Author: Debashis Bandyopadhyay

The MSME Policy announced by the Uttar Pradesh Government recently provides for quite a few innovative solutions to the crucial problems faced by the MSMEs of the state. The most important may be allocation of Gram Sabha land for setting up of industrial estates. Availability of land as well as sky rocketing of land prices are the twin challenges in further industrialisation of the state.

Land is essential for setting up of new units or expansion of existing units and the twin problems are making any new project unviable from the day one. Even the limited plots available in the Government sponsored industrial estates are too costly for a conventional brick and mortar factory, the backbone of MSME development.

The Gram Sabha lands all over the state are lying fallow and mostly illegally occupied for making unauthorised housing. Availability of the Gram Sabha land at reasonable cost will not only help in setting up of new industries, but will also provide rural youth jobs near home and stopping them moving to cities.

However, some minor modifications and amendments in the policy are needed if the Government is really interested in utilisation of Gram Sabha land for starting rural industries.

The policy mentions at one section that Gram Sabha land above 5 acres will available for starting industrial estates but in another section it is mentioned that private entrepreneurs will be allowed setting up of estates of at least 10 acre areas.

In this case the entrepreneur will have to buy private land at market rate adjacent to the Gram Sabha land of 5 acre if released, which will again make the project unviable. So, it will be justified to scale down the minimum area for privately promoted industrial estates to 5 acres when Gram Sabha land is released for the project. Only this initiative, if implemented in letter and spirit will jumpstart the growth of rural MSMEs in Uttar Pradesh.

Disclaimer: The writer is a retired industrial advisor to Government of India. Views are personal.