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Odisha · 2016 · Bare Act

Odisha MSME Development Policy - 2016

Odisha MSME Development
Policy – 2016

Micro, Small & Medium Enterprises Department

Government of Odisha

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Table of Contents

Sl. Subject Page

1 Introduction 1 – 2

2 Objectives 2

3 Strategy 2 -3

4 Enabling Framework 3 – 5

4.1 Ease of Doing Business 3 – 4

4.2 Capacity Building & Skill Development 4

4.3 Cluster Development 4

4.4 Credit Flow to MSME 4 – 5

5 Supporting Framework 5 – 7

5.1 Infrastructure Development 5

5.2 Support for Ancillary & Downstream Enterprises 5 – 6

5.3 Marketing Assistance in MSME Promotion 6

5.4 Export Promotion 6

5.5. Raw Material Support 7

5.6 Technology Up-gradation 7

6 Financial Support Framework 7 – 9

6.1 Capital Investment Subsidy 7 – 8

6.2 Seed Capital Assistance 8

6.3 Project Report Subsidy 8

6.4 Reimbursement of Audit Cost for Water Conservation 8

6.5. Assistance for raising Capital through SME Exchange 8

6.6 Trade Mark Assistance 9

6.7 Reimbursement of Training Expenditure 9

6.8 Award to MSM Enterprises / Entrepreneurs 9

7 Revival of Sick MSMEs 9 – 10

8 Governance 10

9 General Provisions 10 – 11

10 Appendices 12 – 18

Annexure I Definitions 12

Annexure II List of Ineligible Enterprises. 13 – 14

Annexure III Highlights of Industrial Policy Resolution 2015 15 – 17

Annexure IV List of Potential Clusters in Odisha 18

1. Introduction

1.1 Odisha is located strategically contiguous to states of southern, central and

eastern parts of India. It has a rich heritage, a vibrant present and a huge

potential for Micro, Small and Medium Enterprises. State is also a treasure

trove of natural resources. Access to global markets, presence of qualified

human resource, robust infrastructure, stable polity and a positive business

environment make the Odisha a favoured destination for investors.

1.2 Industrialisation is sine qua non of economic progress. Perceptible economic

progress has been achieved because of average annual growth of 5.02% in

manufacturing and service sectors to the Gross State Domestic Production

(GSDP) between 2011-12 and 2015-16. Odisha’s GSDP has increased at a

Compound Annual Growth Rate (CAGR) of 10.23% from Rs.281450 crore to

Rs.330200 crore during this period.

1.3 Cumulative FDI inflows in Odisha during April 2010 to March 2016 stood at

Rs.1027 crore. State Government has announced plans to facilitate growth in

the manufacturing sector with year-on-year increase of 15% till 2020.

1.4 According to Ministry of Commerce and Industry, total exports from Odisha in

2015-16 were valued at Rs.19,746 crore. Value of exports from the state

increased at a CAGR of 2.5% between 2006-07 and 2014-15.

1.5 Odisha is well connected by surface transport, air and water. The State has

extensive rail and road network linking various growth centres. As a measure

to encourage foreign airlines to start service from Odisha, the State

Government has announced zero Value Added Tax on aviation turbine fuel.

1.6 Odisha is a power surplus State with an installed capacity of 5,531.58 MW

with a positive supply~demand gap of 109 MW in 2014-15.

1.7 Odisha ranks high in the country in terms of total value of mineral output.

During 2015-16, total production of minerals in the state was recorded at

239.45 million tonnes. Mineral resources of Odisha constitute formidable

share in national deposits of Chromite-98%, Nickel-93%, Graphite-71%,

Pyrophyllite-65%, Manganese-67%, Bauxite-59%, China Clay-31%, Fire Clay-

25%, Dolomite-18%. Odisha is the fourth largest producer of Coal and the

fifth largest producer of Iron-ore in India.

1.8 Primarily, being an agrarian state, Odisha is endowed with huge allied

resources like animal husbandry, fishery, forest produces, etc. The vast coast-

line of 480 km provides ample scope for marine as well as coir produce.

1.9 Odisha is the home to some of the leading public sector enterprises like HAL,

RSP, IRE, MCL, NALCO, NTPC, NINL, PPT, IOCL, Ordinance Factory and

private companies like Tata Steel, Vedanta Aluminium, Aditya Birla, Jindal

Steel, etc. Existence of these large industries offers a huge opportunity for

establishment of Ancillary and Downstream MSMEs.

1.10 The State has notified Industrial Policy Resolution, 2015, which lays down

policy framework and fiscal incentives for industries including MSMEs.

However, MSME sector suffers from intrinsic disadvantages in availing priority

in infrastructure, credit linkages, marketing and needs extra support

especially in industrially backward districts. With a view to provide a

conducive eco-system for promoting growth of MSMEs in a focussed manner,

commensurate with the present scenario and anticipated future, the State is

declaring “Odisha MSME Development Policy, 2016.”

1.11 Odisha MSME Development Policy, 2016 has been formulated through a

consultative process involving stake-holders including Industry Associations,

Financial Institutions, Experts and Government Departments concerned.

