Haryana is one of the emerging leaders in terms of commercial production and a major contributor in export as well. From passenger cars, two-wheelers, mobile cranes, tractors in the automobile sector to becoming the 2nd largest of food grains and its export. The Micro, Small and Medium Enterprises (MSME) sector is considered as a model that focuses on the socio-economic growth of the Indian economy. The sector provides a sizeable share of employment opportunities, especially for the agriculture sector. As per the MSME annual report for 2016-17, the contribution of this sector is around 6% of the country’s GDP. Along with this 45% of the exports, and 33% of the manufacturing output.
The industrial transformation has been possible specifically due to the manufacturing and tertiary sector. This has, in turn, led to the Haryana’s economic growth. The state is the leading state in terms of manufacturing GSDP contribution which is higher than the national average. Especially, the states like Gujarat and Maharashtra are gradually becoming the tough competitors to Haryana. Not just limited to the manufacturing, the tertiary sector – real estate, professional services, finance, defense, public administration, and other services have also contributed much to the economic growth.
The industrial growth in the state could not have been possible without the support of globalization of markets, flexible economy and infrastructural creations. Since 57% of the state area falls under the National Capital Region (NCR) with 21 national highways and well-connected rail and land transportation routes has given a competitive edge to the State. With the introduction of the Haryana Enterprise Promotion Policy (EPP), 2015 has benefited the state by supporting the manufacturing and services enterprises with a transformational roadmap. The number of efforts been put up on the regulatory schemes and policies by the government shows the enthusiasm and growth-oriented approach of the State. The government bodies are working hard in improving the ease of doing business in the State.
Investment in industrial units, machinery and the equipment required is what categorizes an enterprise into micro, small and medium enterprises. The categorization is as follows:
In Manufacturing the investment (in plant and equipment):
Micro Enterprises: should not exceed 25 lakh rupees
Small Enterprises: should be more than 25 lakh rupees but does not exceed 5 crore rupees
Medium Enterprises: should be more than 5 crore rupees but does not exceed 10 crore rupees
In the Services Sector the investment (in equipment):
Micro Enterprises: should not exceed 10 lakh rupees
Small Enterprises: should be more than 10 lakh rupees but does not exceed 2 crore rupees
Medium Enterprises: should be more than 2 crore rupees but does not exceed 5 crore rupees
Haryana enjoys more than 1 lakh MSMEs with a total investment of more than 20,000 crore rupees. This has generated more than 10 lakh jobs for the state with the majority of being placed in automobiles, food & beverages, textiles, engineering, and the metals sector. The constant efforts and initiatives of the government have made it possible for them to lead national industrial projects like Amritsar-Kolkata industrial corridor, Kundli-Manesar-Palwal global corridor and etc. Along with this in order to provide a conducive industrial environment, the government has set up co-work spaces, incubation centers. The recent “Haryana MSME Policy 2019” aims to give a boost to the MSME sectors.
Haryana has always been the front-runner in agriculture and industrial development in the country. The state is considered a leader in planned industrial and urban growth as compared to other major states. The Enterprise Promotion Policy has brought a revolutionary transformation in the commercial sector of Haryana. The prime focus of the policy is to give a platform to developers, consumers, and others in which ease of doing business could be improved. The highlights of the policy have been NIRBAADH (New Industrial Regulation By Automatic Approval and Delegation in Haryana) and PRANETA (Professionals & New Entrepreneurs Tax Assistance).
The vision of this policy is to make Haryana as the perfect destination for investment in industrial, regional and sustainable development. This can only be possible with the support of all departments of the state, adoption of technology and innovation and skill development and also by promoting entrepreneurship which further generates employment opportunities. While ease of doing business and infrastructural development majorly support the development of any industrial sector but incentives provided to the investors is of equal importance. The reduction in the cost of doing business helps for sustainable and competitive industry growth. Few of these incentives provided by the government of Haryana for Ultra Mega, Megaprojects and MSMEs are as follows:
Subsidy in VAT\GST – The state provides investment subsidy across different sectors Micro, Small, Large and Megaprojects. This is in lieu of net VAT\SGST paid through the internet to reduce its transaction cost.
Interest Subsidy – The small units are unable to set up, expand and utilize modern techniques due to the high cost of capital. It becomes unaffordable for enterprises to meet the modern age competition. The government provides interest subsidy for Micro and Small units which provide alternate opportunities for employment in rural areas. This will help the units to scale up, grow in size and improve the manufacturing process by using high-tech equipment which further reduces the cost of production.
Contribution to fund for MSE – The government of Haryana shall contribute an amount of 100 crore rupees in the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). This will open up new opportunities for the upcoming and existing Micro and Small enterprises for availing collateral-free loans from lending institutions.
Employment Generation Subsidy – Various incentives will be provided for the MSMEs which generate employment for the regional people. The government will provide financial support and procurement reservation schemes for the enterprises.
Encouraging Start-Ups – The first generation entrepreneurs will be offered a special refund package of 100% VAT\SGST up-to turnover of 3 crore rupees. Further, special provisions are created and incentivized for the incubation centers, warehouses, mobile development centers and etc.
Relief for the industrial plot – The government has decided to exempt the industrial plot holders with no enhanced compensation in the future. The land cost will also get impacted by way of reduced EDC charges i.e 50% and Stamp duty refunds i.e 50-100%.
The state government is committed to promoting the MSME sector by providing support and schemes by all possible means. The aforementioned incentives just show the planned goal of the government to become the leader in the industrial sector.