Jharkhand Draft MSME Policy: Growth, Incentives Galore For Small Businesses

The Jharkhand government has unveiled the draft MSME Policy 2023, proposing a 5 per cent annual interest subsidy for new MSMEs with timely loan repayments from public financial institutions or banks, valid for five years post-commercial production. The maximum subsidy limit stands at INR 25 lakh for micro units, INR 1 crore for small enterprises, and INR 2 crore for medium enterprises.

Furthermore, the policy suggested reimbursing the guarantee fee charged under the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) scheme to Micro and Small Enterprises (MSEs) to enhance collateral-free loan coverage in the state.

To streamline MSME support, the draft proposed a dedicated state-level MSME directorate and a District MSME Centre (DMC) in each district. The directorate will oversee the implementation of state and central MSME schemes, while DMCs will offer services like Udyam registration, single-window clearances, and support for rural and urban MSMEs.

Cluster-Based Development

Initially, existing District Industry Centres (DICs) will transition into DMCs. Presently, Jharkhand hosts over 3.5 lakh MSMEs registered on the Udyam portal, constituting 1.69 per cent of India's 2.08 crore Udyam MSMEs (excluding Udyam Assist Platform registrations).

The draft policy introduced the Jharkhand MSME Special Concession Act 2023, aiming to exempt MSMEs from various approvals and inspections mandated by state laws for enterprise establishment and operation.

Other Incentives Proposed Under The Draft Policy

• Complete reimbursement of stamp duty and registration fees for land directly purchased from raiyats or acquired through consent award, applicable only for the initial transaction on a specific land plot.
• 100 per cent financial support for obtaining quality certification from BIS and internationally recognized institutions, covering expenses up to INR 25 lakh.
• 50 per cent financial assistance for patent registration expenses, with a maximum limit of INR 25 lakh per patent. Initial patent-related costs, including filing fees and attorney fees, can receive up to INR 10 lakh, and up to INR 25 lakh can be granted upon the final acceptance of the patent.
• Complete reimbursement of electricity duty for the first 5 years from the commencement of commercial production.
• Full reimbursement of expenses incurred in obtaining trademark registration, capped at INR 3 lakh.
• New enterprises eligible for one-time financial aid equivalent to 20 per cent of the capital-raising expenditure through SME Exchange, with a maximum limit of INR 10 lakh after successful equity raising as per SME Exchange-approved schemes.
• Financial aid of 75 per cent for implementing ERP solutions and 50 per cent for ICT solutions, with maximum limits of INR 1 lakh and INR 5 lakh, respectively.
• 50 per cent reimbursement of consultancy charges for obtaining green ratings for industrial buildings from the Indian Green Building Council (IGBC), with a maximum financial assistance of INR 4 lakh.

Conclusion

Emphasizing cluster-based development, the government envisions positioning MSMEs on a competitive platform with larger counterparts while preserving their individual business integrity. These measures collectively reflect the state's commitment to fostering the development and growth of the MSME sector in Jharkhand. The draft MSME Policy 2023 becomes a blueprint for other regions aspiring to cultivate a resilient and vibrant small and medium enterprise landscape in the future.