Author: SDS Fin Advisory

Becoming an industrial state, Gujarat is becoming a hub for investors to invest more capital. It is giving a good return to several investors, and after the new industrial policy 2020, several schemes are attracting other investors to enhance the industrialization in Gujarat.

New businesses and startups are getting multiple benefits to enhance their business due to the assistance rapidly, and the Gujarat government provides them. Gujarat is a strong platform for businesses to accelerate growth in the industry and prepare the best outcomes in minimum time.

Gujarat Industrial Policy 2020 aims to promote the businesses and develop a better infrastructure to reshape the businesses. The industrial policy has created adequate provisions to enhance the business’s infrastructure model and other facilities to develop industrial parks in the state. These industrial parks can enhance the knowledge of business for the new ones, and give them the confidence to build a business using available resources.

The scheme for assistance to industrial parks is managed by a task force that came into action in 2015. They understand the business’s competitiveness and provide necessary pieces of information to enhance the business’s infrastructure. The Gujarat government is boosting the participation of private firms to take action for the industrial parks. With motivation and confidence, the government is assisting businesses by incentivizing the businesses.

The name of this scheme is “Financial Assistance to the Industrial Parks.”

Eligibility of the institution to develop Industrial Parks.

If any institution or enterprise is registered under the Companies Act, Partnership Act, Trust Act, Societies Act, or other Acts under the development of industrial parks will come under the eligibility criteria of preparing the industrial parks.

Definition of Industrial Parks

An industrial park will consider being an industrial park with a minimum area of 20 hectares, allowing 10 industrial units to get established. The manufacturing unit of these industries must be separated by additional 2 units of 5 hectares, which can be used for the manufacturing operations.

All the areas must meet all the basic requirements like developed plots, road construction, water facilities, sewage, complete management of power, communication, and residing area. These requirements are crucial for every industrial park to get assistance and develop an industrial park for industries.

Assistance to these Industrial Parks

• The eligible institution for the assistance will get 25% of the eligible expenditure, 30 crore rupees are maximum. The assistance is not including the land cost to get the amount.
• If the industrial park is going to establish in Vanbandhu Taluka, then the assistance of 50% of the total expenditure will be there. The maximum amount to get assistance will be 30 crore rupees.
• Additionally, in the hostel/residence area for workers, the institution will get 25% assistance or 20 crores per the development’s eligibility and rate.
• After the park’s completion, the remaining 15% of the reimbursement will get sanctioned for the developers. The remaining 85% of the assistance will be provided while the development of the industrial park.
• The eligible institution will get 100% reimbursement of stamp duty paid on purchase of land.

Conclusion

The Gujarat Industrial Policy 2020 is assisting several new developers, and businesses to enhance their business properly. It is crucial to understand the policy properly, which will help the institution get the reimbursements and proper assistance to enhance its industrial image.

There will be a committee, which will check all the documents to create an industrial park. This committee is a government body that follows the assistance’s complete procedure and allows the institute to participate in the scheme. This scheme is crucial for the businesses because of the total assistance from the government.

