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2
 परिशिष्‍
ट‍-‍एक

Government of Madhya Pradesh

MP MSME
Development Policy, 2019

Department of Micro, Small and Medium Enterprises

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 INDEX
No. Subject Page No.

1. Introduction 1
2. Objectives of MSME Development Policy 2
3. Policy Focus Area 2
4. Operative period of the Policy and work areas 3
5. Enabling framework : Ease of doing business 3
6. General provisions for availing concessions 4
7. Concessions 5
8. Expansion/Diversification/Technical up-gradation 7
9. Creation and maintenance of improved infrastructure facilities 8
10. Capacity Strengthening 9
11. Revival of sick units 10
12. Amendment /relaxation /cancellation 11
13. Jurisdiction 11
14. Glossary 11
Annexure - I
List of ineligible industries 13
Annexure - II
Special Package to Powerlooms Sector 15
Annexure - III
Special Package to Pharmaceutical Sector 16
Annexure - IV
Special Package to Apparel Sector 18

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 Government of Madhya Pradesh
Department of Micro, Small and Medium Enterprises

M.P. MSME Development Policy, 2019

1. Introduction
Micro, Small and Medium Enterprises (MSME) sector is considered engine for
socio economic growth in the country and is fast emerging as the most vibrant and
dynamic sector of the Indian economy. MSMEs provide the largest share of
employment after primary sector. We are aware that, employment generation is
one of the main challenges faced in the country today. This makes development of
MSME sector most crucial. The Government of Madhya Pradesh (GoMP) recognizes
this aspect and accordingly, is giving priority to the development of the MSME
sector in the state.
Considering the significant role of MSME in employment generation and
economic and social development, and knowing the fact that MSME sector is one
of the key drivers for transition from an agrarian economy to an industrialized
economy, the state has decided to give special attention to this sector. To fulfil this
objective, a dedicated department has already been created for MSMEs.
Department of MSME, GoMP is playing a pivotal role in enhancing the state’s
MSMEs competitiveness. MSME Department is proactive in providing conducive
ecosystem for MSME development through various schemes and initiatives. MSME
Department intends to take multi-pronged initiative to create a supportive and
enabling ecosystem for establishment and growth of MSMEs in state.
Department of MSME, GoMP has taken several steps to derive maximum
benefits for MSME sector out of the policy initiatives at the central and state level.
The state government has also taken progressive steps towards improving Ease of
Doing Business. The state also has its own Start Up policy for promotion of start
ups and incubators.

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 Madhya Pradesh Government has been supporting entrepreneurs/ Self-
Employment beneficiaries by providing an enabling environment for job creation
and entrepreneurship. Department of MSME, Government of Madhya Pradesh run
various flagship scheme for employment generation and promotion under which
there is provision of interest subsidy and margin money support on capital
investment.
The department stands committed to the Initiatives of GoI and assure that it
is in the process of developing a vibrant MSME in the state. With this commitment,
Department has decided to constitute a dedicated MP MSME Development Policy
2019. It touches upon all those aspects which leads to the focused growth of the
MSME sector in the state. The policy has been drafted through a consultative
process after taking opinions and suggestions of all stakeholders including Industry
Associations, Financial Institutions, Experts and related Government Departments.

2. Objectives of MSME Development Policy

The key objectives of the MSME Development Policy 2019 are :-
i. Achieving the state’s goal of overall industrial development and MSME
competitiveness
ii. Creating enabling infrastructure
iii. Providing a conducive ecosystem and promoting inclusive growth for
MSMEs.
iv. Providing an opportunity to young entrepreneurs through instilling
employment generation

3. Policy Focus Area

To achieve the objectives, this policy is focused on following six pillars
i. Enabling framework: Ease of doing business
ii. Procedural reforms for release of concessions to eligible MSME units

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 iii. Creation and maintenance of improved infrastructure facilities through
private developers
iv. Infrastructure development on PPP Model
v. Procedural assistance through online services
vi. Time bound delivery of services & assistance.
4. Operative period of the Policy and work areas
4.1 This Policy shall come into effect from 01.10.2019.
4.2 This policy will continue till the time replaced by the new policy.
4.3 The MSME units commencing commercial production after 30.09.2019
shall be eligible to avail benefits only under this policy. After the
enforcement of this policy, the option of availing facilities/benefits for
MSME promotion scheme 2017 will be closed for new manufacturing
units which commence production on or after 01.10.2019. Units, which
commence production before 01.10.2019 would eligible to avail
concessions under the MSME Development Policy 2017 or any earlier
relevant policies.

