(Amended as of September, 2023)

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 Government of Madhya Pradesh

Madhya Pradesh
MSME Development Policy, 2021
(Amended as of September, 2023)

Department of Micro, Small and Medium Enterprises

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 INDEX
No. Subject Page No.

1. Introduction 1
2. Objectives of MSME Development Policy 2
3. Policy Focus Area 2
4. Operative period of the Policy and work areas 3
5. Enabling framework : Ease of doing business 3
6. General provisions for availing concessions 6
7. Concessions 7
8. Expansion/Diversification/Technical up-gradation 15
9. Creation and maintenance of improved infrastructure facilities 15
10. Capacity Strengthening 16
11. Revival of sick units 17
12. Amendment /relaxation /cancellation 20
13. Jurisdiction 20
14. Glossary 20
15. Specific financial assistance for manufacturing units of furniture & 23
toys and related value chain products
Annexure - I List of ineligible industries 28
Annexure - II Special Package to Power looms Sector 30
Annexure - III Special Package to Pharmaceutical Sector 31
Annexure - IV Special Package to Apparel Sector 32
Annexure - V Special Package to Food Processing Units 35
Annexure - VI Special Package to Textile Units 37

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 Government of Madhya Pradesh
Department of Micro, Small & Medium Enterprises

M.P. MSME Development Policy, 2021

(Amended as of September, 2023)

1. Introduction
Micro, Small and Medium Enterprises (MSME) sector is considered engine
for socio economic growth in the country and is fast emerging as the most vibrant
and dynamic sector of the Indian economy. MSMEs provide the largest share of
employment after primary sector. We are aware that, employment generation is
one of the main challenges faced in the country today. This makes development
of MSME sector most crucial. The Government of Madhya Pradesh (GoMP)
recognizes this aspect and accordingly, is giving priority to the development of
the MSME sector in the state.
Considering the significant role of MSME in employment generation and
economic and social development, and knowing the fact that MSME sector is one
of the key drivers for transition from an agrarian economy to an industrialized
economy, the state has decided to give special attention to this sector. To fulfil
this objective, a dedicated department has already been created for MSMEs.
Department of MSME, GoMP is playing a pivotal role in enhancing the
state’s MSMEs competitiveness. MSME Department is proactive in providing
conducive ecosystem for MSME development through various schemes and
initiatives. MSME Department intends to take multi-pronged initiative to create
a supportive and enabling ecosystem for establishment and growth of MSMEs in
state.
Department of MSME, GoMP has taken several steps to derive maximum
benefits for MSME sector out of the policy initiatives at the central and state level.
The state government has also taken progressive steps towards improving Ease
of Doing Business. The state also has its own Start Up policy for promotion of
startups and incubators.

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 Madhya Pradesh Government has been supporting entrepreneurs/Self-
Employment beneficiaries by providing an enabling environment for job
creation and entrepreneurship. Department of MSME, Government of Madhya
Pradesh run various flagship scheme for employment generation and promotion
under which there is provision of interest subsidy and margin money support on
capital investment.
The department stands committed to the Initiatives of Government of
India (GoI) and assure that it is in the process of developing a vibrant MSME in
the state. With this commitment, Department has decided to evolve a dedicated
"M.P. MSME Development Policy 2021". It touches upon all those aspects which
leads to the focused growth of the MSME sector in the state. The policy has been
drafted through a consultative process after taking opinions and suggestions of
all stakeholders including Industry Associations, Financial Institutions, Experts
and related Government Departments.
2. Objectives of MSME Development Policy
The key objectives of the MSME Development Policy 2021 are :-
(i) Achieving the State’s goal of overall industrial development and
MSME competitiveness
(ii) Creating enabling infrastructure
(iii) Providing a conducive ecosystem and promoting inclusive growth for
MSMEs.
(iv) Providing an opportunity to young entrepreneurs through instilling
employment generation
3. Policy Focus Area
To achieve the objectives, this Policy is focused on following six pillars :-
(i) Enabling framework: Ease of doing business
(ii) Procedural reforms for release of concessions to eligible MSME units
(iii) Creation and maintenance of improved infrastructure facilities
through private developers
(iv) Infrastructure development on PPP Model

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 (v) Procedural assistance through online services
(vi) Time bound delivery of services & assistance.
4. Operative period of the Policy and work areas

