MSME POLICY OF GUJARAT

Gujarat

Gujarat, a vibrant state and even more vibrant economy is forerunner in various developmental factors. So much so that there is even a ‘Gujarat Model of Development’ study in the field of development and urbanization. A state blessed with abundant economic resources and has the distinction of having the longest coastline in India. This has resulted in the state hosting 2 major ports. Also, it is a hotbed for petroleum refineries, future scope of tidal energy and sites of natural gas reserves.  They are one month first few

states in India to have an active participation of private sector investment.

Some salient features of Gujarat Economy:

  • It has the distinction of the few states where the contribution of the manufacturing sector (40%) is significantly high. A successful transformation from agrarian economy into manufacturing hub and gradual succession into services. Gujarat economy’s output of 11-11.5 per cent contributes to 8 – 8.5 per cent of National output in 2001.
  • “Vibrant Gujarat Summit” helps in attracting FDI in large numbers. They are one among the few states like Maharashtra, Tamil Nadu, Andhra and Telangana who attract large numbers of FDI every year.
  • A strong diasporapresence influential groups in important countries such US, UK and Australia. Their contribution is significant in the large amount of money they send back to India.
  • Gujarat finds a top place in a new study but the National Council for Applied Economic Research (NCAER), for Business investment potential.
  • Also, agricultural output is significantly higher than manufacturing states like Tamil Nadu and Maharashtra as they contribute to 12 per cent to Gujarat’s GDSP and supports 53 per cent of its population. Reason for this change is the efficient land reforms carried out.
  • A high tax net enables it to depend less on central movement’sfunds. Its overall tax revenue as a percentage of total tax and revenue is the highest amount the states. With 84% contribution the numbers are huge. Another interesting thing is the grants from center account for less than 30 per cent of outstanding revenue receipts pf Gujarat.
  • An equal importance to welfare measures has been given. They haven’t replaced education and medical with social welfare and security. Also, a strong diary industry and being the epicenter of white revolution the state has been benefiting from the strong diary exports.
  • Another peculiar aspect is the investment on solar energy as the state is been blessed with abundant solar power throughout the year (or at least most part of it.). With 14% of India’s renewable energy Gujarat stands top in the share.
  • Global Prosperity Index 2012 given by Legatum institute which ranks states and countries based on their developmental factors has ranked Gujarat surprisingly as the highest- scoring among various well performing states of India on matters of social welfare. It is a matter of pride that it ranks 15th alongside Germany in the loss of 142 nations worldwide and subsequently ranking higher than several developed nations.

 

MSME as the backbone of Indian Economy:

Industrial MSME sector plays a vital role in the Indian Economy

  • MSMEs contribute around 45% of manufacturing output.
  • They produce about 40% of exports
  • There are an estimated 13 million MSMEs in India.
  • MSMEs employ more than 69 million people directly and indirectly. According to UNIDO classification there are 388 energy intensive SME manufacturing clusters.

#Gujarat’s MSME policy:

MSME Overview

  • Gujarat ranks top in overall integrated MSMEs performance level at Country, this is accepted  as ISED Small Enterprise Observatory (As per 2013 report from MSME, Gujarat).
  • MSME has filled crossing many countries from the 2013 – 2014. Gujarat has received second maximum 16% share in the total set of ownership memorandum.
  • The MSMEs memorandums received by the state has grown by 193 per cent – from about 20,000 in 2009-10 to over an almost fifty thousand in 2013-14
  • Ahmedabad, Rajkot, Surat, Bharuch is the prioritized Multi-Product MSMEs data’s in the level of state.

(SOURCE: Annual /report 2014/15, Ministry of Marco, small and medium enterprises, government of India, ASSOCHAM)

Some salient features of Policy:

  • Identification of 7 areas/ sectors for inviting more investments from MSMES: they are Forest & Environment, Energy, food and health, revenue and urban development, transport and finance industry.
  • 106 activity clusters have been identified across states with various industries such as Plastic Produces, chemical industry engineering textile industry food products, paper products, mineral products and other such industries. Engineering industries occult the maximum clusters with agro and food based industries having less number of clusters.
  • With 63% of MSMEs registered, manufacturing sector has the greatest share in the sector wise distribution of memes in Gujarat. Followed by service activities (13%0, trading activities (19%) and others (5%).
  • Assistance of Capital subsidy: differential loan requirements are satisfied according to their areas with 10 % in municipal corporation areas and 15 % in other areas.
  • Assistance for Interest subsidy: varied interest rates such as 5%, 7% and 1% additional subsidy to certain sections of people and divided according to areas.
  • For promotion of memes in a broader at, the initiatives taken by the state government have and formemefacilitation/ help desks in 4 major cities – Ahmedabad, Vadodara, Surat and Rajkot. The desks provide guidance and help regarding the various schemes and loan facilities available of both state and central government. They also offer assistance in marketinglinkages for industrial step and make sure the channels for availability for assistance on any matter is available to them.

Various government schemes announced:

  • Assistance for Venture capital: to raise promoter contribution in the form of equity r loan.
  • Assistance for quality certification.
  • Assistance for technology acquisition and patent registration.
  • Separate awards to encourage the MSMEs. Encouragement to 100% Export oriented Units (EOU).
  • Emphasis on “Environmental audit and green practices to MSMEs”.
  • Government assistance to Apparels and Textiles Sector under 2013 Policy for textiles.
  • A comprehensive explanation of benefits and assistances under Gujarat Industrial Policy 2015.

With these ground breaking initiatives and superior industry support no wonder the future of MSME consolidation lies in Gujarat

 

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