55% Capital Subsidy to Micro and Small Enterprise on Industrial Shed Developed by Private Developers

55% Capital Subsidy to Micro and Small Enterprise on Industrial Shed Developed by Private Developers in Gujarat

55% Capital Subsidy to Micro and Small Enterprise on Industrial Shed Developed by Private Developers in Gujarat

 

Micro and Small Enterprises (MSEs) sector has emerged as a very important sector of the India economy, contributing significantly to employment generation, innovation, low capital investment and inclusive growth of the economy. Due to limited resources and available market, most of the MSEs are located in and around urban areas. Around 43% of population in Gujarat resides in urban areas. Due to massive development in urban areas, there is a sharp increase in the cost of land and building construction in the country. MSEs, having very limited financial resources, find difficulties to start their units in developed industrial areas. For cost cutting in fixed expense for shed by MSEs in starting a business, Government of Gujarat has declared a scheme of Assistance to MSEs for shed developed by private developer.

 

What is Operative Period of Scheme?

The Operative Period of the scheme shall be Five Years from the date 07/08/2020 (i.e. date of announcement of Industrial Policy 2020) to 06/08/2025.

 

What is meaning of Private Developer under the Scheme?

Here, Private Developer means any Industries Association / Any enterprise registered under the Societies Act, Partnership Act, Trust Act, Companies Act or SPV constituted for setting up of MINI ESTATE shall be eligible to develop Mini Estate under this scheme.

 

What is Mini Estate?

Mini Estate means an Industrial estate having area not more than Two Hectares and having constructed shed admeasuring of 50 Sq.Mt to 100 Sq.Mt. each Shed.

 

What are minimum facilities required at Mini Estate?

The following Infrastructure Facilities are required to be provided by the Private Developer to set up Mini Estate for MSEs.

  1. Asphalt Road / RCC Road / Cement Concrete Road.
  2. Storm Water Drainage System
  3. Domestic Sewerage Collection and Disposal System
  4. Streetlights
  5. Water / Gas / Power Supply distribution network up to the shed
  6. Steam / Gas Pipeline
  7. Connectivity for communication

 

Which Type of Cost included in The Cost of Shed?

The Cost of Shed includes total cost of land (including Stamp duty and registration charges), cost of building and other infrastructure facilities as per prevailing SOR of concerned Government Department or its undertaking and technical Consultancy fees and TPQA (Third Party Quality Assurance) charges. The eligible fixed capital investment of the project will be decided on the basis of the following criteria.

Eligible Fixed Capital Investment
Description Of Criteria
Cost of Land The cost of land will be decided on the basis of prevailing jantri price of the area or the actual price paid by Private Developer whichever is Less.
Cost of Building The cost of industrial building will be decided by SLEC as per prevailing SOR of concerned Government Department or its undertaking.
Other Infrastructure Facilities The Cost of other infrastructure facilities will be as decided by the SLEC as per prevailing SOR of concerned Government Department or its undertaking.
Technical Consultancy fees and TPQA charges The fees and charges paid for the technical services and Third Party Quality Assurance for development of Mini Estate shall be up to 3% of the project cost or Rs. 20.00 lakhs whichever is less.

 

What kind of expenditure is not eligible for Capital Subsidy under this scheme?

Expenditure incurred towards land development, goodwill fees, commissioning fees, royalty, preliminary and pre-operative expenses, interest capitalized, transportation equipments / vehicles, consultancy fees (other than technical consultancy), working capital and other expenditure not specified as eligible investment.

 

How much Subsidy is available under the scheme?

The subsidy is available @ 55% of The Cost of Shed.

 

What is the Maximum ceiling Limit of Capital Subsidy?

The maximum ceiling is Rs. 5 Crores.

 

How Subsidy will be disbursed?

The subsidy will be disbursed to Private Developer as follow and the private developer will pass on this assistance to the allotee at the time of allotment.

Subsidy Amount
Time of Disbursement
30% of the cost of Shed

 

after the sale of Individual Shed
25% of the cost of Shed

 

after  commencement of the production by MSEs

 

When can Private Developer  apply for Capital Subsidy?

The registration for setting up of Mini Estate shall have to be obtained before initiating the implementation of project at site. After sanction of project for subsidy private developer can start work to develop Mini Estate.

 

Thank you for reading our article. You may contact us for any query regarding 55% Capital Subsidy to Micro and Small Enterprise on Industrial Shed Developed by Private Developers in Gujarat.

 

 

 

 

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