2. Objectives

The objectives of the policy are to:

a) Encourage new manufacturing capacity based on improved

competitiveness.

b) Provide a conducive eco-system for promotion and growth of MSMEs in

potential sectors.

c) Provide opportunities to local entrepreneurial talent.

d) Maximize avenues of employment generation for the youth.

e) Facilitate MSMEs in accessing domestic and export markets.

f) Make concerted efforts for revival of sick enterprises.

g) Make focussed efforts for sustainable, inclusive & balanced growth.

3. Strategy

3.1 To achieve the objectives of this Policy, the following strategy is proposed:

a) Setting up of Facilitation Cells at all Regional Industries Centres (RICs) /

District Industries Centres (DICs) and strengthening of RICs / DICs.

b) Development of MSME Parks in districts to provide ready infrastructure for

establishment of MSMEs and to promote balanced growth across regions.

c) Development of product-specific clusters namely, cashew, engineering,

rice based products, pharmaceutical, plastic & polymer, readymade

garments, agro & food processing, stone wares, etc.

d) Convergence of schemes and resources of state with and leveraging of

Government of India schemes and resources.

e) Suitable incentive packages for promotion and growth of MSMEs especially

in industrially backward districts including KBK districts.

f) Facilitate setting up of Ancillary & Downstream enterprises of the existing

and upcoming Large Industries & Public Sector Undertakings.

g) Enhance flow of credit to MSMEs by encouraging banks / financial

institutions through dedicated MSME branches.

h) Establish MSME ~ Institution linkages for creation of awareness, imparting

entrepreneurial education through empanelled Institutes & setting up of

Livelihood Business Incubators (LBIs) / Technology Business Incubators.

i) Strengthen MSME ~ Academia interface for skill development, product /

process development, R&D and innovations.

j) Thrust on revival of sick MSMEs including prevention of sickness.

k) Encourage product branding “Made in Odisha” for global recognition.

l) Organize road shows, awareness programme and investors’ meet

extensively inside the country and at strategic locations overseas.

3.2 The Policy takes cognizance of 'Ease of Doing Business' initiatives and the

relevant extant Policies of both the State Government & Government of India

and aims to make Odisha - a destination of choice for MSMEs. Accordingly,

the Policy has been divided into three parts, viz. an Enabling Framework,

Supporting Framework and Incentive Framework.

4. Enabling Framework

4.1. Ease of Doing Business

4.1.1 RICs / DICs shall be the nodal agency for development of MSMEs in the state.

They shall assist and handhold investors in setting up business and

coordinating requisite approvals and clearances before, during and after

project implementation.

4.1.2 All relevant schemes / assistance enunciated in the extant Policies of State

Government and Government of India shall be dovetailed at RIC / DIC level to

enable investors to take advantage as per their eligibility.

4.1.3 In order to accelerate promotion & growth in MSME sector, MSME

Department shall organize Road Shows / Investors’ Meets at strategic

locations inside the country as well as overseas. RICs / DICs shall similarly

organize Awareness Programmes within their districts.

4.1.4 Facilitation Cells shall be set up at State Level / RICs / DICs manned by

professionals / technical experts to support entrepreneurs / investors.

4.1.5 An on line mechanism for administration of incentives in a time bound manner

will be implemented to ensure timely sanction and release of incentives.

4.1.6 An online platform shall be set up for redressal of grievances of MSM

entrepreneurs and investors.

4.1.7 A Central Inspection Co-ordination Group (CICG) has been put in place to

simplify business regulations and bring in transparency in inspections.

4.1.8 A State MSME Board in line with National Board for Micro, Small & Medium

Enterprises shall be constituted as advisory for development of MSMEs.

4.2 Capacity Building & Skill Development

4.2.1 The MSME Department shall strive to maximize Industry ~ Institution linkage

by entrepreneurial education through empanelled Project Institutes such as

Institutes of Higher learning, ITIs, Entrepreneurship Development Centres

under the National Scheme on Entrepreneurship Development.

4.2.2 The Technical Institutions / Project Implementing Agencies shall be

encouraged through Director, Technical Education & Training / Director,

Employment to assist MSMEs / MSME Associations in skill development,

product / process development, research & innovation.

4.3. Cluster Development

4.3.1 Often MSMEs are of smaller in size and have limitation in achieving economy

of scale, negotiation, specialization, access to strategic information, which

restrict them in achieving the expected level of business. Cluster approach

envisages overcoming such limitations and maximising their opportunities.

4.3.2 Based on concentration of industrial activities, initially a list of 54 potential

clusters (Annexure IV) has been identified for interventions.

4.3.3 Cluster Development Cell of the Directorate of Industries will be strengthened.

4.3.4 Induced clusters of Ancillary / Downstream / other enterprises shall be

promoted at industrial hubs viz. Kalinganagar, Paradeep, Dhamra, Gopalpur,

Angul, Dhenkanal, Sambalpur, Jharsuguda, Rayagada and Keonjhar.

4.3.5 Special Purpose Vehicle (SPV) formed by MSMEs for the purpose of cluster

development and development of common facilities / infrastructure shall be

eligible for gap-funding support, after availing CFC grants from Government

of India Schemes.