4.1 This Policy shall come into effect from the *date of notification.
4.2 This Policy will remain effective till the time it is replaced by the
new policy.
4.3 MSMEs in the manufacturing sector which start commercial
production on or after the date of notification of the policy will be
eligible to get assistance under this Policy. Such manufacturing
MSMEs which have started commercial production on or after
01.07.2020 but before the date of notification of this Policy and
invested more than Rs. 10 crores & up to Rs. 50 crores in the plant
& machinery, will be eligible to receive assistance under the earlier
relevant policies. It is clarified that such units will not be eligible for
assistance/facilitation under this Policy.
For new manufacturing units, which will start production on
or after the date of notification of this Policy, the option of availing
facilities/assistances under the earlier incentive schemes will not
be available. However, the existing MSMEs in the manufacturing
sector undertaking expansion/diversification/technological
upgradation during the effective period of this Policy will be eligible
for assistance/facilities equivalent to a new industrial unit on the
additional eligible investment made by them, if the unit remains in
the eligible MSME category after such investment.
5. Enabling framework : Ease of doing business
5.1 Improving business climate by enhancing ease of doing
business
The Government of MP has taken various initiatives to improve the

* Notified by Government of Madhya Pradesh Gazette dated 13 August, 2021

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 business environment in state by continuing to bring in regulatory
reforms and simplify procedures for the promotion and
development of MSME in the State. GoMP shall continue to take new
initiatives to improve the services provided by the government to
MSMEs for doing business in the State. The DoMSME has taken up
following steps to improve the business climate for MSMEs in the
State :-
(i) Departmental concessions are now being extended through
online process. Procedure has been simplified.
(ii) The land allotment process for MSMEs has been made online.
(iii) New Store Purchase Rules are being formed to increase the
MSME supplier base of the government departments and
expedite the procurement process from the MSME suppliers.
(iv) The renewal process of various licenses of different
departments shall be simplified for MSMEs.
5.2 MSME Business Facilitation Cell
In order to facilitate/support MSMEs, office of Industries
Commissioner has constituted a cell. Through this cell support
consultants have been deputed across the state at DTIC offices to
extend handholding support to the MSMEs.
5.3 Institutional Measures for Grievance Resolution
In order to address the grievances of State's MSMEs regarding their
payment issues, GoMP has constituted a Madhya Pradesh MSE
Facilitation Council (MSEFC) as per the MSMED Act 2006, which is
functional in its full spirit.
5.4 District Level Assistance Committee
Under the provisions of this Policy following committee at District
level under the chairmanship of District Collector will be
responsible to extend the concessions to the eligible MSMEs
investing upto Rs. 10 Crores in plant & machinery :-

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 1. District Collector - Chairman
2. Lead District Manager - Member
3. General Manager - Member Secretary
District Trade & Industries Centre

The District Level Assistance Committee will also have the

authority to approve reimbursement of expenditure incurred in the
development of flatted industrial complex and industrial
area/cluster with a minimum area of 5 acres and less than 10 acres.
*5.5 State Level Empowered Committee
Under the provisions of this Policy, the State Level Empowered
Committee constituted as follows, under the chairmanship of the
Chief Secretary, will be authorized to approve concessions [except
reimbursement of expenditure incurred in infrastructure
development up to industrial premises and setting up of of Effluents
Treatment Plant (ETP)] to eligible MSMEs investing more than Rs. 10
crores and up to Rs. 50 crores in plant and machinery -
(i) Chief Secretary - Chairman
(ii) Principal Secretary, Commercial - Member
Tax Department
(iii) Additional Chief Secretary/Principal - Member
Secretary, Finance Department
(iv) Principal Secretary, Energy - Member
Department
(v) Principal Secretary/Secretary, - Member
Department of Micro, Small &
Medium Enterprises
(vi) Industries Commissioner - Member Secretary

* Substituted as per Order No. F 5-21/2019/A-73, dated 13.09.2023 of Department of

Micro, Small & Medium Enterprises

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 The State Level Empowered Committee shall also have the
power to sanction reimbursement of expenditure incurred on
development of industrial area/cluster having an area of 10 acres or
more.
5.6 Internal committee for scrutiny
After eligibility assessment (rates of facilities, eligibility period and
subsidy limit) by the State Level Empowered Committee,
disbursement of assistance to the unit will be done by the Industries
Commissioner, M.P. on the basis of the scrutiny report of the internal
committee of Directorate of Industries, M.P. This committee will keep
in view the fair distribution of financial assistance. The constitution
of the committee will be as follow:
1. Joint/Deputy Director, Financial Assistance Section
2. Joint/Deputy Director, Finance
3. Deputy/Assistant Director, MSME Section
4. Deputy/Assistant Director, Infrastructure Development Section
5. Assistant Director, Financial Assistance Section

Industries Commissioner, M.P. will also be empowered to

sanction reimbursement of expenditure incurred in infrastructure
development up to industrial premises and for setting up waste
treatment plant (ETP) to eligible MSMEs investing more than Rs. 10
crores and up to Rs. 50 crores in plant and machinery.
6. General provisions for availing concessions
6.1 The concessions are not applicable for units which come under the
category of ineligible industries as mentioned in the Annexure – I
6.2 In view of providing employment to the permanent residents of
Madhya Pradesh, the conditions provided under the MSME
Development Policy 2019 for units investing up to Rs. 10 crores in
plant and machinery and the conditions provided under the