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Product Parameters
1. Objective	1. Providing financial support to all MSMEs which are manufacturing products or providing services which are directly related to fighting corona virus, such as Pulse Oximeters, Permitted drugs (Remdesivir, Fabiflu, Dexamethasone, Azithromycin, Zincovit, Limcee, Ivermectin, Paracip, Azax, Betadine, etc), Ventilators, PPEs, inhalation Masks, IV Fluid – DNS / Dextrose, IV Sets, IV Cannula, ICU Beds, Cardiac monitors, Syringe pumps, Portable X ray machines, Endotracheal tube, Suction tube, etc. 2. Providing financial support to all MSMEs which are manufacturing Oxygen cylinders / Oxy generators / Oxygen concentrators / Liquid Oxygen for medical use or providing services (viz. transportation, storage, refilling, etc.) which are directly related to supply of such items to the customers.
2. Purpose of loan	To acquire equipment/P&M/other assets including purchase of material
3. Quantum of Loan	Maximum `200 lakh
4.  Security/documentation	I. Existing SIDBI customers:
	For Term Loans A.    Charge on the assets acquired / to be acquired under the scheme. B.    If minimum ACR is not achieved, CGTMSE cover for eligible customers may be taken or any other security to ensure ACR. For WCTL C.    Amount equivalent to 25% of our WCTL, kept as cash collateral. SIDBI FD or other forms of cash collateral such as surrender value of valid LIC policies etc. may be accepted.
	II. New to SIDBI customers:
	For Term Loans
	A.    Exclusive first charge by way of hypothecation on assets acquired out of our assistance. B.    CGTMSE cover or any other security as decided by the BO/BCC. For WCTL C.    Exclusive/first/first pari-passu charge on current assets financed (as may be feasible) Obtain NOC from other WC banker for creation of charge on current assets shall be mandatory. In case of non-availability of NOC, charge on alternate assets may be taken depending upon  availability  of unencumbered / other assets to meet ACR requirements. D.    Amount equivalent to 25% of our WCTL, kept as cash collateral. SIDBI FD or other forms of cash collateral such as surrender value of valid LIC policies etc. may be accepted.
5. Repayment	TL – Generally, repayment period shall be 03 years, including maximum moratorium period of 01 year. Repayment tenure may be extended upto 5 years on case to case basis based on merit of the case.   WCTL – Repayable in 12-18 months including suitable moratorium.
6. Rate of Interest	Repayment period upto 3 years 4.50% p.a. to 5.50% p.a. Repayment period more than 3 years 5.00% p.a. to 6.00% p.a. Wherever CGMTSE cover is stipulated, CGTMSE charges shall be borne by SIDBI.

Gujarat has introduced several new assistance for the Research and development activities in the industrial units. This scheme will assist several Researcher units to prepare a proper platform in terms of development. Everything that comes under “Atma Nirbhar Bharat” will boost many companies and institutions using their research activities in Gujarat. They will get a direct benefit from the Gujarat Government under the latest Industrial Policy 2020. The new industrial policy is a game changer for several research units to enhance the development process in the industries.

This assistance will establish Gujarat as the industrial unit in the whole country and enhance the research activities. A committee set to consider several research and development teams’ applications and provide the necessary tools to create engaging things to invent new things. This assistance will come into force from 07.08.2020, which will remain active for up to five years.

Now let’s discuss different assistance schemes under this policy to strengthen the research and development institutions and units.

Assistance to Establish Research and Development Centers.

Multiple institutions that have the recognition of CSIR or DSIR bodies to be development centers. The institutions have the registration as a proprietorship or partnership firm. These institutions have to maintain their research activities on a large scale.

Activities that are eligible to be part of the assistance

• R&D sectors with the main aim of performing scientific research in industrial units and other developments.
• If a product development sector is there, establishing will have to perform the objectives to improve design and process.

These institutions will get the assistance of 30% in the investment of machinery, hardware, and other equipment that will be part of development. The assistance will be of a maximum of 5 crores, where the activities have to be done during the scheme.

Assistance to the Contract-Based Research Works.

If the eligible institutions will propose any research that can prepare some research in the business’s industrial units. Any activity that comes under SLEC will come under this scheme, and the activities will get the direct benefit from the Government of India.

Institutions that are eligible in the scheme.

• Any institution that is recognized by CSIR/DSIR and performing resear4ch and development tasks.
• The Government approves those institutions of Gujrat or the Government of India.
• Institutions that are approved by AICTE in the field of research and development and autonomous colleges will also come under this scheme.
• SLEC institutions can also be the part of these schemes to enhance the research activities.

Assistance to the Industrial Units to Establish the R&D Units in the State.

CSIR/DSIR approved institutions will be eligible to be part of the assistance. R&D institutions that are established or set up will get complete assistance from the Government of Gujarat. After submitting the proposal, the SLEC will scrutinize the applications to find the eligible institutions recommended by the Government.

R&D laboratories will be eligible to become part of this assistance working in the enhancement of industrial research.

The Government will give 60% project cost, and these laboratories will benefit from the assistance.

Conditions for the Industrial Research Assistance.