4.4. Credit Flow to MSMEs

4.4.1 An Empowered Committee under the Chairmanship of Principal Secretary,

MSME as per composition indicated in para 7.4 of this policy shall monitor

credit flow to MSME sector especially in schemes viz. Prime Minister

Employment Generation Programme (PMEGP), Pradhan Mantri Mudra Yojana

(PMMY), Credit Linked Capital Subsidy Scheme (CLCSS) and coverage under

Credit Guarantee Fund Trust for Micro & Small Enterprises.

4.4.2 Government shall encourage opening of MSME dedicated bank-branch in

industrial estates / industrial hubs / MSME Parks. Government land for such

branches, if required can be provided at concessional industrial rate.

4.4.3 The MSMEs shall be encouraged to obtain credit ratings from reputed rating

agencies for facilitation of credit.

5. Supporting Framework

5.1. Infrastructure Development

5.1.1 MSME Parks shall be established in districts depending upon potential and

demand. OSIC will be strengthened to act as implementing agency for the

MSME parks. Private developers shall also be encouraged for establishment of

such MSME parks.

5.1.2 Expansion of the existing industrial estates managed by IDCO shall be taken

up basing on demand for land and availability.

5.1.3 Capital Grant to support quality infrastructure and other incentives related to

infrastructure development can be availed under IPR, 2015 for development

of MSME parks.

5.1.4 10% of the land for large projects subject to an upper limit of 300 Acres shall

be earmarked (by the concerned large industry) for setting up of Ancillary and

Downstream Industrial Park (Ref: para 5.4.1 (d) of IPR, 2015).

5.2. Support for Ancillary and Downstream Enterprises

5.2.1 Facilitate linkage between potential entrepreneurs and large industries for

development of ancillary and downstream enterprises.

5.2.2 Facilitate easy availability of product(s) / by product(s) / waste generated by

the mother industries to the MSM Entrepreneurs for further value addition.

5.2.3 Land for ancillary & downstream enterprises in industrial estates / MSME

parks shall be allotted on priority basis.

5.2.4 Plant Level Consultative Committee for large industries in private sector shall

be constituted with District Collector as Chairman and all other concerned

officers as member for development of ancillary and downstream enterprises.

5.2.5 Plant Level Advisory Committee (PLAC) of CPSUs shall be activated. Similarly,

PLAC for major state PSUs shall be put in place.

5.2.6 Focussed Study for development of ancillary & downstream enterprises shall

be undertaken.

5.2.7 An “Ancillary & Downstream Enterprise Cell” shall be set up in the Directorate

of Industries, Odisha with engagement of requisite professionals.

5.3. Marketing Assistance

5.3.1 A web portal namely “MSME e-Bazaar” shall be developed to provide a

platform to entrepreneurs to showcase their products and directly connect to

buyers. The portal shall promote product branding “Made in Odisha” for

global recognition.

5.3.2 MSME State Trade Fair shall be organised by Odisha Small Industries

Corporation Ltd. with support from Directorate of Export Promotion &

Marketing. RICs / DICs shall conduct MSME exhibitions at district level.

5.3.3 Mandatory procurement preference from Micro and Small Enterprises shall be

governed as per provisions under The Odisha Procurement Preference Policy

for Micro & Small Enterprises, 2015 (details may be seen at www.msmeodisha.gov.in).

5.3.4 Directorate of Export Promotion & Marketing will be the Nodal Agency for

implementation of all marketing facilities extended to local MSMEs.

5.3.5 Government Departments and Agencies under their control shall procure

product(s) from MSEs located within the State as per provisions of “The

Odisha Procurement Preference Policy for Micro & Small Enterprises, 2015”.

5.3.6 The Directorate of Industries and OSIC in collaboration with MSME-DI shall

organize annual Buyer & Seller Meet and Vendor Development Programmes in

respect of each large industry, CPSU and major State PSUs.

5.3.7 Local Micro & Small Enterprises shall be exempted from payment of earnest

money and shall pay 25% of the prescribed security deposit while

participating in tenders of Government Departments & Agencies there under.

5.4. Export Promotion

5.4.1 In order to enhance the export potential of the MSMEs of the State, Odisha

Export Policy, 2014 is already in operation. The Directorate of EP&M shall

prepare and update a product-country matrix for the MSMEs of Odisha clearly

identifying the products, which have potential export market overseas.

5.4.2 The MSME e-Bazaar portal shall be developed by Directorate of Industries and

maintained by Director, EP&M. The Portal shall be utilized for hosting

catalogue of products of local MSMEs having export potential.

5.5. Raw Material Support

5.5.1 The Odisha Small Industries Corporation Ltd. (OSIC) shall act as the Nodal

Agency for sourcing and supplying of raw material required by MSMEs /

Industrial parks and cluster parks in the state. OSIC / NSIC shall set up Raw

Material Bank(s) to provide such support.

5.5.2 OSIC may also set up Raw Material Bank(s) in PPP mode in collaboration with

local industry / industry associations in order to meet the requirement of raw

material of MSMEs wherever it is required to do so.

5.5.3 In order to promote Fly Ash product manufacturing units in non-fly ash

generating areas, OSIC may take steps for supply of Fly Ash to such MSMEs.

5.5.4 The CPSUs, state PSUs and large industries shall accord priority in supplying

raw material to OSIC being the Nodal Agency for MSMEs at the lowest

possible rate extended to any other buyer for the same material.