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 Industrial Promotion Policy 2014 (as amended, 2020) of the
Department of Industrial Policy and Investment Promotion for
units investing more than Rs. 10 crores in plant and machinery will
be mandatory to comply with.
6.3 The procedures for availing concessions will be detailed out in
MSME Promotion Scheme 2021 in which detailed information of
procedures, eligibility criteria, required documents for availing
subsidy/incentive, limit of total assistance and terms & conditions
for beneficiary units etc. will be included. Above scheme will be part
of this Policy.
6.4 Established units with capital investment of more than Rs. 10
crores and up to Rs. 50 crores in plant and machinery, who have
been sanctioned the facilities as per eligibility under Industrial
Promotion Policy, 2014 (as amended, 2020) and Madhya Pradesh
Investment Promotion Scheme 2014 (including amendments) of
Industrial Policy and Investment Promotion Department for
providing assistance under provisions of that Policy by the State
Level Empowered Committee till the date of issue of notification,
will continue to get the benefits for the prescribed time period as
sanctioned earlier, from the Department of Industrial Policy and
Investment Promotion.
7. Concessions
7.1 Industrial Development Subsidy
7.1.1 Industrial development subsidy will be provided as follows for
a new industrial unit investing up to Rs. 10 crores in plant and
machinery :-
7.1.1.1 Industrial development subsidy to the new industrial
units @ 40% on the eligible investment made by them
in Plant & Machinery and building. This assistance
shall be disbursed in 4 equal annual installments.

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 7.1.1.2 The cost of building shall not be more than 100% of
the cost of Plant and machinery for the purpose of
calculating the assistance.
7.1.1.3 Additional Industrial Development Subsidy of 2% per
year (for four years) for unit set up by women/SC/ST
entrepreneur(s) or 2.5% per year (for four years) for
unit set up by women entrepreneur(s) of SC/ST
category; and
7.1.1.4 Additional Industrial Development Subsidy of 2% per
year (for four years) to the industrial units for
exporting more than 25% and upto 50% of their total
sales;
or
Additional Industrial Development Subsidy of 3% per
year (for four years) to the industrial units for
exporting more than 50% of their total sales.

7.1.2 Industrial development subsidy will be provided as follows for

a new industrial unit investing more than Rs. 10 crores and Rs.
50 Crores in plant and machinery :-

7.1.2.1 This subsidy will be disbursed in 7 equated annual

installments. Assistance will be determined in five
phases as follows -
7.1.2.1.1 Annual Assistance = Yearly Basic Assistance
X Gross Supply Value Multiple X Yearly
Employment Multiple X Yearly Export
Multiple X Geographical Multiple
7.1.2.1.2 Basic Assistance will be calculated as
follows:

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 Basic Assistance =
IF(PM&B>1500,150, MIN (IF(PM&B<11,
0.4*PM&B, MIN(4+0.098*(PM&B-10)+
PM&B/(10.88)* MAX(1- PM&B/1490,0)+
7.2*(1- PM&B /1500), 0.4* PM&B)), 150))
7.1.2.1.3 Basic Assistance for food processing
industries = 1.5 X (Amount calculated as
per clause 7.1.2.1.2)
7.1.2.1.4 It is clarified here that in any condition basic
assistance for all sectors of industries shall
be limited to maximum Rs. 150 crores. In
other words, if the result of calculation of
clause 7.1.2.1.2 and 7.1.2.1.3 is more than
Rs. 150 crores, even than the basic
assistance Rs. 150 crores only will be
payable.
7.1.2.2 Yearly Basic Assistance = Basic assistance / 7
If the commercial production commences before 30
September of relevant year, it shall be considered as
the first year for commercial operation date. However,
if the commercial production commences after 30
September of relevant year unit shall be provided an
option to choose current year or next year as their first
year for commercial operation date.
7.1.2.3 Gross Supply Value Multiple
Gross Supply Value Multiple = Minimum (75%,
Actual Gross Supply/ Maximum Gross Supply of
previous year or years)/75%
Gross Supply Value Multiple (GSM) = MIN(75%,
AGS/PPYS)/75%
Peak Previous Year Gross Supply (PPYS)