5. Enabling framework: Ease of doing business

5.1 Improving business climate by enhancing ease of doing business
The Government of MP has taken various initiatives to improve the
business environment in state by continuing to bring in regulatory
reforms and simplify procedures for the promotion and development of
MSME in the State. GoMP shall continue to take new initiatives to
improve the services provided by the government to MSMEs for doing
business in the State. The DoMSME has taken up following steps to
improve the business climate for MSMEs in the State:
i. Departmental concessions are now being extended through online
process. Procedure has been simplified.
ii. The land allotment process for MSMEs has been made online.

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 iii. New Store Purchase Rules are being formed to increase the MSME
supplier base of the government departments and expedite the
procurement process from the MSME suppliers.
iv. The renewal process of various licenses of different departments shall
be simplified for MSMEs.
5.2 MSME Business Facilitation Cell
In order to facilitate /support MSMEs, office of Industries Commissioner
has constituted a cell. Through this cell support consultants have been
deputed across the state at DTIC offices to extend handholding support
to the MSMEs.
5.3 Institutional Measures for Grievance Resolution
In order to address the grievances of state's MSMEs regarding their
payment issues, GoMP has constituted a Madhya Pradesh MSE
Facilitation Council (MSEFC) as per the MSMED Act 2006, which is
functional in its full spirit.

5.4 District Level Assistance Committee

Following committee at District level under the chairmanship of District
Collector will be responsible to extend the concessions to the eligible
MSMEs under the provisions of this policy :-
1. District Collector - Chairman
2. Lead District Manager - Member
3. General Manager - Member Secretary
District Trade & Industries Centre

6. General provisions for availing concessions

6.1 The concessions is not applicable for units which comes under the
category of ineligible industries as mentioned in the Annexure – I

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 6.2 Under this policy, it will be mandatory for beneficiary units to provide
70% of its total employment to the permanent residents of Madhya
Pradesh and in that 70% employment, representation of SC , ST & Other
Backward Classes, as per reservation declared by the State Government,
will be mandatory also.
6.3 If any sick unit is revived during the policy period, it can avail the
concession (as per eligibility) provided in the policy as per the package
approved by the empowered committee.
6.4 The procedures for availing concessions will be detailed out in MSME
Promotion Scheme 2019 in which detailed information of procedures,
eligibility criteria, required documents for availing subsidy/incentive,
limit of total assistance and terms & conditions for beneficiary units etc.
will be included. Above scheme will be part of this policy.
7. Concessions
7.1 Industrial Development Subsidy
7.1.1 Industrial development assistance to the new industrial units @
40% on the eligible investment made by them in Plant &
Machinery and building. This assistance shall be disbursed in 4
equal annual installments.
7.1.2 The cost of building shall not be more than 100% of the cost of
Plant and machinery for the purpose of calculating the assistance.
7.1.3 Additional Industrial Development Subsidy of 2% per year (for four
years) for unit set up by women/SC/ST entrepreneur(s) or 2.5%
per year (for four years) for unit set up by women entrepreneur(s)
of SC/ST category; and
7.1.4 Additional Industrial Development Subsidy of 2% per year (for four
years) to the industrial units for exporting more than 25% and
upto 50% of their total sales;
or

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 Additional Industrial Development Subsidy of 3% per year (for four
years) to the industrial units for exporting more than 50% of their
total sales.
7.2 Support in Quality Certification
7.2.1 Assistance upto 100% of the cost incurred on obtaining
ISO/BIS/BEE certification subject to maximum limit of Rs. 5 Lakhs
to micro category unit.
7.2.2 For ZED Certification for improving brand recognition of MSME
and reducing effect on environment : GoI provides assistance @
80%, 60% and 50% to micro, small and medium units
respectively. GoMP will provide assistance upto 50% of the
balance amount (10%,20%,25% of total cost respectively to
micro, small and medium units)
7.2.3 For obtaining quality certification exclusively for export, during
policy period, which made MSMEs of manufacturing sector of the
state, eligible to export in USA/European Union/Other OECD
countries: Assistance upto 50% of the cost incurred on obtaining
these certification subject to maximum limit of Rs. 25 Lakhs.
7.2.4 MSMEs, who have commenced production before this policy but
obtain quality certification within this policy period, shall also be
eligible to avail reimbursement under this policy.

7.3 Reimbursements for Patents

7.3.1 100% reimbursement to a maximum of Rs. 5 Lakhs to MSME
units for domestic patents/IPR registration during the policy
period.
7.3.2 100% reimbursement to a maximum of Rs. 10 Lakhs to MSME
units for International patents/IPR registration during the policy
period.