5.6. Technology Up-gradation

5.6.1 MSMEs shall be encouraged to undertake interventions to enhance their

competitiveness with respect to quality, productivity, reduction in cost, etc. by

up-gradation of technology and adoption of new technology for quality

enhancement and environment friendly production.

5.6.2 Directorate of Industries in association with MSME-DI shall increase

awareness of schemes of Government of India for incentivizing adoption of

cutting edge technology by MSMEs such as CLCSS (Credit Linked Capital

Subsidy Scheme), QMS (Quality Management Standards), QTT (Quality

Technology Tools). The progress of credit delivery under such schemes shall

be closely monitored by Director of Industries, Odisha.

6. Financial Support Framework

6.1. Capital Investment Subsidy

Sl.
No.

Category of Enterprise

Quantum of Assistance

New Micro & Small
Enterprises

@ 25% of capital investment made
in Plant & Machinery subject to
an upper limit of Rs.1 crore only.

New Micro & Small
Enterprises owned by SC, ST,
Differently abled, Women &
Technical (Degree / Diploma)
entrepreneur.

@ 30% of capital investment made
in Plant & Machinery subject to
an upper limit of Rs.1.25 crore
only.

Sl.
No.

Category of Enterprise

Quantum of Assistance

New Micro & Small
Enterprises set up in
industrially backward districts
including KBK districts.

Additional capital investment subsidy
@ 5% of investment made in Plant
& Machinery with an upper limit
prescribed at sl.1 & 2 above as
applicable.

New Micro & Small
Enterprises engaged in
recycling of E-waste, Hospital
waste, Construction &
demolition waste.

Additional capital investment subsidy
@ 5% of capital investment made in
Plant & Machinery subject to an
upper limit of Rs.10 lakh over and
above the limits specified as above.

Note: For the enterprises set up by SC / ST / Differently Abled / Women / Technical Degree

or Diploma holders, their stake in equity participation / shareholding shall be 51% or

more individually or jointly.

6.2. Seed Capital Assistance

The 1st generation Women, SC, ST, Differently abled entrepreneurs setting up

new Micro / Small Enterprise in Industrially Backward Districts including KBK

districts shall be entitled to a one time grant equivalent to 10% of Term Loan

disbursed by the financing bank / institution subject to a maximum of

Rs.15 lakh.

6.3. Project Report Subsidy

New Micro enterprises shall be entitled to a one time grant up to Rs.50,000/-

or 2% of the project cost, whichever is lower for preparation of the detailed

feasibility report / detailed project report, which will facilitate the

entrepreneur to access finance from Banks / financial institutions. The said

amount will be disbursed after sanction and disbursement of the first

instalment of term loan by bank / Financial Institution to the Micro enterprise.

6.4. Reimbursement of Audit Cost for Water Conservation

To encourage water conservation, a onetime reimbursement of 50% of audit

cost by approved agencies limiting to Rs.25,000/- shall be provided to new

MSMEs undertaking water conservation measures.

6.5. Assistance for raising Capital through SME Exchange

New Small & Medium Enterprises shall be entitled for one time grant @20%

of expenditure incurred for raising of capital through SME Exchange subject to

a maximum amount of Rs.10 lakh after successful raising of equity as per the

scheme approved by SME Exchange.

6.6. Trade Mark Assistance

New MSMEs shall be entitled for reimbursement of 50% of expenditure

incurred in obtaining Trade Mark subject to maximum of Rs.25,000/-.

6.7. Reimbursement of Training Expenditure

Government will reimburse 50% of the cost of skill up-gradation and training

of local manpower limited to Rs.3000/- per person for a maximum of 10

persons in Micro and 20 persons in Small and Medium Enterprises. Thrust will

be given on skill development of women to enhance their employability and

for that purpose an additional training cost of Rs.1000/- shall be reimbursed

per woman. This support shall not be available to those employee trainees

who are availing benefit under other skill development programmes of the

Government. The Skill up-gradation training of local man power shall be

supported in consultation with Skill Development & Technical Education

Department / Odisha Skill Development Authority.

6.8. Award to MSM Enterprises / Entrepreneurs

In order to encourage competition and efficiency amongst MSM enterprises,

annual State Awards shall be given to best MSM enterprises / entrepreneurs

in recognition of their contribution in terms of achieving highest turnover,

highest employment, adoption of environment friendly & innovative

technology, registration of patent, etc. for each category of Micro, Small and

Medium enterprise.

7. Revival of Sick MSMEs

7.1 The Micro & Small enterprises are prone to sickness due to various reasons.

Reserve Bank of India has notified a framework for revival and rehabilitation

of sick MSMEs vide their circular RBI/2015-16/338 dt.17.3.2016.

7.2 State Government shall closely monitor implementation of the frame work for

identification, nursing and providing rehabilitation package to potentially

viable sick units of the state under the frame work.

7.3 The identified viable sick MSMEs shall be assisted at par with new industrial

units for assistance / incentives admissible under this policy.