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 Actual Gross Supply in the Reviewed Year (AGS)
7.1.2.3.1 Maximum GSM value shall be '1'.
7.1.2.3.2 GSM for first year should be '1' provided
utilization of installed capacity is at least
40%.
In case of production is less than 40% of
the installed capacity, the Gross Supply
Value Multiple will be proportionately less
than "1" and the assistance will be
calculated accordingly.
7.1.2.3.3 If the gross supply value in subsequent
years is 75% or more of the highest gross
supply value of the preceding years, the
multiple will be treated as "1". If there is a
reduction in the gross supply value by
75%, the amount of investment incentive
assistance will be reduced
proportionately.
7.1.2.3.4 In the calculation of investment incentive
assistance under expansion, considering
the total production capacity of the
original and expanded unit as installed
capacity, the Gross Supply Value will be
determined on the basis of the above.
7.1.2.4 Export Multiple -
7.1.2.4.1 Export units on export of atleast 25% to
75% of their production shall be eligible
for Investment Promotion Assistance in
the range of 1.0 to 1.2 over and above Basic
Investment promotion assistance.
Export Multiple (EM) = IF [Export

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 Value/Production Value < 25%, 1, IF
{Export Value/Production Value < 75%, 1
+ 0.2*(Export Value/Production Value -
25%)/50%, 1.2}]
Export Value – Value of exports Rs. in
Crores
Production Value – Value of total
production Rs. in Crores
7.1.2.4.2 If export value is less than 25% of
production value, Export Multiple (EM)
will be 1. For export value of 25% to 75%
of production value, Export Multiple (EM)
will range from 1.0 to 1.2. For export value
of more than 75% of production value,
Export Multiple (EM) will be 1.2.
7.1.2.5 Employment Multiple -
7.1.2.5.1 The employment multiple shall vary from
1.0 to 1.5, based on the employment
generation by a unit in the range of 100
employees to 2500 employees.
Employment Multiple (EYM) =
MAX[1,MIN{1.5,(1+(AE-100)*((1.5-1)/
(2500-100))}]
Average Employees in the Reviewed Year
(AE) = Average employee count of the
company in the reviewed year;
AE will be derived as = Σ (Employee count
at the month end for each month of the
financial year) / 12

7.1.2.5.2 Till 100 employees (AE), EYM will be 1.

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 From 100 to 2,500 employees (AE), the
EYM will increase from 1 to 1.5,
proportionately. For 2,500 and above
employees (AE), EYM is capped at 1.5

7.1.2.5.3 Assistance under expansion/diversification

will be calculated considering employment
multiple as "1" in any case.

7.1.2.6 Geographical Multiple -

Industries setting up in priority blocks, falling under
the districts located in the state, will be eligible for an
additional Investment Promotion Assistance of '1.2'
times and in other blocks located in the district, the
multiple will be considered as '1'.
7.2 Assistance in Quality Certification
7.2.1 The State Government will reimburse 100% of the
expenditure incurred for certification for ISO/BIS/BEE
certificate by a unit investing up to Rs. 25 lakhs in plant and
machinery, subject to a maximum of Rs. 5 lakhs.
7.2.2 For ZED Certification for improving brand recognition of
MSME and reducing effect on environment : GoI provides
assistance @ 80%, 60% and 50% to micro, small and medium
units respectively. GoMP will provide assistance upto 50% of
the balance amount (10%,20%,25% of total cost respectively
to micro, small and medium units)
7.2.3 For obtaining quality certification exclusively for export,
during policy period, which made MSMEs of manufacturing
sector of the state, eligible to export in USA/European
Union/Other OECD countries: Assistance upto 50% of the cost
incurred on obtaining these certifications subject to maximum
limit of Rs. 25 Lakhs.

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 7.2.4 MSMEs, who have commenced production before this Policy
but obtain any of the quality certification mentioned in above
clauses 7.2.1, 7.2.2 and 7.2.3 within this Policy period, shall
also be eligible for reimbursement of assistance as per relevant
clause for that quality certification.
7.2.5 Only units investing up to a maximum of Rs. 10 crores in plant
and machinery would be eligible for the assistance mentioned
in clauses 7.2.2 and 7.2.3.

7.3 Reimbursements for Patents

100% reimbursement to a maximum of Rs. 5 Lakhs to MSME units
for expenditure incurred on patents/IPR registration during the
policy period.