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 7.4 Financial Assistance for Infrastructure Development
7.4.1 50% assistance max Rs. 25 Lakhs to the small and medium new
industrial units, established in private or undeveloped Govt. land,
for developing infrastructure upto their premises .
7.4.2 50% reimbursement max of Rs. 25 Lakhs for the establishment of
an effluent treatment plant (ETP) by the industrial unit.
7.4.3 50% reimbursement up to a maximum of Rs. 100 Lakhs for the
establishment of an Common effluent treatment plant by a group
(minimum 5) of industrial units.
7.4.4 50% financial assistance max of Rs. 250 Lakhs to the Developers
for industrial area/flatted industrial complex in private sector.
7.4.5 50% financial assistance max Rs. 50 Lakhs as reimbursement
towards the agency doing infrastructure development for
strengthening the MSME cluster working in private land.

7.5 Financial Assistance for Energy audit

To promote energy efficiencies in MSME units, GoMP will reimburse
50% of the cost of conducting energy audit with maximum limit of Rs.
50,000 and 25% of the cost maximum Rs. 5 Lakhs for adoption of
equipment and machinery

7.6 Special Packages

7.6.1 The State Government would give special package to Powerlooms
sector as described in Annexure - II.
7.6.2 The State Government would give special package to
Pharmaceutical sector as described in Annexure - III.
7.6.3 The State Government would give special package to Apparel
sector as described in Annexure - IV.

8. Expansion/Diversification/Technical up-gradation
8.1 Established micro, small and medium industrial units which undertakes
expansion will be eligible for assistance/facilities at par with new

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 industrial units on their additional eligible investment.
8.2 Established micro scale industrial units, which invest additional Rs. 10
Lakhs or more in plant & machinery, shall be eligible for
assistance/facilities at par with new industrial units.
8.3 Established small scale industrial units, which invest additional Rs. 25
Lakhs or more in plant & machinery, shall be eligible for
assistance/facilities at par with new industrial units.
8.4 Established medium scale industrial units, which invest additional Rs.
100 Lakhs or more in plant & machinery, shall be eligible for
assistance/facilities at par with new industrial units.
8.5 If total investment in plant and machinery became more than Rs. 15
crores after expansion/diversification/technical upgradation, then the
unit will not be eligible for assistance/facilities under this policy.
9. Creation and maintenance of improved infrastructure facilities
Development of industrial infrastructure with best facilities will surely boost
the MSME growth. The MSME department shall come up with new industrial
land and shed allotment rules in alignment with this policy. Under this:-
9.1 The Department will increase the “Land Bank” of Government Land for
future development of Industrial Areas/Parks/Estate exclusively for
MSME units.
9.2 GoMP shall establish dedicated MSME parks in the districts where
there are ample opportunities of MSME development.
9.3 Department will encourage the industrial areas in private sector.
9.4 Special focus and thrust shall be given to creation of flatted structure in
industrial area on PPP mode.
9.5 Online Land Application and Allocation System shall be made easier
and user friendly.
9.6 State Govt. shall come up with new 'Industrial Land Allotment Rules'.
10 percent plots will be reserved in the Departmental industrial area

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 for the units owned by Scheduled Castes, Scheduled Tribes and OBC
category.
10. Capacity strengthening

10.1 Cluster development

10.1.1 The State Government has adopted the cluster development
approach as a key strategy for industrial & economic
development of MSEs as well as factors which will promote in
establishment of new industrial area in the State.
10.1.2 GoMP will formulate State's own Cluster Development
Scheme for creating the Infrastructure (ID) and Common
Facility Centre (CFC) facilities for the MSME clusters spread
over across the state with support from GoI.
10.1.3 A dedicated cluster development cell shall be created to
properly implement the Cluster Development Scheme of State
& GoI. This cell shall be responsible to cater to the needs of
MSME clusters of the State.
10.1.4 Madhya Pradesh Laghu Udyog Nigam will be the nodal agency
for cluster activities in state.
10.2 Self-Employment
10.2.1 In order to provide the self-employment opportunities for the
youth, the MSME department is presently running various self-
employment schemes, which provide concessions and hand-
holding support to young entrepreneurs.
10.2.2 A new Self employment scheme with more effective hand
holding support and better incentives shall be initiated.
10.2.3 Beneficiaries of Self employment schemes shall be given
opportunity to participate in international trade
fair/exhibitions.
10.2.4 Business skills of youth shall be improved through online EDP
module.