7.4 An Empowered Committee under the Chairmanship of Principal Secretary /

Secretary, MSME shall monitor credit flow to MSMEs including potentially

viable sick units quarterly. The Committee shall comprise of the following:

i. Principal Secretary / Secretary, MSME Department Chairman.

ii. Director, Institutional Finance, Government of Odisha Member

iii. Regional Director, RBI, Bhubaneswar Member

iv. Convenor, State Level Bankers Committee Odisha Member

v. General Manager, SIDBI, Bhubaneswar Member

vi. Regional Heads of all Commercial / Rural Banks Member

vii. Managing Director, OSFC Member

viii. Director, MSME DI, Government of India, Cuttack Member

ix. Representative of two State Level Industries

Association (to be rotated bi-annually)

Member

x. Director of Industries, Odisha Member-Convenor

Any other member as per requirement may be co-opted by the Chairman.

8. Governance

 Implementation of provisions of this policy shall be periodically monitored and

reviewed by a High Level Committee to be constituted under the Chairmanship

of Chief Secretary for mid-course correction / amendments, if any.

 Incentives / claims under this Policy shall be considered and approved by the

following Committees to be constituted by MSME Department:

Sl. Name of the Committee Category of Enterprise

1 District Level Committee (DLC) under the

Chairmanship of General Manager, RIC / DIC

Micro Enterprises

2 State Directorate Level Committee (SDLC) under

the Chairmanship of Director of Industries,

Odisha

Small & Medium

Enterprises

9. General Provisions

9.1 This Policy and other extant Policies provide fiscal & non-fiscal incentives for

MSMEs. Entrepreneur can choose to avail a particular incentive according to

his / her eligibility.

9.2 Incentives as envisaged in this policy shall not be applicable to an enterprise

if the similar incentives are availed under any other policies of State

Government or Government of India.

9.3 New MSME for availing incentives under this policy shall be acknowledged

with Entrepreneurship Identification Number and / or Production Certificate

and commencing production within a period of three years from the date of

starting of first fixed capital investment.

9.4 Government may consider condonation of delay (beyond the stipulated period

of 3 years) in implementation of projects due to force majeure (reasons like

natural calamities) on cases to case basis on recommendation of an

Empowered Committee to be constituted under the Chairmanship of Principal

Secretary to Government, MSME Department.

9.5 New MSME shall become ineligible to get incentives if it does not file its claim

complete in all respects within 1 (one) year of its commencement of

production or within the time limit prescribed in the Operational Guidelines of

respective incentives.

9.6 This Policy shall be effective from the date of its notification and remain in

force until substituted by another policy.

9.7 MSMEs which have commenced fixed capital investment prior to notification

of this Policy shall continue to be governed and assisted under Odisha MSMED

Policy, 2009.

9.8 For definitions of all the terms used in the policy, Annexure I be referred.

9.9 Doubts relating to interpretation of any term and / or dispute relating to the

operation of any provision under this policy shall have to be referred to the

MSME Department, Government of Odisha for clarification / resolution.

Decision of Government shall be final and binding on all concerned.

9.10 The list of ineligible MSMEs for incentives in respect of this policy is given at

Annexure II.

9.11 No right or claim for any incentive under this policy shall be deemed to have

been conferred merely on the ground of provision in this policy.

9.12 Implementation of various provisions covering the incentives, concessions etc.

will be subject to notification of detailed guidelines / statutory notifications by

MSME / concerned Administrative Department.

9.13 An indicative list of the fiscal incentives provided in IPR-2015 is given at

Annexure III. Details of policy & its Operational Guidelines is available in

www.msmeodisha.gov.in and http://diodisha.nic.in

9.14 The list of potential clusters is given at Annexure IV.

* * * *

Annexure I

DEFINITIONS

For the purpose of this Policy, the various terms shall have the meanings assigned to them
here under:

1) “Ancillary Enterprise” means an Industrial undertaking which is engaged or is
proposed to be engaged in manufacturing or production of parts, components, sub-
assemblies, tooling or intermediates or rendering of services and the undertaking
supplies or renders or proposes to supply or render not less than 50% of its production
or services as the case may be, to one or more other industrial undertakings within the
state.

2) “CST” means Central Sales Tax as defined under the provisions of Central Sales Tax
Act, 1956.

3) “Downstream Enterprise” means an Industrial undertaking, which is engaged or
proposed to be engaged in value addition of the intermediate or final produce or waste
product of one or more industrial undertakings within the state utilizing a minimum of
50% by weight as base raw material.

4) “Fixed Capital Investment” means investment in land, building, plant, machinery
and balancing equipment.

5) "IDCO" means the Odisha Industrial Infrastructure Development Corporation.

6) "IDCO Land" means land allotted to and land acquired by IDCO.

7) “Industrial Unit” means any industrial undertaking located inside the State and
engaged in any manufacturing activity.

8) Industrially Backward Districts includes Kalahandi, Nuapada, Bolangir, Subarnpur,
Koraput, Malkangiri, Rayagada, Nabarangpur, Kandhamal, Gajapati & Mayurbhanj.

9) “IPR” means Industrial Policy Resolution - 2015.

10) “Local Micro, Small & Medium Enterprises” means Micro, Small and Medium
Enterprises situated in the State of Odisha.

11) “Micro, Small & Medium Enterprise” means an Industrial Unit / Enterprise as
defined by the Government of India in MSMED Act, 2006 amended from time to time.