7.4 Financial Assistance for Infrastructure Development

7.4.1 50% of the expenditure on infrastructure development up to
its premises, subject to a maximum of Rs. 25 lakhs shall be
provided to a new industrial unit set up in private or
undeveloped government land with a minimum investment of
Rs. 1 crore and a maximum investment of Rs. 10 crores in plant
and machinery. 50% assistance subject to a maximum of Rs. 1
crore each shall be provided to medium scale MSME units
investing more than Rs. 10 crores in plant and machinery for
developing power, water & road infrastructure.
7.4.2 50% of the expenditure for setting up of Effluents Treatment
Plant (ETP) by MSME units investing up to a maximum of Rs.
10 crores in plant and machinery, subject to a maximum
assistance of Rs. 25 lakhs and 50% of the expenditure incurred
on setting up of waste management, pollution control devices,
health & safety standards and water conservation measures,
subject to a maximum assistance of Rs. 100 lakhs, to a medium
scale MSME unit with an investment of more than Rs. 10 crores
in plant and machinery

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 7.4.3 50% reimbursement up to a maximum of Rs. 100 Lakhs for the
establishment of a Common Effluent Treatment Plant by a
group (minimum 5) of industrial units investing up to a
maximum of Rs. 10 crores (each unit) in plant and machinery.
7.4.4 50% of the expenditure incurred in development to the
developer of industrial area/ flatted industrial complex in the
private sector, maximum assistance of Rs. 250 lakhs provided
that industrial area so developed is at least 5 acres and less
than 10 acres or carpet area of flatted industrial complex
should be at least 10000 sq. ft. and 15% of the expenditure
incurred in establishment/development of industrial
area/cluster of 10 acres or more subject to maximum
assistance of Rs. 5 crores will be made provided to the
developer. In such a developed industrial area/flatted
industrial complex/cluster, it will be necessary to have a
minimum of five working industrial units.
7.5 Financial Assistance for Energy audit
To promote energy efficiencies in MSME units investing up to a
maximum of Rs. 10 crores in plant and machinery, GoMP will
reimburse 50% of the cost of conducting energy audit with maximum
limit of Rs. 50,000 and 25% of the cost maximum Rs. 5 Lakhs for
adoption of equipment and machinery.
7.6 Special Packages
7.6.1 The State Government would provide special package to
Power looms sector as described in Annexure - II.
7.6.2 The State Government would provide special package to
pharmaceutical sector as described in Annexure - III.
7.6.3 The State Government would provide special package to
Apparel sector as described in Annexure - IV
7.6.4 The State Government would provide special package to Food
Processing sector as described in Annexure - V

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 7.6.5 The State Government would provide special package to
Textile sector as described in Annexure - VI
8. Expansion/Diversification/Technical up-gradation
8.1 Existing micro, small and medium industrial units which undertake
expansion will be eligible for assistance/facilities at par with new
industrial units on their additional eligible investment, subject to the
following conditions.
8.2 Existing micro scale industrial units, which invest additional Rs. 40
Lakhs or more in plant & machinery, shall be eligible for
assistance/facilities at par with new industrial units.
8.3 Existing small scale industrial units, which invest additional Rs. 100
Lakhs or more in plant & machinery, shall be eligible for
assistance/facilities at par with new industrial units.
8.4 Existing medium scale industrial units, which invest 30% of existing
investment in plant & machinery or Rs. 10 crores (whichever is less),
shall be eligible for assistance/facilities at par with new industrial
units.
8.5 If any unit move out of the purview of eligible MSME category after
expansion/diversification/technical upgradation, then the unit will
not be eligible for assistance/facilities under this Policy.
9. Creation and maintenance of improved infrastructure facilities
Development of industrial infrastructure with best facilities will surely
boost the MSME growth. The MSME department shall come up with New
industrial Land and Building allotment rules in alignment with this Policy.
Under this :-
9.1 The Department will increase the “Land Bank” of Government Land
for future development of Industrial Areas/Parks/Estate exclusively
for MSME units.
9.2 GoMP shall establish dedicated MSME parks in the districts where
there are ample opportunities for MSME development.

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 9.3 Department will encourage the development of industrial areas in
private sector.
9.4 Special focus and thrust shall be given to creation of flatted structure
in industrial area on PPP mode.
9.5 Online Land Application and Allotment System shall be made easier
and user friendly.
9.6 State Govt. shall come up with new 'Industrial Land Allotment Rules'.
10 percent plots will be reserved in the Departmental industrial area
for the units owned by Scheduled Castes, Scheduled Tribes and OBC
category.
10. Capacity strengthening
10.1 Cluster development
10.1.1 The State Government has adopted the cluster development
approach as a key strategy for industrial & economic
development of MSEs as well as factors which will promote
in establishment of new industrial area in the State.
10.1.2 GoMP will formulate State's own Cluster Development
Scheme for creating the infrastructure (ID) and Common
Facility Centre (CFC) facilities for the MSME clusters spread
over across the state with support from GoI.
10.1.3 A dedicated cluster development cell shall be created to
properly implement the Cluster Development Scheme of
State & GoI. This cell shall be responsible to cater to the needs
of MSME clusters of the State.
10.1.4 Madhya Pradesh Laghu Udyog Nigam will be the nodal
agency for cluster activities in the state.
10.2 Self-Employment
10.2.1 In order to provide the self-employment opportunities for
the youth, the MSME department is presently running
various self-employment schemes, which provide

