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Uttar Pradesh MSME promotion policy 2022

  • 10-Oct-2022
Uttar Pradesh MSME promotion policy 2022

Hon’ble Prime Minister dreams of an economy of trillions, this phase of economy will go through multiple changes in existing business models across the country. 


The way to reach the goal will be to start from a prominent place, that is Uttar Pradesh. The state is situated at the center of the country which the privileged geographical area has been immense growth in the state in various sectors. 


UP is the third largest economy in the country and contributing 8% of India’s total Gross Domestic Product (GDP) Between 2015-16 and 2020-21 the state's GDP grew at a CAGR of 9.50% standing at INR 17.91 trillion in 2020-21. 


Nowadays, MSMEs (Micro, Small and Medium Enterprises) are a significant contributor to the economy whether it be central economy or state economy, everyone is committed to the handholding of MSMEs. India is a developing country, and our economy is growing day by day. So, MSMEs are playing crucial contribution in the modern economy.  


Uttar Pradesh initiated an especially important scheme “One District One Product (ODOP) for MSMEs. The scheme is MSME Centric scheme that focuses on providing access to acquire financial assistance from recognized banks, fair pricing, and providing training to improve technical skills to compete with global marketers. 


Uttar Pradesh cabinet approved the Micro Small Medium Enterprises Promotion Policy (MSME) 2022 as well as the State’s Bioenergy Policy 2022. The state government has also approved a proposal to reorganize the State Planning Commission as the State Transformation Commission (STC) on the pattern of the Niti Aayog.  

The Department of Commerce through DGFT is engaging with State and Central government agencies to promote the initiative of One District One Product. 


 The main objective of the scheme is to convert each District into an Export Hub by identifying products with export potential in the district, addressing bottlenecks for exporting these products, supporting local exporters / manufacturers to scale up manufacturing, and find potential buyers outside India with the aim of promoting exports, promoting manufacturing & services industry in the district and generate employment in the district.


A new MSME promotion policy, a decision to identify 5 acres or more land in every village panchayat has been taken, to boost the MSMEs in villages. The identified land would then be transferred to the directorate of industry. The policy supports developing industrial belts on both sides of expressways. Five acres or more land within five km or more area on both sides of expressways under the policy should be marked as developed as industrial clusters to facilitate the setting up of the MSMEs. Private sectors who hold 10 acres or more land will be encouraged to develop industrial parks.  


The UP-government’s scheme of One District, One Product aims to encourage such indigenous and specialized products and crafts. There are many products in UP that can be found in UP such as 'Kala namak' rice, the rare and intriguing wheat-stalk craft, world-famous chikankari and Zari-zardozi, and the intricate and stunning horn and bone work. Many products are GI tagged, which means they are certified as being specific to that region in Uttar Pradesh.  


Other products also belong to district-specific industries, their products are still unique to those regions. Asafetida, Desi ghee, Fancy glassware, Bedsheets, Jaggery, Leather Goods – the districts that specialize in these crafts are in UP. These industries are also small and medium industries that need a boost and modernization, machinery, and productivity enhancement. 


Features of MSME Policy  

  • The state government will bear the one-time guaranteed fee charged by banks on collateral-free loans of up to Rs 2 crore to entrepreneurs investing in micro, small and medium industries in the state.


  • For the new MSMEs, 50 percent of the annual interest payable on the loan (maximum Rs 25 lakh) per unit will be given for five years.


  • Entrepreneurs will be given a subsidy of 10% to 25% on capital investment, and 60 percent on loan interest to Scheduled Castes, Scheduled Tribes, and women entrepreneurs.


  • In Bundelkhand and Purvanchal regions, 25%, 20%, and 15% subsidies will be available. Madhyaanchal and Paschimchal will have 20%, 15%, and 10%. Additionally, 2% investment incentive assistance will be provided to SC, ST, and women entrepreneurs.


  • The maximum limit of investment incentive will be Rs 4 crore per unit. All new food processing units with machinery and plants of Rs 5 crore and above will be provided with an exemption from the mandi fee for five years on the purchase of raw materials as per the Mandi Act.


  • The process to apply for the allotment of plots and sheds for industrial establishments will be online.


  • The application period for the eligible investment of micro units will be two years, three years for the small-scale industry, and four years for the medium industry.


  • Tobacco production, gutka, pan masala, alcohol, aerated beverages, carbonated products, manufacture of firecrackers, plastic carry bags (less than 40 microns), and plastic bags of thickness are classified by the State Government from time to time in the prohibited category and from time to time- This policy will not apply to investment proposals for products categorized in the Restricted Category List from time to time.


The purpose and vision are clear, for the overall development of India, the growth of Uttar Pradesh is incredibly significant. Such policies by the government help to uplift the country and make it self-reliant.  

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