MSMEs to get 12% interest subsidy under Bihar Industrial Investment Promotion Policy

Patna, Aug 31 (KNN) The Bihar state cabinet has approved the Bihar Industrial Investment Promotion Policy 2016, where micro, small and medium enterprises (MSMEs) will be entitled to 12% interest subsidy. It will also provide 10% interest subvention to priority sector investors besides 80% tax reimbursement for five years.

"The policy is scheduled for a period of five years (from 2016 to 2021) and will be effective after its notification on September 1. Earlier, many sectors such as tourism, information technology (IT), food processing etc had different policies. Now, all will come under one policy," State Industries Department Principal Secretary S Siddharth said on the side-lines of the cabinet meeting.

A preferential purchase policy for MSMEs is also included in the new policy under which contractors have to procure at least 15% items from local manufacturers, if any local MSME bidder is within 15% of the lowest bidder, they will get 15% of the order and the turnover and age of firm criteria has been relaxed by 50% for local MSMEs. The state government will also prepare a list of products which will be purchased only from MSMEs in Bihar.

Siddharth informed that the policy is broadly categorized into priority and non-priority sectors. Ten sectors — food processing, tourism, small machine manufacturing, IT (also enabled services and electrical and electronic hardware manufacturing); textile, plastic and rubber industry, renewable energy, healthcare, leather and technical education — have made it to the priority list.

"Everything else will be in non-priority sector," Siddharth said.

Siddharth said old units, which were approved by competent authority but are not complete, will get the benefits of the old policy only if they are finished till March 2017 as per their DPRs. The provision for sick industries remains the same as per the old policy for MSMEs.

For private industrial parks, a minimum of 25 acres of land is mandated in the policy while it is 3 acres for IT Park. The interest subsidy for these is also 10% with a capping at 30% of the total investment cost or Rs50 crore, whichever is less. (KNN Bureau)