HomeBusinessKerala's new draft industrial policy promises huge incentives for MSMEs and non-MSMEs

Kerala’s new draft industrial policy promises huge incentives for MSMEs and non-MSMEs

Key incentives offered include investment subsidy, 100% electricity and stamp duty exemption, and expense reimbursement.

Key incentives offered include investment subsidy, 100% electricity and stamp duty exemption, and expense reimbursement.

of Kerala The new draft industrial policy, to be officially unveiled by Industries Minister P. Rajeev on Thursday, promises a slew of incentives aimed at attracting investments, boosting job creation and promoting entrepreneurship.

The new policy, coming after a gap of four years, focuses on sunrise sectors including artificial intelligence, hi-tech farming, value-added rubber products, medical devices, biotechnology, graphene, electric vehicles and robotics along with the traditional sectors of the state. . ,

Read also: Kerala improves ranking in Ease of Doing Business Index

major incentive

New Draft Industrial Policy of Kerala

New Draft Industrial Policy of Kerala | photo credit: The Hindu

Key incentives proposed include 10% investment subsidy on fixed capital for non-MSMEs, up to ₹10 crore and 100% state GST reimbursement for capital investment for five years for non-MSMEs. Annually, the government will give 50% stipend for 1,000 apprentices, subject to a maximum of ₹5,000 per trainee for six months. Another major incentive would be 100% electricity duty exemption for MSMEs for five years.

Read also: 49,608 MSMEs registered in the state: Minister

As part of efforts to encourage MSMEs to get funds through non-traditional routes instead of credit, 50% of existing and new MSMEs will be allowed to spend on floating public issue through the National Stock Exchange subject to a maximum of ₹1 crore. Expenses will be reimbursed. Bombay Stock Exchange, provided the funds so raised are used for establishing or expanding an enterprise in the State.

Draft policy highlights

10% Investment Subsidy on Fixed Capital for Non-MSMEs (Maximum ₹10 Crore)

100% State GST reimbursement for capital investment for five years for non-MSMEs

100% waiver of electricity duty for MSMEs for five years

50% reimbursement of expenses of new MSMEs (maximum ₹1 crore)

100% exemption in stamp duty and registration fee for setting up of manufacturing units in industrial parks

20% Reimbursement on cost of software including Big Data Analytical tools and machinery in upgrading manufacturing (maximum ₹25 lakh per unit)

Stamp duty and registration fee will be waived up to 100% on lease deed or purchase of land or building for setting up manufacturing unit in government and notified private industrial parks. Equal exemption will be provided for women and SC/ST entrepreneurs to set up manufacturing units anywhere in the state.

The government will also provide 2% interest subvention on term loans taken by priority sector units for fixed capital investment from government financial institutions, for a period of three years from the date of commencement of commercial operations. A waiver of 50% of the land conversion fee as well as complete exemption from payment of additional charges for built up space to be developed on the converted land, will be provided for setting up manufacturing units and logistics parks with a minimum capital investment of ₹100 crore will be excluding cost of land.

Read also: Kerala to set up Graphene Industrial Park: Minister Rajiv

For Exporters and Technological Upgradation

MSME exporters will be reimbursed up to 100% of the stall fee incurred for participating in an international fair or exhibition per year, subject to a maximum of ₹ 5 lakh. 50% of the expenses incurred for mandatory marking such as CE, FDA, ISO and BIS will be refunded, subject to a maximum of ₹25 lakh per unit per year. Reimbursement of 25% of the expenditure incurred for setting up of wastewater treatment plants, rainwater harvesting, zero discharge technologies, recycling of e-waste and recycling of waste water, as part of incentives to follow sustainable practices, civil Subject to a maximum of ₹25 lakh, excluding expenditure incurred for works.

Under the incentive to introduce Industrial Revolution (IR) 4.0 initiatives in the manufacturing process, 20% reimbursement of the cost of software including big data analytical equipment and machinery will be provided subject to a maximum of ₹ 25 lakh per unit. The government estimates direct employment of 10,000 per annum and indirect employment of 30,000 per annum for the policy period. The industrial policy, finalized after public consultation and cabinet review, is expected to be released in February 2023.

Read also: Kerala State Information Technology Infrastructure Limited to encourage setting up of rural BPO/IT operations

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