New Gujarat Industrial Policy 2020

by | Sep 25, 2020 | Insight

Vide this update, we wish to apprise key features of the New Gujarat Industrial Policy 2020 which intends to make Gujarat ‘The Business Card of India’. The Policy focuses to promote MSMEs with added focus on certain ‘Thrust Sectors’. Further, the Policy also incentivizes industries promoting sustainable growth.

 

The Policy has come into force from August 7, 2020 and is applicable for 5 years. The key features of the policy are discussed hereunder:

 

  1. Incentives for Large / Mega and Ultra Mega investments:

 

Unlike Industrial Policies of other States, this policy de-links incentives from SGST to provide transparency in calculation. Under the Policy, following incentive shall be offered based on Fixed Capital Investment (‘FCI’) without an upper ceiling amount:

 

Taluka Category

General Sectors

Thrust Sectors*

Category 1

 

10 percent of eligible FCI (excluding land)

 

12 percent of eligible FCI (excluding land)

Category 2

 

8 percent of eligible FCI (excluding land)

 

 

10 percent of eligible FCI (excluding land)

 

 

Category 3

(including Municipal Corporation areas)

 

4 percent of eligible FCI (excluding land)

 

6 percent of eligible FCI (excluding land)

 

 

* Policy defines Thrust Sectors and includes Electrical Machinery and Equipment, Industrial Machinery and Equipment, Auto and Auto Components, Ceramics, Technical Textiles, Agro and Food Processing, Pharmaceuticals and Medical devices, Gems and Jewellery, Chemicals (in designated area) etc.

 

** The aforesaid Incentive shall be given over a period of 10 years in equal instalments subject to an annual cap of INR 40 crores.

 

  1. Incentives for MSMEs:

 

  • Following Capital subsidy and Interest subsidy on term loans will be provided to MSMEs basis the category of Talukas where such MSMEs are established:

 

Taluka Category

Capital subsidy

Interest subsidy*

Category 1

 

25 percent of eligible term loan amount subject to maximum of INR 35 lakhs. Additional INR 10 lakhs would be granted if eligible FCI exceeds INR 10 crores

 

 

7 percent of term loan amount up to maximum of INR 35 lakhs p.a. for 7 years

Category 2

 

20 percent of eligible term loan amount subject to maximum of INR 30 lakhs. Additional INR 7.5 lakhs would be granted if FCI exceeds INR 10 crores

 

 

6 percent of term loan amount up to maximum of INR 30 lakhs p.a. for 6 years

Category 3

(including Municipal Corporation Areas)

 

10 percent of eligible term loan amount subject to maximum amount of INR 10 lakhs. Additional INR 5 lakhs would be granted if FCI exceeds INR 10 crores

 

 

5 percent of term loan amount up to maximum of INR 25 lakhs p.a. for 5 years

 

* Additional Interest subsidy would be granted in certain cases. Maximum Interest subsidy to be capped at 9 percent for all categories. Further, Interest subsidy would be granted in such manner so that each unit bears minimum 2 percent of total interest on term loan.

 

  • Quality Certification Support – Fiscal support shall be provided up to 50 percent of fee payable to Recognized International Certification Authority and 50 percent cost of equipment required for certification, subject to maximum of INR 10 lakhs.

 

  • Information and Communication Technology Adoption – Assistance shall be offered for installation of ERP up to 65 percent of cost subject to maximum of INR 1 lakh. Assistance for adoption of ICT facilities shall be extended up to 65 percent of cost subject to maximum of INR 5 lakhs.

 

  • Technology Upgradation and Acquisition Support from Recognized Institutions – Assistance up to 65 percent of cost payable will be offered subject to maximum of INR 50 lakhs.

 

  • Patent support – Partial reimbursement of cost for filing of domestic / international patents shall be offered up to 75 percent of cost subject to maximum of INR 25 lakhs. Within such support, reimbursement of attorney fees is capped at INR 50,000 for national patent and INR 2 lakh for international patent.

 

  • Market Development Assistance

 

Category

Incentives

Participation in exhibition within India

 

o    State Level exhibition – Assistance of 75 percent of stall rent up to INR 50,000

o    National Level exhibition – Assistance of 75 percent of stall rent up to INR 1 lakh

o    International Level exhibition – Assistance of 75 percent of stall rent up to INR 2 lakhs

 

Subject to total 5 claims by unit during Policy period

 

Participation in exhibition outside India

 

Assistance of 60 percent of stall rent up to maximum of INR 5 lakhs

 

Subject to total 3 claims by unit during Policy period

 

Organizing exhibition within Gujarat

 

60 percent of electricity bill

 

  • Raising capital through SME exchange – Assistance shall be provided of 25 percent expenditure incurred on raising equity capital through SME exchange, subject to INR 5 lakhs on one time basis.

 

  1. Incentives for Start Ups:

 

  • Sustenance Allowance – Sustenance Allowance at INR 20,000 per month for one year will be granted. In case of at least 1 woman founder, amount shall be INR 25,000 per month for one year.

 

  • Seed support – Seed support for product development, marketing and professional assistance shall be available up to INR 30 lakhs.

 

  • Soft skill assistance – Up to INR 1 lakh will be granted for training in soft skills.

 

  • Acceleration Programs – Assistance up to INR 3 lakhs would be provided for attending national / international acceleration programs.

 

  • Promotional events – Assistance of 75 percent of expenditures incurred on conducting seminars, workshops, bootcamps etc. shall be provided subject to maximum of INR 5 lakhs.

 

  1. Availability of Government Land for lease:

 

The Government will facilitate industries in acquiring “Government Land” on lease at 6 percent of market rate for 50 years for setting up an industrial project. This lease can be further extended after 50 years.

 

  1. Other incentives: The Policy also grants other incentives for initiatives on sustainable development, support for environmental infrastructure, promotion of R&D within the State etc.

 

Hope you find this an interesting read. Please feel free to share your comments / feedback on the same.

 

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