12) MSME-DI" means MSME Development Institute.

13) “New MSME” means a Micro, Small & Medium Enterprise where fixed capital
investment (including the one who has existing land) has commenced on or after the
effective date and goes into production within three years from the date of starting of
first fixed capital investment.

14) "NSIC" means the National Small Industries Corporation.

15) “OSIC” means the Odisha Small Industries Corporation Ltd.

16) “PMEGP” means Prime Minister’s Employment Generation Programme.

17) “Raw Material” means material required by an enterprise that will directly go into the
composition / manufacturing of its finished products.

18) “RIC” means Regional Industries Centre and “DIC” means District Industries Centre.

19) “SIDBI” means the Small Industrial Development Bank of India.

20) “VAT” means value added tax as defined under the provisions of The Orissa Value
Added Tax Act, 2004‘ & Orissa Value Added Tax Rules, 2005.

21) “Year” for the purpose of incentives means a period of 365 consecutive days.

* * * *

Appendices

Annexure II

LIST OF INELIGIBLE ENTERPRISES

Enterprises ineligible for fiscal incentives specified under this Policy

01 All Service enterprises.

02 Hullers and Rice mills with investment in plant & machinery of less than Rs.25 lakhs
for industrially backward districts and less than Rs.1 crore for other areas.

03 Flour mills including manufacture of besan, pulse mills and chuda mills except
investment in plant & machinery of less than Rs.25 lakhs for industrially backward
districts and less than Rs.1 crore for other areas (excluding Roller Flour Mills).

04 (a) Processing of spices with investment in plant & machinery with less than Rs.10
lakh for industrially backward districts and less than Rs.2 crore for other areas.

(b) Units without Spice-mark or Ag-mark.

05 Confectionary with investment in plant & machinery with less than Rs.10 lakh for
industrially backward districts and less than two crore rupees for other areas.

06 Oil mills with expellers including oil processing, filtering, decolouring, colouring,
refining of edible oils and hydrogenation thereof except investment in plant &
machinery more than Rs.10 lakh in industrially backward districts.

07 Preparation of sweets and savouries except investment in plant & machinery of less
than Rs10 lakhs for industrially backward districts and less that Rs.50 lakh for other
area.

08 Bread-making (excluding mechanised bakery).

09 Mixture, Bhujia and Chanachur preparation units.

10 Manufacture of Ice candy.

11 Manufacture and processing of betel nuts.

12 Hatcheries, Piggeries, Rabbit or Broiler farming.

13 Standalone Sponge Iron Plants.

14 "Iron and Steel Processors" such as cutting of sheets, bars, angles, coils, M.S.
sheets, recoiling, straightening, corrugating, drop hammer units, etc. with low value
addition.

15 Cracker-making units.

16 Tyre retreading units with investment in plant and machinery of less than Rs.20 lakh.

17 Stone crushing units.

18 Coal / Coke screening, coal washing, Coal / Coke Briquetting.

19 Production of firewood and charcoal.

20 Painting and spray-painting units with investment in plant and machinery of less than
Rs.20 lakh.

21 Units for physical mixing of fertilizers.

22 Brick-making units (except units making refractory bricks and those making bricks
from fly ash, red mud and similar industrial waste not less than 25% as base
material).

23 Manufacturing of tarpaulin out of canvas cloth with investment in plant and
machinery of less than Rs. 20 lakh.

24 Saw mill, sawing of timber.

25 Carpentry, joinery and wooden furniture making except when part of a Wood based
cluster of at least 20 units.

26 Drilling rigs, Bore-wells and Tube-wells.

27 Units for mixing or blending / packaging of tea.

28 Units for cutting raw tobacco and sprinkling jaggery for chewing purposes and
Gudakhu manufacturing units.

29 Units for bottling of medicines.

30 Bookbinding / Rubber stamp making / Making notebooks, exercise notebooks and
envelopes.

31 Distilled water units.

32 Tailoring (other than readymade garment manufacturing units).

33 Repacking / stitching / printing of woven sacks out of woven fabrics.

34 Pre-processing of oil seeds- decorticating, expelling, crushing, parching and frying.

35 Aerated water and soft drink units.

36 Bottling units or any activity in respect of IMFL or liquor of any kind.

37 Size reducing / size separating units / Grinding / mixing units with investment in
plant & machinery of less than ten crore rupees except manufacturing of Cement
with clinker.

38 Polythene less than 40 micron in thickness / recycling of Plastic materials

39 Thermal Power Plant.

40 Re-packaging Units.

Note: List of Enterprises indicated above may be modified by the Government from time to
time.

* * * *

Annexure III

HIGHLIGHTS OF FISCAL INCENTIVES FOR MSMEs IN INDUSTRIAL POLICY
RESOLUTION – 2015*

1. LAND AT CONCESSIONAL RATE

 Ground rent @1% of the land value.
 10% of the land for large projects limiting to 300 Acre shall be earmarked for

Ancillary & Downstream industrial Park.

2. EXEMPTIION OF PREMIUM ON CONVERSION OF Ag. LAND FOR INDUSTRIAL USE

 New Industrial units and existing industrial units taking up E/M/D.

