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Uttarakhand government to unveil new MSME policy

Business Standard:  October, 2013

Dehradun: Having set up a separate department of micro, small and medium enterprises (MSMEs) last year, the Uttarakhand government is preparing an MSME policy, to give a boost to small units. It may offer a series of sops to over 40,000 such enterprises in the hill state, and attract new ones.

The department of MSME has invited suggestions from business chambers. "We are working on a policy where we will encourage new units and help revive all those enterprises which were shattered in the wake of the June 16-17 deluge," said Ajay Pradyot, state MSME secretary.

The new MSME policy is to be introduced by the Congress government at a time when a similar policy under the 2008 hill promotion policy (introduced by the previous BJP government), which offers MSMEs attractive incentives, is already in place.

The year-on-year increases in the number of MSMEs set up in Uttarakhand in the first four years of the policy show that the hill industrial policy has yielded results. The policy came into effect in 2008. According to government data, between then and June 2012, more than 3,000 small (mostly micro) units, entailing an investment of Rs 400 crore and employing an estimated 12,000 people, were set up.

The incentives under the new MSME policy are expected to be similar to those under the hill region industrial policy. However, the hallmark of the new policy will be the implementation of the Single Window Act which came into force this year. "All clearances will be given under the single window system," said S C Nautiyal, additional director, department of MSME.

In the policy, the government is likely to offer incentives like a capital subsidy, which is also available under the special integrated industrial promotion policy, 2008, for hilly and remote areas of Uttarakhand. These incentives include relaxation in stamp duty, electricity bills, transport and capital subsidy, Nautiyal said, adding that the government would also give purchase preference of 20 per cent in the new policy.

The aim of the new policy is likely to be revival of the shattered economy of the hills. "If we really want to bring a new MSME policy, then we must provide good infrastructure facilities for new units. We should provide flatted factory shed complexes in the hills, which should have basic facilities like roads, electricity and water," said Pankaj Gupta, president of the Industries Association of Uttarakhand (IAU), an MSME promotion body.

The Confederation of Indian Industry (CII) has suggested that the policy should provide for a facilitator's role for the government, with a strong focus on development of supporting infrastructure (both physical and soft infrastructure), cluster development, and enhancing competitiveness.

CII has also suggested promotion of vendor parks, as well as adoption of focus sectors - traditional sectors like auto and auto components, food processing, fast moving consumer goods, information technology (IT) and IT enabled services, as well as sunrise industries such as defence and the design and manufacture of electronic systems.