Telangana government has unveiled a policy dedicated to micro, small and medium enterprises (MSME 2024) outlining action plan to address their key, growth constraining challenges around land, finance, raw material, skilled labour, market access and technology.

First such in the State that the Chief Minister A.Revanth Reddy described as one of the earliest policy reforms introduced by the government, since assuming office in December 2023, the policy seeks to address gaps for MSMEs in the TS-iPASS policy.

As many as 40 measures to offer end-to-end support, from startup to sale phase, form part of MSME 2024 policy that the Chief Minister accompanied by Deputy CM Mallu Bhatti Vikramarka, Industries and IT Minister D. Sridhar Babu launched in the presence of industry leaders and entrepreneurs.

Five industrial parks

Towards improving access to affordable land, the new policy said five of the 10 new industrial parks to be developed between existing Outer Ring Road and the proposed Regional Ring Road will be exclusively for MSMEs. One will be reserved for women-owned MSMEs, while another will be for innovative start-ups.

In all new industrial parks, 5% plots will be reserved for women and 15% plots for SC/ST entrepreneurs. Land cost rebate for SC/ST entrepreneurs will be 50% with a cap of 50 lakh. The government also intends to encourage development of private flatted factory complexes and industrial parks, by offering stamp duty discounts and rebates on the land cost. It will construct flatted factories with in-built facilities for women across 119 constituencies, particularly encourage SHG women members to set up small businesses.

Spurring on with subsidy

On challenges related to finance, the MSME policy proposes capital investment subsidy scheme under which SC/ST entrepreneurs will get 50% with a cap of ₹1 crore (for manufacturing units); while all other MSMEs will get a subsidy of 25% with a cap at ₹30 lakh; and women entrepreneurs a 20% additional subsidy and additional cap of ₹20 lakh. Pilot programmes will be launched for MSMEs to access credit based on future sales.

Other measures for accelerating growth of MSME, which the Chief Minister wanted to play a key role in the State emerging as $1 trillion economy, the policy has recommended setting up of 10 new common facility centres to be developed around MSME clusters in as many districts; establishing cluster-based testing facilities on PPP mode; one warehouse will be constructed in PPP model in each of the 5 ORR-RRR MSME parks. Construction of warehouses will be encouraged by 100% stamp duty discount and land cost rebates. The duty incurred on import of raw material will also be reimbursed.

₹100 crore Yantram Fund

Under technology assistance measures, the government will constitute a ₹100 crore Yantram Fund to encourage adoption of technology by MSMEs. The government will also come with a policy on preferential public procurement stipulating that 25% of such procurement will be from MSMEs. The government will support co-location of ancillary MSMEs that are a part of supply chain for large-scale MNCs setting base in Telangana. The ancillary MSMEs will be given the same incentives as the large units.

Reimbursement of cost

Bulk purchase of digital technology at discounted rates for MSME clusters and industrial parks will be taken up, while IPR registration cost for all MSMEs will be reimbursed. Also, duty on samples imported for prototyping up to ₹10 lakh will be reimbursed. For women owned MSMEs, the limit will up to 15 lakh.