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 10.2.5 In order to support the applicants of self employment schemes,
a panel of Chartered Accountants (CAs) will be made at district
level.
10.2.6 Additional grant will be provided in self-employment schemes
to SC/ST beneficiaries
10.3 Start-up and Incubation Support
To nurture innovation and start-up ecosystem for young entrepreneurs
in the state, Government of Madhya Pradesh shall come up with new
“MP Start-up Policy”.
11. Revival of sick units
11.1 To revive potentially viable sick/closed unit, a package will be made
with the help of Bankers/ Financial Institutions.
11.2 The key responsibilities of preparing the revival package will be
Bankers/ Financial Institutions
11.3 The Sick Industrial Unit in consultation with Bankers/ Financial
Institutions will prepare its proposal for seeking package of concessions
and submit it to the Empowered Committee.
11.4 The empowered committee will be set up to decide on revival package
in favor of sick industrial units, under the chairmanship of Principal
Secretary, Department of MSME. The constitution of the Committee
will be as follows:
i. Principal Secretary, MSME Department (Chairman)
ii. Principal Secretary/ Secretary of the departments from which
concessions/ relief are sought by the sick units.
iii. Industries Commissioner, MSME Department (Member)
iv. Zonal Manager of the concerned bank branch (Member)
v. Branch Manager/ In charge officer of the Bank/ Financial Institute
through which revival package is proposed.

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 vi. Joint / Deputy Director, MSME Department (Member Secretary)
11.5 Banks/ Financial Institutions wil prepare revival package in favour of
viable sick industrial units, in which concession can be sought from
State Govt.
11.6 The concession/relief sought under revival package will be placed
before empowered committee. The empowered committee will be
fully authorised to take decesion on the demands/concession sought
under revival package with the consent of the concerning department,
on merits.

12. Amendment/Relaxation/Cancellation
Regardless of the provisions under the policy, the Madhya Pradesh
government, the Micro, Small and Medium Enterprises Department at any
time -
12.1 May amend or cancel this policy
12.2 May relax the provisions of this policy
12.3 May issue instructions/ clarifications/guidelines to clarify the provisions
of the policy.
13. Jurisdiction
In case of any dispute, the court area will be Madhya Pradesh.
14. Glossary
i. Policy means "MP MSME Development Policy 2019''.
ii. MSME means, micro, small and medium enterprises defines under
Micro, Small and Medium Enterprises Development Act, 2006
(amendment from time to time Inclusive).
iii. Unit/industrial unit means, manufacturing unit of MSME category in
Madhya Pradesh

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iv. Investment in plant and machinery means as per Micro, Small and
Medium Enterprises Development Act, 2006 (amendment from time to
time Inclusive).
v. Investment in building means investment in factory buildings & sheds,
which is used for production but shall not include dwelling units.
vi. New industrial unit means such manufacturing unit of MSME category,
which are established during the policy period.
vii. Existing industrial unit means, a industrial unit which commenced
commercial production before 01.10.2019 or new industrial units which
made expansion/ diversification/technical upgradation during the policy
period.
viii. Women/SC/ST entrepreneur unit means operational unit in which
Women/SC/ST entrepreneur(s) have hundred percent stake.
ix. The date of commercial production means after commencing
production date of the first time sale of the goods produce, which means
the date of the bill date of the first sale.
x. Quality certification means, ISO certification issued by third party
authorized agencies for quality certification or BIS/BEE certification or
ZED certification or certification exclusively for export.
xi. Patent Means, The patent defined under Patent Act, 1970 (including
amendments made from time to time) and or underlying patent.
xii. MSME Directorate means The Directorate under the Micro, Small and
Medium Enterprises Department of Government of Madhya Pradesh.
xiii. The State Government means the Micro, Small and Medium Enterprises
Department of Government of Madhya Pradesh.
xiv. District Trade & Industries Centre means the district level office of
MSME Directorate under the Micro, Small and Medium Enterprises
Department of Government of Madhya Pradesh.


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 Annexure - I

List of ineligible industries

1. Activities pertaining to trading and services

2. Beer and liquor which contains alcohol

3. Manufacturing of all kinds of pan masala and gutkha

4. Manufacturing of Tobacco and tobacco based products

5. Manufacturing of plastic bags of thickness 40 micron or lesser and all

type of polythene bags.

