The Uttarakhand Government has notified its first Micro, Small and Medium Enterprise (MSME) policy, which aims to boost entrepreneurship, end outward migration and bring about inclusive development in the state, especially in the remote and flood-hit hill areas. Hosiery, textiles, handlooms and khadi featured among the 10 potential sectors identified for MSME development. The policy offers several incentives like capital investment subsidy, interest subsidy and VAT reimbursement. It will remain in force until March 31, 2020, though the incentives can be availed until March 31, 2025. The state has been divided into four major categories-A, B, C and D and capital investment subsidy offered is 40, 35, 30 and 15 per cent, respectively. Interest subsidy will be available at 10 per cent, eight per cent and six per cent in categories A, B and C, respectively. There will be no interest subsidy in category D. The new policy also envisages a power subsidy and land bank development.
MSMEs will be entitled to full VAT reimbursement in the first five years after production commences in category A, and 90 per cent after the first five years. Full VAT reimbursement will also be available for the first five years in category B, and 75 per cent after that. There will be no VAT incentive in categories C and D. The Government will not levy any stamp duty in categories A, B and C. In category D, stamp duty will be at just 50 per cent. The Government will also provide all support for the cluster development schemes of the Central Government and set up mini tool rooms. The policy was prepared by the Department of MSME and the Industries Association of Uttarakhand by incorporating suggestions from the Confederation of Indian Industry. An empowered committee headed by the chief minister is being set up to monitor the implementation of the policy.