• Any industry that is applying for the assistance should be registered under the applicable act.
• These institutions should get the approval of CSIR or DSIR to be part of this scheme.
• The applications should be submitted to the Industrial Commissionerate by attesting to DPR with the application and approval letter from the DSIR/CSIR.

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We all know about the most industrialized state in India. That is Gujarat. The government of Gujarat always does some better things for entrepreneurs and businesses to enhance their motivation and also increase production. There are several steps that the government regularly takes to enhance production in the state.

There are several sectors in the industrial policy that get multiple benefits, and the same as those industries, the large industries, and thrust sectors will get an extra benefit for the businesses to increase the production.

The capital subsidy is decided by the MSME department that is a group of some government officials, which strengthens the MSME businesses and new entrepreneurs.

Large industries are the key role players in the industries of a definite area. The large-scale industries not only increase the revenue for the government, and they also use high-end technologies in the businesses. They generate ancillary industry near them to multiply the employment and increase the use of the latest technologies. Gujarat is the only state in India that can attract investors from every part of the world.

To strengthen the AtmaNirbhar Bharat, the Gujarat government has introduced 15 thrust sectors that will be segregated into two different sectors.

Now let’s discuss the 15 thrust sectors and their groups in which they are kept.

Let us understand the thrust sectors first. A thrust sector is the heaviest sector in the industrial groups. Several potential industries are there in the thrust sectors, and they require external support to empower the industries globally.

15 industries come under thrust sectors. The Gujarat government will provide some additional subsidies to these industries to empower the thrust sectors. Let us understand the several groups that come under the Thrust sectors.

• Electrical Machinery and equipment.
• Industrial Machinery and equipment.
• Auto and auto components.
• Technical Textiles.
• Agro and food processing.
• Pharmaceutical and Medical devices.
• Gems and Jewelry.
• Industrial 4.0 manufacturing.
• Electric Vehicles and their components.
• Waste management projects.
• Green Energy.
• Eco-friendly compostable material.
• 100% export-oriented units.

Eligibility for subsidies

• A new industry or an existing one will be eligible for the subsidy when there is an expansion in or diversity in the commercial production during the operative period of the scheme.
• Any industrial undertaking that is availing any offer from the state government not to be eligible for the subsidies. Also, the state or national agency cannot avail of the services.

The investment period for conjuring the industry
During the operative period of the scheme, the industry has to show the enhancement in the production.

The board will consider the investment period from the announcement of industrial policy, i.e. 07/08/2020. Also, there is an extension for these industries.

• MSME projects: 12 months from the date of commercial production.
• Cross capital investment up to 1000 crores: 18 months from the date of commercial production.
• Cross capital investment up to 5000 crores: 24 months from the date of commercial production.
• Cross capital investment up to 10000 crores: 30 months from the date of commercial production.
• Cross capital investment above 10000 crores: 36 months from the date of commercial production.

Industries will get the incentives based on their production rate, where they will get direct benefits from the government.

How to register your business?

The eligible industry can register for the GR within the date of commercial production. These businesses have to submit the letter in the format to the industrial commissioner.

The documents need to be attested with the application. The crucial documents are:

• Registration certificate of the industrial undertaking and also, the industrial entrepreneur memorandum, or says UdhyogAadhar registration certificate issued by the Government of India.
• Legal documents of the land where the business is established are crucial to attest with the application.

After the registration, the sanction committee will inspect the business, and then you will get the benefits of the industrial policy directly.

Quantum of Incentive :

An eligible industrial undertaking will be for capital subsidy according to the classification of Talukas as under:

Taluka Category	General Sectors	Thrust Sectors
Category 1	10 % of eligible Fixed Capital Investment (excluding Land)	12 % of eligible Fixed Capital Investment (excluding Land)
Category 2	8 % of eligible Fixed Capital Investment (excluding Land)	10 % of eligible Fixed Capital Investment (excluding Land)
Category 3	4 % of eligible Fixed Capital Investment (excluding Land)	6 % of eligible Fixed Capital Investment (excluding Land)

The eligible subsidy will be given over a period of 10 years from the Date Of Commence of Production (DOCP) in equal annual instalment subject to an annual ceiling of Rs. 40 Cr.