportunities. Gujarat’s well-developed business ecosystem enabled by vast infrastructure and driven by the investment-friendly policies of the government has attracted several large-scale investments across sectors. Such investments have had a multiplier effect on the state and national economy as well as employment generation. These large-scale investments have also created substantial opportunities for MSMEs in the state for providing forward and backward linkages. Since India is one of the fastest growing economies in the world. It is opportune time to support such large industries to attract such investments and support local manufacturing. Hence, manufacturing enterprises with fixed capital investment in Plant and Machinery above INR 50 crore shall be eligible for following incentives:
 

A) Thrust manufacturing sectors:
 

B) Assistance Interest Subsidy:
 

Interest subsidy will be given as per following rates
 

In any case, the industrial undertaking shall have to bear a minimum 2% interest levied on term loan by the financial institution.
 

C) Net SGST reimbursement:
 

The eligible large industrial undertaking will be eligible for reimbursement of net SGST based on the taluka category of the project subject to following ceilings:
 

The period of 10 years shall be from the date of commencement of commercial production.
 

D) EPF Reimbursement
 

Eligible large industrial undertaking shall be able to claim reimbursement of employer’s contribution under Employees’ Provident Fund (EPF) made by them for their new employees working in Gujarat for a period of 10 years from DoCP.

The reimbursement shall be made subject to following criteria:

• a. 100% of employer’s statutory contribution under EPF amount paid,

AND

• b. The ceiling of incentive amount per employee will be 12% of the employee’s basic salary plus applicable Dearness Allowance (DA) and retaining allowance or INR 1800 per month, whichever is lower.

ASSISTANCE TO MEGA INDUSTRIES
 

In order to be globally competitive, it is important to set up mega sale manufacturing enterprises and build on economies of scale. These Mega industries act as anchor units and enable building up of an entire ecosystem of MSMEs & large industries around them along with development of allied services. Such mega scale industries would also help in increased research & development in such sectors. With this view, the Government of Gujarat has launched the Aatmanirbhar Gujarat Scheme for assistance to Mega Industries.
 

A) Mega Industrial Unit
 
The Mega Industrial Unit must fulfil following criteria.
 

• 1. It must be a manufacturing unit, and
• 2. Investment in Plant & Machinery of at least INR 2,500 crore, and
• 3. Provides direct employment to at least 2,500 persons, amd
• 4. Must belong to one of the Thrust sectors defined in policy

B) Thrust manufacturing sectors
 

C) Assistance of Interest Subsidy to Mega Industrial Units
 

Industrial subsidy will be eligible at @7% on Term Loan subject to maximum of 1.2% of Eligible Fixed Capital Investment p.a. for 10 years
 

In any case, Mega Industrial unit shall have to bear a minimum 2% interest levied on term loan by the financial institution.
 

D) Net SGST reimbursement to Mega Industrial Units
 

The eligible projects will be eligible for reimbursement of net SGST at 100% of net SGST subject to maximum 0.9% of eFCI p.a. for 20 years
The eligible period of 20 years shall be from the date of commencement of commercial production.
 

E) Reimbursement of SGST on capital goods
 
Eligible Mega industrial units will be eligible for 100% reimbursement of Input SGST paid on capital goods to the extent input tax credit is admissible under Gujarat GST Act, 2017.
The reimbursement shall be provided in twenty equal annual installments.
 

F) EPF Reimbursement
 

Eligible Mega industrial units shall be able to claim reimbursement of employer’s contribution under Employees’ Provident Fund (EPF) made by them for their new employees working in Gujarat for a period of 10 years from DoCP.
 

The reimbursement shall be made subject to following criteria:

• c. 100% of employer’s statutory contribution under EPF amount paid,

And

• d. The ceiling of incentive amount per employee will be 12% of the employee’s basic salary plus applicable Dearness Allowance (DA) and retaining allowance or INR 1800 per month, whichever is lower.

G) Reimbursement of Stamp duty and registration fees
 

Eligible Mega industrial units shall be eligible to claim 100% reimbursement of stamp duty and registration charges paid to Government of Gujarat for purchase and/or lease of land meant for the project.

MSME, Large and Mega Industries shall be eligible to receive exemption from Electricity Duty as applicable under the Gujarat Electricity Act, 2003.

The Aatmanirbhar Gujarat schemes for assistance to industries is expected to transform the Gujarat’s manufacturing landscape in the coming years.

The scheme is expected to attract an investment of INR 12.5 lakh crores generating employment opportunities for over 15 Lakh people in Gujarat.

CONCLUSION
 

Aatmanirbhar Gujarat schemes for assistance to industries shall transform the Gujarat’s manufacturing landscape in the coming years. The scheme is expected to attract an investment of ~INR 12.5 lakh crores generating employment opportunities for over 15 lakh people in Gujarat.

The benefits under the scheme will be extended to 10 sectors including green energy ecosystem, mobility, capital equipment, metals and mineral, textile and apparel, sustainability, agro processing, chemicals, gems and jewelry and healthcare.

This scheme is a step towards the Aatmanirbhar Bharat by envisioning Aatmanirbhar Gujarat.