Micro & Small Sector 100% up to 5 Acres

Medium Sector 75% up to 25 Acres

Priority Sector 100% up to 100 Acres & 50 % for balance Area

3. INTEREST SUBSIDY

 New MSME @ 5% per annum on term loan for Five years and same for Seven years
for Industrially Backward Districts limiting to:

Micro Enterprise Rs.10 lakh

Small Enterprise Rs.20 lakh

Medium Enterprise Rs.40 lakh

 One time Guarantee fee charged under CGTMSE will be reimbursed to MSEs

4. STAMP DUTY EXEMPTION

 No stamp duty for land allotted by the Government to IDCO or Govt /IDCO to Private
Industrial Estate Developers

Transfer of land/shed by Govt / IDCO/Private
Industrial Estate Developers to new units and
existing units acquiring fresh land for E / M / D

Micro & Small Sector 75% of Stamp duty

Medium Sector 50% of Stamp duty

Priority Sector 100% of Stamp duty

Stamp Duty exemption on transfer of management/ conversion to Company/ reconstruction
& amalgamation of Companies /execution of loan deed / credit deed / hypothecation deeds

5. ELECTRICAL ENERGY SUBSIDY

A Exemption of
Electricity Duty for
5 years

New MSMEs up to Contract demand of 500 KVA

New units in the Priority Sector up to Contract demand of 5 MVA

New & existing industrial units setting up Captive Power Plant with non-
conventional sources & bio-fuel as Green Energy Subsidy.

B Seasonal Units such as food processing, sugar, salt and cotton ginning & pressing unit shall
be allowed for temporary surrender of a part of their contract demand as per norms of OERC.

C One-time reimbursement of cost of Energy Audits for achieving energy efficiency up to -

Micro Enterprise-Rs.1 lakh Small Enterprise- Rs.2 lakh Medium Enterprise-Rs.3 Lakh

6. VAT REIMBURSEMENT – in a tapered manner

New MSMEs 75% of net VAT paid for 5 years Limited to 100% of cost of
Plant & M/c

New units in Priority
Sector

100% of net VAT paid for 7 years Limited to 200% of cost of
Plant & M/c

Existing MSMEs taking up 75% of net VAT paid on increased Limited to 100% of additional

E / M / D production for 5 years cost of plant & M/c for E /M / D

Existing units in Priority
sector taking up E/ M / D

100% of net VAT paid on
increased production for 7 years

Limited to 200% of additional
cost of Plant & M/c for E /M / D

New Pioneer Units 100% of net VAT paid for 9 years Limited to 200% of cost of
Plant & M/c

Anchor Tenant in
Industrial park

100% of net VAT paid for 9 years Limited to 200% of cost of
Plant & M/c

Above provision will be suitably replaced / modified after GST is introduced

7. REIMBURSEMENT OF ENTRY TAX

Plant &
Machinery

New MSMEs & Priority Sector
units

100% of Entry Tax paid on plant & M/c

Existing MSMEs & Priority Sector
units taking up E/M/D

100% of Entry Tax paid on additional plant &
M/c.

Raw Material

New MSMEs & Priority Sector
units

100% of Entry Tax paid for 5 years limited
to 100% of cost of Plant & M/c

Existing MSMEs & Priority Sector
units taking up E/ M/ D

100% of Entry Tax paid on additional raw
materials for 5 years limited to 100% of cost
of additional Plant and machinery.

New Pioneer Units under each
Priority Sector

100% of Entry Tax paid for 7 years limited to
100% of cost of plant & M/c

Above provision will be suitably replaced / modified after GST is introduced

8. REIMBURSEMENT OF ENTERTAINMENT TAX (ET)

i New Multiplex Cinema Hall of at least 3 screens with minimum
capital investment of Rs.3.00 crores

100% of ET paid for 5
years

ii Existing cinema hall upgraded to a multiplex and modernised
with minimum investment of rupees one crore

100% ET paid for 5 years

The above provision will be suitably replaced/ modified after GST is introduced

9. EMPLOYMENT COST SUBSIDY- for employing skilled & semi-skilled workers of domicile of
Odisha as regular employees.

New & existing units taking up
E/M/D in Micro & Small Sector

Male workers- 75% of ESI & EPF contribution for 5 years

Female workers-100% of ESI & EPF contribution for 5 years

New and existing units taking up
E/M/D in Medium sector

Male workers-50% of ESI & EPF contribution for 3 years

Female workers-100% of ESI & EPF contribution for 3 years

New and existing units taking up E/M/D in MSME and Priority
Sector–displaced for the establishment of the said Industrial unit

100% of ESI & EPF
contribution for 3 years

New and existing Industrial units undertaking E/M/D in MSME
and Priority Sector- with Disabilities

100% of ESI & EPF
contribution for 5 years

Employment Cost Subsidy -for additional period of 2 year for Industrially Backward Districts.

10. PATENT REGISTRATION

New units and Existing units in MSME & Priority Sector
taking up Expansion/ Modernization/ Diversification

100% of the registration cost limited
to Rs.10 lakh

11. QUALITY CERTIFICATION- & its renewal for next consecutive two years

New and Existing units in MSME & Priority Sector taking
up E/ M/ D

100% of quality certification charges
limited to Rs.3 Lakh.

