Machinery loan, Business loan in Ahmedabad

Industrial Policy 2020 | Propelling Gujarat’s Industries for an Atmanirbhar Gujarat

Revised Definition of MSME
Composite Criteria :- Investment in Plant & Machinery or Equipment and Annual Turnover

Classification Manufacturing & Services
Micro Investment < Rs 1 Cr


Turnover < Rs 5 Cr

Small Investment < Rs 10 Cr


Turnover < Rs 50 Cr

Medium Investment < Rs 50 Cr


Turnover < Rs 250 Cr

Comment : Government has expanded the eligibility criteria and now many units with higher investment as well as higher turn over also eligible as MSME.

Incentive to Large Industries :-
Gujarat is the first state to undertake a bold decision to de-link incentives from SGST. Upto 12% of FCI (fixed Capital investment) will be given to large industries for setting up manufacturing operations in the state in the form of capital subsidy.

Taluka Category General Sectors Thrust Sectors (15)
Category 1 •  10% of FCI •     12% of FCI
Category 2 •  8% of FCI •     10% of FCI
Category 3 •  4% of FCI •     6% of FCI

List of Thrust Sectors (Core Sector & Sunrise Sector)

1 Electrical machinery & equipment
2 Industrial Machinery & equipment
3 Auto & Auto Components
4 Ceramics
5 Technical Textiles
6 Agro & Food Processing
7 Pharmaceuticals  & Medical devices
8 Gems & Jewellery
9 Industry 4.0 manufacturing
10 Electric Vehicle and its components
11 Waste management projects
12 Green Energy (Solar & Wind Equipment)
13 Eco-friendly compostable material (substitutes to traditional plastics
14 100% export oriented units, irrespective of sector

• This benefit will be given over a period of 10 years subject to annual ceiling of INR 40 Crore.

• If the eligible cash subsidy could not be disbursed within a period of 10 years due to the upper ceiling of Rs. 40 cr per annum, for such unit the eligible period of 10 years will be extended up to an additional 10 years with the condition that the annual ceiling will remain Rs. 40 cr per annum.

• If the eligible cash subsidy is not disbursal within a period of 20 years due to the upper ceiling of Rs. 40 cr per annum, the total entitlement of cash subsidy will be disbursed in equal installments of 20 years without any upper ceiling

Comment: Gujarat Government has rightly delinked the scheme from SGST and now Large units will enjoy a higher amount of subsidy with more simplicity.
Besides this, new industries will continue to get an exemption from Electricity Duty for 5 years.
The incentive to MSME for Manufacturing Sector

Incentive to MSME for Manufacturing Sector:

1. Capital Subsidy :
–  Unit will be eligible for Capital Subsidy upto 25% of eligible loan amount upto INR 35 lakhs. Additionally, if the eligible fixed capital investment is above INR 10 crores, the unit will be eligible for an additional capital subsidy upto INR 10 lakhs.

2. Interest Subsidy :- Unit will be eligible for Interest subsidy upto 7% of interest levied on term loan upto INR 35 lakhs per annum for a period upto 7 years.

1% additional interest subsidy to SC/ST Entrepreneur/ physically challenged entrepreneur/ Women entrepreneur/ Start Up in manufacturing sector.

Besides this, 1% additional interest subsidy to young entrepreneur below age of 35 years on the date of sanction of loan

Incentive to MSME for Service Sector:

Interest Subsidy :-  Unit will be eligible for interest subsidy upto 7% upto INR 35 lakhs per annum for a period upto 7 years to these service sector MSMEs in the state including those engaged in Financial Services, Healthcare Services, Audio Visual services, Construction related engineering services, Environmental services etc.

Comment : Now MSME units will be eligible for higher amount of capital subsidy as well as interest subsidy with longer eligible loan repayment period compared to earlier scheme.

Other Important Incentives

Acquisition of foreign technologies by MSMEs:  The government for the first time, will provide support upto 65% of the cost of acquiring foreign patented technologies. (Maximum support upto INR 50 lakh). This will help raise the manufacturing prowess of our MSMEs making them globally competitive.

Market development assistance to MSMEs:  In order to encourage MSMEs to market their products at a national & international level, the new Industrial Policy will provide fiscal assistance to MSMEs @75% of stall rent upto INR 2 lakh for exhibitions in India and @60% of stall rent upto INR 5 lakh for exhibitions outside India.

Encouraging MSMEs to use Solar Power:

With an aim to further ease the process of utilizing rooftop Solar Power in MSMEs, the power cycle for calculation of the consumption of units has been increased from 15 minutes to 7 AM – 6 PM. Also, for the purchase of surplus solar power from MSMEs, the price has been increased from INR 1.75/unit to INR 2.25/unit.
Additionally, existing industries who switch to Solar Power, Interest Subsidy will be provided on the term loan Besides these, Incentives will be given to MSMEs for implementation of Enterprise Resource Planning (ERP), Information & Communication Technology, obtaining quality certifications including ZED certification, patent filing, Service line, and Power Connection charges, Rent assistance, etc.

Government land to be given on long term lease basis:
In order to further give a thrust to balanced regional development in the state, the government will facilitate industries in getting “Government Land” on long term lease up to 50 years(further extendible as per prevailing policy) to industrial enterprises @6% of the market rate. The industries will be able to mortgage the land.

Research & Innovation:
Research & Innovation plays an important role in the development of a robust industrial ecosystem. Therefore, we have consciously focused on the development of new R&D institutions. The policy will provide support up to INR 5 crore to private companies/institutions for setting up R&D and product development centers
Assistance for Contract/Sponsored research work from any industrial enterprise/Industrial association to recognized R&D institution / technical colleges approved by AICTE, will be considered @ 50% of project cost, excluding the cost of land and building, subject to max Rs. 50 Lakhs

Development of Industrial Infrastructure:
The policy will provide incentives to private developers for setting up Private Industrial Parks in the state @25% of Fixed Capital Investment up to INR 30 crore. In the case of Vanbandhu Talukas, the policy will support setting up of industrial parks @50% of Fixed Capital Investment up to INR 30 crore. This will support industrial infrastructure creation & developing last-mile connectivity. Stamp Duty reimbursements will be given to developers (100% of Stamp Duty) and individual units (50% of stamp duty). In order to promote clusters, financial assistance of up to 80% of the Project Costupto INR 25 Crore for set up of Industrial Infrastructure such as construction and up-gradation of roads, warehousing facilities, fire stations, underground utilities, etc. will be provided.
The policy will provide 80% of financial assistance up to INR 25 crore for Dormitory Housing in manufacturing clusters in order to provide better living conditions for labourers in industrial clusters.

Sustainable Manufacturing:
Up to INR 75 lakh for Zero Liquid Discharge plants: 50% of capital subsidy up to INR 75 lakhs will be given to industries practicing at least 50% waste recovery through Zero Liquid Discharge as certified by GPCB.

Assistance for Cleaner production measures: The policy will give Incentives to MSMEs @35% of the cost of Plant & machinery and to large units @10% of the cost of Plant & machinery (maximum amt of Rs. 35.00 lakh) for Implementation of cleaner production technology in place of the existing processes such as substitution & optimization of raw material, reduction in water consumption or energy consumption or waste generation.