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 concessions and hand-holding support to young
entrepreneurs.
10.2.2 A new Self-employment scheme with more effective hand
holding support and better incentives shall be initiated.
10.2.3 Beneficiaries of Self-employment schemes shall be given
opportunity to participate in international trade fair/
exhibitions.
10.2.4 Business skills of youth shall be improved through online
EDP module.
10.2.5 In order to support the applicants of self-employment
schemes, a panel of Chartered Accountants (CAs) will be
made at district level.
10.2.6 Additional grant will be provided in self-employment
schemes to SC/ST beneficiaries
10.3 Start-up and Incubation Support
To nurture innovation and start-up ecosystem for young
entrepreneurs in the State, Government of Madhya Pradesh shall
come up with new “MP Start-up Policy”.

11. Revival of sick units

If any sick/closed unit revives during the effective period of this policy,
assistance/facilitation will be provided to such units.
11.1 Assistance for units investing up to a maximum of Rs. 10 crores in
plant and machinery :-
11.1.1 To revive potentially viable sick/closed unit, a package will
be made with the help of Bankers/ Financial Institutions.
11.1.2 The key responsibilities of preparing the revival package
will be Bankers/ Financial Institutions
11.1.3 The Sick Industrial Unit in consultation with Bankers/
Financial Institutions will prepare its proposal for seeking

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 package of concessions and submit it to the Empowered
Committee.
11.1.4 The empowered committee will be set up to decide on
revival package in favour of sick industrial units, under the
chairmanship of Principal Secretary/ Secretary,
Department of MSME. The constitution of the Committee
will be as follows:
(i) Principal Secretary/Secretary, Department of MSME
(Chairman)
(ii) Principal Secretary/ Secretary of the departments
from which concessions/ relief are sought by the sick
units (Member)
(iii) Industries Commissioner, Department of MSME
(Member)
(iv) Zonal Manager of the concerned bank branch
(Member)
(v) Branch Manager/ In charge officer of the Bank/
Financial Institute through which revival package is
proposed (Member)
(vi) Joint / Deputy Director, Department of MSME
(Member Secretary)
11.1.5 Banks/ Financial Institutions will prepare revival package
in favour of viable sick industrial units, in which concession
can be sought from State Govt.
11.1.6 In the revival package prepared by banks/financial
institutions for the revival of sick units, the demand for
facilities being sought from the state government will be
presented before the Empowered Committee and
department facilities or facilities of other departments,
with the consent of the concerned department can be

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 approved by the Empowered Committee in favour of sick
unit on the basis of merits.
11.2 Assistance for units investing more than Rs. 10 crores in plant and
machinery and up to a maximum of Rs. 50 crores :-

11.2.1 The benefit of continuation of earlier sanctioned assistance

shall be provided to restart closed units, after a change in
management, only in case if the production in the unit was
stalled for more than 1 year. The assistance will be
provided to the unit continuously for the same additional
period as the period during which the production was
stopped.
11.2.2 Interest charges on arrears due, till the date of closure,
payable to departments/institutions will be waived off if
the arrears are cleared within 3 months from the
acquisition in a one-time settlement otherwise option will
be made available for clearing such arrears in 6 halves
yearly instalments.
11.2.3 The State Level Empowered Committee would be
competent to sanction the facilities mentioned in the above
clauses 11.2.1 and 11.2.2. The representative of the
concerned department/institution whose arrears are due
will be compulsorily invited in the meeting of the
committee, organized to decide the interest waiver on the
arrears.

11.3 Ineligible industries defined in this policy will not be eligible for the
facilities/incentives provided in clauses 11.1 and 11.2 above.

11.4 If the new investment in plant and machinery is in accordance with

the clause 8 of this policy, the facilities as per eligibility under this
policy shall be provided to the unit as a new unit.

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12. Amendment/Relaxation/Cancellation
Regardless of the provisions under the policy, the Madhya Pradesh
Government, Department of Micro, Small and Medium Enterprises at any
time-
12.1 May amend or cancel this Policy
12.2 May relax the provisions of this Policy
12.3 May issue instructions/ clarifications/guidelines to clarify the
provisions of the Policy.

13. Jurisdiction
In case of any dispute, the court area will be Madhya Pradesh.
14. Glossary

(i) Policy means "M.P. MSME Development Policy 2021''.

