Telangana to have dedicated parks, special fund for MSMEs

Hyderabad, Sep 18 (IANS) Dedicated industrial parks for Micro, Small, and Medium Enterprises (MSMEs), improving access to sources of credit, a special fund for technology transfer and modernisation, and enhancing market access are some of the key highlights of the new policy announced by the Telangana government on Wednesday for MSME sector.

The government has earmarked Rs 600 crore over the next five years to support these initiatives for MSMEs.

The policy envisages 40 measures to offer end-to-end support from the startup to the sales phase. The government proposes to establish an MSME wing to provide 24/7 dedicated support to MSMEs while a high-level steering committee under the state leadership will monitor the delivery of commitments and set policy direction.

Chief Minister A. Revanth Reddy unveiled the MSME policy in the presence of Deputy Chief Minister Mallu Bhatti Vikramarka, Industry Minister D. Sridhar Babu, and top officials and representatives from various industry bodies.

The policy is designed to achieve inclusive and diverse employment, equitable growth scale-based graduation, technology degradation, and improved productivity.

The government hopes to develop inclusive businesses that create opportunities for all regardless of identity, integrate technology to usher in the era of ‘Industry 4.0’, and unlock growth for the MSME ecosystem in the state.

To accelerate the growth of MSMEs, the government has identified six thrust areas for improvement – improving availability, accessibility, and affordability of land; facilitating access to finance; ensuring easy access to raw materials; improving flexibility in labour markets; encouraging adoption of technology; and enhancing access to markets. It is proposed to enhance state infrastructure through dedicated MSME parks and private flatted factories, offer fiscal support especially to SC/ST and women-owned MSMEs by increasing the incentives offered under other industrial policies, improve access to traditional and alternative sources of credit, develop best-in-class testing centres and warehousing facilities in the state, expand the pool of skilled workforce, earmark a special fund for technology transfer and modernisation in the MSME sector, enhance market access by incentivising local procurement and increased e-commerce participation and improve ease of doing business in the state.

For each industrial park that the government plans to build, 20 per cent of it will be reserved for MSMEs. The government proposes to develop one industrial park in each district in the next five years.

It will also construct 10 industrial parks between the Outer Ring Road and the Regional Ring Road. Out of these, five will be MSME parks and in each, 5 per cent of plots will be reserved for women entrepreneurs and 15 per cent of plots will be reserved for SC/ST entrepreneurs.

Out of five MSME parks, one will be exclusively for women-owned MSMEs and one park will be built exclusively for innovative startups.

Since 2014, MSMEs in Telangana have shown a positive trend of formalisation as annual registrations on the TG-iPASS portal have increased by 11-15 per cent annually. MSMEs have seen a rise in average investment from Rs 1 crore in 2018 to Rs 2.15 crore in 2022.

In 2015, the National Sample Survey estimated 26 lakh MSMEs to be operational in Telangana. About 8.9 lakh MSMEs have received Udayam registration since 2020. Around 22,000 approvals for new MSMEs have been issued under the TG-iPASS regulation since 2014. Services in Telangana account for nearly 33 lakh jobs.

In food processing, the number of jobs is 10.10 lakh. Mineral bases and wood-based industries employ 4.44 lakh people. The policy paper notes that MSMEs continue to face challenges with formalising and graduating in size over time. As per estimates by NSSO, 65.7 per cent of all MSMEs in the state are yet to be formalised. The state continues to have a limited number of medium-sized enterprises. Between 2016 and 2023, medium-sized enterprises constituted only 2.9 per cent of all manufacturing MSMEs and 3.5 per cent of all service MSMEs registered on the TG-iPASS portal.

The policy facilitates Self-Help Groups (SHGs) to transition from SHGs to MSMEs by providing end-to-end support structures and seeks to strengthen Telangana‘s place as a leading exporter in the country with an emphasis on import substitution.

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