Industrial Initiatives - India
Available financial support provided by the Indian government and legislature for industrial initiatives includes the Lean Manufacturing Competitiveness Scheme, the Industrial Investment Promotion Incentive Scheme, the Assistance of Capital and Interest Subsidy, the Scheme for Financial Assistance to Plastic Industry and the Exemption from Tax on Electricity Tariffs.
1. LEAN MANUFACTURING COMPETITIVENESS SCHEME FOR MSMEs
- This grant to implement lean manufacturing techniques for small and medium enterprises (SME) in all of India, is backed by the Ministry of MSMEs.
- The grant will cover 80% of the costs of bringing in a lean manufacturing consultant, while the remaining 20% will be covered by the beneficiaries.
- All manufacturing Indian SMEs, no matter the specific products they manufacture, are eligible
- In order to apply, a group of SMEs should do so together with a recognized SPV representing the cluster of 10 or more companies. The SPV can apply to the National Monitoring and Implementing Unit, which will be reviewed in two steps: an in-principle approval (admission of application) and a final approval when all the criteria are met.
2. Industrial investment promotion incentive scheme
- This subsidy to help companies invest in capital improvements is backed by the Department of Industries & Commerce of the Government of Tripura.
- All new SME industrial companies, including manufacturing plants, are eligible to apply. Production should start on or after the day specified on the current tender (for 2017, it was April 1st), but no later than five years after.
- Eligible companies should be registered and have a current IEM (Industrial Entrepreneurs' Memorandum).
- The subsidy will cover 30% of fixed capital investment, with a maximum among of 50 lakhs (US$71,921). There will be an additional 2.5% subsidy for companies funded by women or citizens of scheduled cast (SC) or scheduled tribe (ST).
- Additionally, eligible beneficiaries will have procurement preference on purchases via tenders. Eligibility is based on price, which should be within 15% of the price quoted by the lowest bidder outside the state.
- The subsidy will also cover VAT and other commodity tax, up to 50 lakhs (US$71,921) per year. This aspect is limited to companies which have been in production for under five years.
- Additionally, power charges, interest on term loans, floor space rentals will be reimbursed up to 15%, 3% and 20%, respectively. This aspect is limited to companies which have been in production for under five years.
- The state will also cover the portion of transportation of raw materials not covered by the central government.
3. ASSISTANCE OF CAPITAL AND INTEREST SUBSIDY FOR MSMEs
- This subsidy is backed by the Industries Commissionerate of the Government of Gujarat.
- All SMEs in the manufacturing industry, no matter the specific product they manufacture, are eligible.
- Applicants should be registered as a manufacturing with appropriate DIC which are already operative, or plan to become operative during the program.
- The subsidy would cover expansion works of over 50% of gross fixed capital investment, and 60% or more in plant and machinery.
- The program includes a capital investment as subsidy, which will be eligible depending on the loan amount disbursed by the bank or institution. The subsidy will cover 10% of the loan, with a maximum of 15 lakhs (US$21,557), for municipal corporation areas, and 15% with a maximum of 25 lakhs (US$35,929) for outside municipal corporation limits.
- Additionally, for companies that have obtained the first disbursement will be eligible for 1% extra interest reimbursement if the enterprise is set up by citizens under 35 years of age, and 1% extra if the enterprise is set up by physically challenged, SC, ST and/or women.
- Total rate of interest subsidy can't be higher than 7% in the municipal area or 9% in other areas.
4. SCHEME FOR FINANCIAL ASSISTANCE TO PLASTIC INDUSTRY
- This subsidy and tax cut is backed by the Industries Commissionerate of the Government of Gujarat.
- All new companies in the manufacturing industry working with plastic products are eligible for this program.
- Applicant companies should be registered as an industrial unit as MSME with the appropriate DIC branch and should have obtained its IEM.
- Any recipient would not be eligible for any other financial scheme.
- The subsidy will cover 7% of a term loan for five years, with a maximum of 100 lakhs (US$143,733) per year. The loan must be used for capital investment in building, new plant and machinery and equipment. Land development is not included.
- The tax cut disposes that 80% of the net VAT paid five years after starting commercial production will be reimbursed. The amount should equal 70% of eligible fixed capital investment.
5. Exemption from tax on electricity tariffs
- This tax cut is backed by the Government of Karnataka.
- All manufacturing enterprises are eligible.
- Applicant companies should be registered as an industrial unit, with the corresponding IEM (Industrial Entrepreneurs' Memorandum).
- Exemptions can be of 100% reimbursement during between four and six years for companies outside of Karnataka area, or between six and seven years for companies within the Karnataka area.