(ii) MSME means, micro, small and medium enterprises define under
Micro, Small and Medium Enterprises Development Act, 2006
(with amendments made from time to time).
(iii) Unit/industrial unit means, manufacturing unit of MSME
category in Madhya Pradesh
(iv) Investment in plant and machinery means investment in Plant
and Machinery as per the Micro, Small and Medium Enterprises
Development Act 2006 (with amendments made from time to
time as adopted by the Government of M.P.).
(v) Investment in building means investment in factory buildings &
sheds, which is used for production but shall not include dwelling
units.
(vi) New industrial unit means such manufacturing unit of MSME
category, which are established during the policy period.

20
(vii) Existing industrial unit means, an industrial unit in which
commercial production has started before the date of notification
of this Policy or new industrial units which made expansion/
diversification/technical upgradation during the policy period.
(viii) Women/SC/ST entrepreneur unit means operational unit in
which Women/SC/ST entrepreneur(s) have hundred percent
stake.
(ix) The date of commercial production means after commencing
production date of the first-time sale of the goods produce, which
means the date of the bill date of the first sale.
(x) Quality certification means, ISO certification issued by third
party authorized agencies for quality certification or BIS/BEE
certification or ZED certification or certification exclusively for
export.
(xi) Patent Means, the patent defined under Patent Act, 1970
(including amendments made from time to time) and or
underlying patent.
(xii) Directorate of Industries means the Directorate under the
Department of Micro, Small & Medium Enterprises, Government
of Madhya Pradesh.
(xiii) The State Government means the Department of Micro, Small &
Medium Enterprises, Government of Madhya Pradesh.
(xiv) District Trade & Industries Centre means the district level
office of MSME Directorate under the Department of Micro, Small
& Medium Enterprises, Government of Madhya Pradesh.
(xv) Food Processing industry means such value-added products
prepared after agricultural/horticultural products' processing
(using plant and machinery) being different from their previous
physical form, they also have commercial utility and can be used
as food items. Such as - Ready to Eat or Ready to Cook Foods, Food

21
 Additives, Preservatives, Colours & Fragrances and Milk Based
Value Added Products.
(xvi) Ready-made garments and made-ups mean wearable clothes
or nonwearable clothes, stitched clothes, in which at least two-
ends of clothes have been stitched using a sewing machine.
(xvii) Cluster means clusters as defined in 'Point 2(17) of Appendix-D'
of the Madhya Pradesh MSME Ko Audyogik Bhoomi Tatha Bhawan
Aavantan Evam Prabandhan Niyam, 2021.
(xviii) Developer mean developer as defined in 'Point 2(17) of
Appendix-D' of the Madhya Pradesh MSME Ko Audyogik Bhoomi
Tatha Bhawan Aavantan Evam Prabandhan Niyam, 2021.
(xix) Priority block means such block of the state where no such
industrial unit is established in which investment of more than Rs.
10 crores has been made in the plant and machinery. For this,
priority blocks will be considered as per the list issued by the
Department of Industrial Policy and Investment Promotion in
every financial year.
(xx) Textile Projects means the following industrial units :-
1. Cotton ginning and pressing
2. Silk Reeling and Twisting
3. Wool Scoring, Combing and Carpet Industry
4. Texturizing, Crimping and Twisting of Synthetic Filament
Yarn
5. Spinning
6. Viscose Staple Fiber (VSF) and Viscose Filament Yarn (VFY)
7. Weaving, Knitting & Fabric Embroidery
8. Technical Textile Including Non-Woven
9. Garment / Design Studio / Made-up Manufacturing
10. Processing of fiber, yarn, fabric, garment and made-up
11. Jute Industry

22
*15. Special financial assistance for manufacturing units of furniture
& toys and related value chain products
1. Preamble – Development of Product based clusters is the main
strategy for industrialization and for inclusive development of the
state, creating employment opportunities for the people and
encouraging innovation and entrepreneurship.
2. Objective -

 To create maximum opportunities of direct/ indirect employment

for the youth of the state.
 Establish supply chain and infrastructure in rural and urban
areas.
 Attract large amount of investment in the State.
 Develop quality and value-added products in the state to enhance
the competitiveness.
 Development of service sectors such as logistics and warehousing,
packaging etc. in the state.
 To support the MSME sector, which is the most economically
affected sector by the Corona pandemic.
3. Effectiveness - In line with the Madhya Pradesh MSME Development
Policy, 2021, specific financial assistance for manufacturing units of
furniture & toys and related value chain products and the procedure
contained therefore will be in accordance with the Madhya Pradesh
MSME Incentive Scheme, 2021 issued for the Madhya Pradesh MSME
Development Policy, 2021. The units receiving these specific financial
assistance will not be eligible for the benefit of other provisioned
facilities under The Madhya Pradesh MSME Development Policy,
2021.
Keeping in view the practicability of work in the Department
of Micro, Small and Medium Enterprises, it is also clarified that the

* Added as per order No. 354/2022/A-73, dated 18.05.2022 of Department of Micro, Small
and Medium Enterprises