6. Industrial units set up by central or state government or their

undertaking

7. Stone crusher

8. Grinding of minerals, Calcination (Excluding manufacturing of artificial

sand from crushed stone)

9. Defaulter of state government/state government undertaking

10. All types of mining activity (where there is no value addition)

11. Manufacturing of Charcoal

12. All type of Solvent extraction plant (Excluding edible oil expeller units,
which invested Rs. 1 crore or less in plant & machinery)

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13. All type of oil refineries

14. Cement /Clinker manufacturing

15. Publishing and Printing processes of all types

16. Saw milling & planing of wood

17. Pressing of iron/steel scrap into blocks or any other shapes

18. Electricity generation units

19. Package drinking water

20. Sortex plant and Sorting/Grading/Cleaning of crops/grain

21. All types of aerated/ carbonated drinks

22. Slaughter house and industries based on meat

23. Any industry declared by state government from time to time with
reference to MP MSME Development Policy 2019

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 Annexure – II

Special Package to Powerlooms Sector

(A) Special Package

1. GoMP shall provide 25% of upgradation cost or 100% remaining of GoI’s
financial support after adjustment (if any) whichever is less as financial
assistance for upgradation of plain/semi automatic shuttle powerloom
into modern shuttleless powerloom subject to a maximum of 10 looms in
a unit.
2. Concession @ Rs. 1.50 per unit to the powerloom, upto 20HP capacity
and @ Rs. 1.25 per unit to the powerloom for above 20HP but upto
150HP capacity in electricity supply. Also, 100% reimbursement of fixed
charges and difference in minimum charges & actual consumption in
electricity supply for the powerloom of upto 150HP capacity.
3. 60% financial assistance up to maximum of Rs. 500 Lakhs to the
Developers for industrial area/flatted industrial complex for powerloom in
private sector.

(B) Other Assistance

1. Industrial Development Subsidy as per clause 7.1 of this policy.

2. Support in quality certification as per clause 7.2 of this policy.
3. Reimbursements for Patents as per clause 7.3 of this policy.
4. Financial Assistance for infrastructure development as per clause 7.4 of
this policy (excluding sub-clause 7.4.4).
5. Support in energy audit as per clause 7.5 of this policy.

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 Annexure - III

Special Package to Pharmaceutical Sector

(A) Special Package

1. Industrial Development Subsidy

1.1 Industrial development assistance to the new industrial units @
40% on the eligible investment made by them in Plant & Machinery
and building. This assistance shall be disbursed in 4 equal annual
installments.
1.2 The cost of building shall not be more than 200% of the cost of Plant
and machinery for the purpose of calculating the assistance.
1.3 Additional Industrial Development Subsidy of 2% per year (for four
years) for unit set up by women/SC/ST entrepreneur(s) or 2.5% per
year (for four years) for unit set up by women entrepreneur(s) of
SC/ST category; and
1.4 Additional Industrial Development Subsidy of 2% per year (for four
years) to the industrial units for exporting more than 25% and upto
50% of their total sales;
or
Additional Industrial Development Subsidy of 3% per year (for four
years) to the industrial units for exporting more than 50% of their
total sales.
2. 50% of the expenditure incurred on creating facilities for obtaining
certificate of WHO-GMP or US-FDA certificate for export readiness,
would be reimbursed up to a maximum limit of Rs. 50 lakhs.
3. Assistance @ 50%, maximum Rs. 25 Lakhs to extend support for
establishment of lab equipments & machinery.

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 4. 60% financial assistance up to maximum of Rs. 500 Lakh to the
Developers for industrial area/flatted industrial complex for
pharmaceutical units in private sector

(B) Other Assistance

1. Support in quality certification as per clause 7.2 of this policy (excluding

7.2.3).
2. Reimbursements for Patents as per clause 7.3 of this policy.
3. Financial Assistance for infrastructure development as per clause 7.4 of
this policy (excluding sub-clause 7.4.4).
4. Support in energy audit as per clause 7.5 of this policy.

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 Annexure - IV

Special Package to Apparel Sector

(A) Special Package

1. New industrial Readymade garments and made-ups (wearable or non-

wearable fabric, stitched fabric, in which atleast two ends of the cloth is
stiched by using machinery) manufacturing units having atleast Rs. 1.00
crores invested in plant & machinery & minimum 25 regular employee,
will be provided 25 percent of salary of each regular employee, which is
a permanent residents of the state, maximum Rs. 2500 per month, up to
an annual limit of Rs 5 lakh, for 5 years as a 'Salary grant'.
2. 60% financial assistance up to maximum of Rs. 500 Lakh to the
Developers for industrial area/flatted industrial complex for Apparel
units in private sector.

(B) Other Assistance

1. Industrial Development Subsidy as per clause 7.1 of this policy.

2. Support in quality certification as per clause 7.2 of this policy.
3. Reimbursements for Patents as per clause 7.3 of this policy.
4. Financial Assistance for infrastructure development as per clause 7.4 of
this policy (excluding sub-clause 7.4.4).
5. Support in energy audit as per clause 7.5 of this policy.

Note : This document is english translation of "MP MSME Vikas Niti 2019" (Hindi Version)

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