12. ASSISTANCE FOR TECHNICAL KNOW-HOW

New units in MSME & Priority sector Indigenous tech. 100% of cost up to Rs.1 Lakh

Imported tech. 100% of cost up to Rs.5 Lakh

13. ENTERPRENEURSHIP DEVELOPMENT SUBSIDY

75% of course fee limited to Rs.50,000/- per course to budding entrepreneurs to undergo
Management Development Training in reputed national level institution.

14. ENVIRONMENTAL PROTECTION INFRASTRUCTURE SUBSIDY

Rs.20 lakh or 20% of capital cost whichever is less for adopting Zero Effluent / ZLD &
setting – up Effluent Treatment Plant by MSMEs.

15. CAPITAL GRANT TO SUPPORT QUALITY INFRASTRUCTURE

Industrial parks/ Cluster parks promoted by private
sector/Ind. Association/User Units in cluster format

50% of the infrastructure cost up-to
Rs.10 crore /park or cluster

Up-gradation of the existing parks/ clusters provided the
park/ estate/ cluster is User- managed

50% of total cost up-to Rs.5 crore

16. ANCHOR TENANT SUBSIDY

 25% subsidy on cost of land.
 VAT Reimbursement for additional 2 years subject to the overall limit.

17. MARKETING ASSISTANCE TO INDUSTRIES ASSOCIATIONS

 Assistance @ 50% of total rent limiting to Rs.10 lakh for participation of minimum 5
units in Odisha Pavilion in International Trade fairs abroad.

18. FILM INDUSTRY

 All feature films produced fully or partly in Odisha exempted from Entertainment Tax.
 Producers of films utilize Kalinga Studio Limited, Film &Television Institute of Odisha

and Kalinga Prasad Colour Laboratory shall avail incentives as per terms and conditions
of OFDC.

 Soft loan assistance at a nominal rate of interest decided by OFDC.
 Multiplexes/Cinema Halls shall get Government land/IDCO land at concessional

industrial rate.

19. Non–Mineral based new industrial units in industrially backward districts with investment
of Rs.5.00 crore in Plant & M/c treated as Priority Sector unit & eligible for all incentives
of Priority sector.

* For details, entrepreneurs should visit the IPR, 2015 and its Operational Guidelines available at

www.msmeodisha.gov.in and http://diodisha.nic.in

* * * *

Annexure IV
LIST OF POTENTIAL CLUSTERS

Sl. Name of RIC
/ DIC

Name of the Product / Process Sl. Name of RIC /
DIC

Name of the Product /
Process

1 Angul Engineering Cluster 28 Ganjam Kewda processing units

2 Angul Fly Ash Cluster at Talmul 29 Ganjam Cashew processing

3 Balasore Plastic & Polymer based 30 Ganjam Granite Processing Cluster

4 Balasore NTFP Cluster (Leaf Cup & Plate
manufacturing)

31 Ganjam Rice Milling Cluster

5 Balasore Rice Milling Cluster 32 Ganjam Ayurvedic Cluster

6 Baragarh Rice Milling cluster 33 Jagatsingpur Dry Fish Cluster

7 Bhadrak Rice Milling Cluster 34 Jharsuguda Engineering

8 Bhubaneswar Engineering & Tools 35 Kalahandi Rice Milling Cluster

9 Bhubaneswar Brass & Bell Metal 36 Kalinganagar Groundnut Processing

10 Bhubaneswar Plastic & Polymer based 37 Kalinganagar Rice Milling Cluster

11 Bhubaneswar Stabilizer, UPS & Invertor Cluster,
Bhubaneswar

38 Keonjhar Engineering Cluster

12 Bhubaneswar Auto service cluster at
Bhubaneswar

39 Koraput Cashew Processing

13 Bhubaneswar Pahal Rasogolla Cluster 40 Koraput Engineering

14 Bolangir Rice mill 41 Koraput Rice Milling cluster

15 Boudh Rice Milling Cluster 42 Mayurbhanj NTFP Cluster (Leaf Cup & Plate
mfg.)

16 Cuttack Pharmaceuticals at Cuttack &
Bhubaneswar

43 Mayurbhanj Engineering & fabrication
Cluster

17 Cuttack Engineering & Tools 44 Nawrangpur Rice milling cluster

18 Cuttack Readymade Garments, Gobindpur 45 Nayagarh Brass & Bell Metal products at
Khandapada

19 Cuttack Spices Cluster 46 Nuapada Rice milling cluster

20 Cuttack Readymade Garment Cluster,
Cuttack

47 Phulbani Spice (Turmeric) Processing

21 Deogarh NTFP Cluster (Leaf Cup & Plate
manufacturing)

48 Puri Cashew Processing Cluster

22 Dhenkanal Power loom 49 Puri Pipili Applique Cluster

23 Dhenkanal Fly Ash Bricks manufacturing
Cluster

50 Puri Coir cluster

24 Dhenkanal Readymade Garment Cluster
(Baulapur)

51 Rayagada Rice Mill Cluster

25 Dhenkanal Engineering Cluster 52 Rayagada Engineering Cluster

26 Dhenkanal Brass & Bell metal cluster at
Indipur

53 Rourkela General Engineering

27 Gajapati Cashew processing 54 Sambalpur Rice Milling cluster

* * * *