MSMEs to get cash, interest assistance

GANDHINAGAR: In the run-up to the Vibrant Gujarat Summit, chief minister Anandiben Patel has announced a spate of special incentives for micro, small and medium enterprises (MSMEs) in the state. In fact, a new incentive scheme for MSMEs has been included in the Industrial Policy-2015 announced by the state government recently.

Under this incentive scheme, cash and assistance on interest incurred on term loans given by banks will be given to MSMEs. Those located within towns and cities will be given 10% of the loan amount (up to a maximum of Rs 15 lakh) as cash incentive while interest assistance will be 5% (up to a maximum of Rs 25 lakh) for five years.

In areas outside towns and cities, cash incentive will be 15% of the loan amount (up to a maximum Rs 25 lakh) and interest assistance will be 7% every year (up to a maximum of Rs 30 lakh) for five years. The state government has also announced that 1% more interest assistance would be given as special encouragement to women, the physically challenged, members of the Scheduled Castes and Tribes and young entrepreneurs

Venture capital boost: The state government will also give MSMEs venture capital assistance. New entrepreneurs who have knowledge of innovative technology but cannot establish an industry due to paucity of capital will be given a loan of Rs 50 lakh under the Capital Assistance Scheme to start their MSMEs.

Credit guarantee: The incentive scheme also provides for payment to banks a guarantee fee for giving an entrepreneur loan of Rs 1 crore without a guarantor. However, this incentive will be available only to entrepreneurs from the Scheduled Castes and Tribes, the physically challenged and to women. Existing MSME units will also get cash assistance and interest assistance for expanding their activities, diversification and modernization. Units in towns and cities will get 10% of the loan amount (up to Rs 15 lakh) as cash assistance. Interest assistance of 5% every year (up to Rs 25 lakh) for five years will be given to MSMEs located in towns and cities.

Gujarat finance and energy minister Saurabh Patel said that the incentives given to MSMEs in the new industrial policy would expedite the development of the beneficiary enterprises. Not only that. The new policy would encourage setting up of new MSMEs in Gujarat.

Of the total MSMEs in the state, 1,76,060 are registered in the manufacturing sector with an estimated investment of Rs 71,105 crore. It is estimated that they provide employment to nearly 18 lakh people, the state’s finance minister said.

SOURCE: The Times of India