23
 benefit of the subjected specific financial facilities will be available to
the manufacturing units of Micro, Small and Medium Category
Furniture & Toy and related value chain products starting
commercial production after issue of order to this effect.
4. Details of special financial assistance/concession/facilities –
Eligible manufacturing units of furniture and toy and related value
chain products shall receive the following benefits subject to the
terms & conditions: -
4.1 Industrial Development Subsidy - A maximum of 40% will
be payable on fixed assets such as plant and machinery and
building. The remaining rules and procedures will be as per
Madhya Pradesh MSME Incentive Scheme, 2021.
4.2 Interest Subvention - Interest subvention at the rate of 2%
on term loans taken from banks/financial institutions for the
project for 05 years, maximum limit of Rs. 100 lakhs per
annum.
4.3 Exemption of Electricity Duty - 100% exemption from
electricity duty for 5 years from the date of High-Tension
power connection to all eligible new units.
4.4 Assistance in power tariff - Assistance of Rs. 1 per unit for 5
years from the date of commercial production in the project to
the High-Tension electricity consumers on getting a new
connection to the prevailing power tariff by Madhya Pradesh
Electricity Regulatory Commission. The said assistance will be
in addition to the concession (if any) being given by the
Madhya Pradesh Electricity Regulatory Commission in its
retail tariff order and will be borne by the department from its
own budget.
4.5 Reimbursement of Stamp Duty and Registration Fee – 50%
reimbursement on registration fee and stamp duty paid on
land/bank loan documents for project implementation.
4.6 Incentives on Quality Certification – 25% cost

24
 reimbursement maximum Rs. 10 lakhs, will be provided for all
certificates for obtaining a maximum of 4 quality certificates
from quality certification institutions recognized by the
Central Government and the State Government, i.e. maximum
assistance will be limited to Rs. 2.50 lakh on obtaining a quality
certificate.
4.7 Reimbursement of expenditure on skill development and
training - Permanent residents of Madhya Pradesh will be
reimbursed up to a maximum of Rs. 10,000 per employee for
the employees trained by the unit for skill enhancement in the
first 3 years of commencement of commercial production.
4.8 Employment Generation Subsidy - All new employees,
appointed by the employer during the first three-year period
from the date of commencement of commercial production in
the unit, will be eligible to avail the benefit of assistance of Rs.
5000 per employee per month. The period of assistance will be
maximum 5 years and will be given to a maximum of 200
employees. This assistance will be limited to a period of 5 years
from the date of commencement of commercial production in
the unit. This means that the new employee appointed in the
third year will be eligible for employment generation subsidy
for the next two years from the date of his appointment. The
said assistance shall be subject to the following conditions : -

Sl. Period Minimum Average Percentage of

No. Madhya Pradesh domicile
employees in the unit out of total
number of employees since the
date of commencement of
production in the unit
1. within 1 year 50%
2. within 2 years 75%
3. within 3 years 90%

25
 In case of non-fulfilment of the said condition, the employment
generation subsidy assistance being provided to the unit will
be reduced proportionately.
4.9 Export Support - The unit will be provided upto 1.25 times
eligible industrial development subsidy for exports of more
than 25% and up to a maximum of 50% of the total annual
sales of the products manufactured and upto 1.50 times
eligible industrial development subsidy for exports of more
than 50% i.e. benefit of 10% additional assistance along with
basic industrial development subsidy for exports of more than
25% & up to a maximum of 50% by the unit and benefit of 20%
additional assistance along with basic industrial development
subsidy for exports of more than 50% will be available subject
to conditions. Export assistance will be payable for a
maximum period of 4 years from the date of commencement
of commercial production of the unit. It is clarified that exports
below the prescribed limit of exports in a given year will not
get the benefit of export assistance in that financial year.
4.10 Reimbursement of expenses/charges incurred on
product design/technology transfer - 50% or maximum Rs.
5 lakhs per product design/technology transfer. This benefit
will be available for a maximum of 4 design and technology
transfers. Product Design/Technology Transfer should be
certified from Government of India/State Government
recognized laboratories (NABL accredited)/institutions.
Government of India guidelines will apply to product design
and technology taken from foreign institutions.
4.11 Reimbursement of expenditure for obtaining patent and
design registration - 100% reimbursement to a maximum of
Rs. 5 Lakhs to the units for expenditure incurred on obtaining
national & international patent and design registration on the
product manufactured in the state itself.

26
 4.12 Reimbursement of expenditure for effluents
management/green initiatives
4.12.1 Assistance of 50% of the expenditure incurred for
setting up of Effluents Treatment Plant (ETP) by
MSME units investing up to a maximum of Rs. 10
crores in plant and machinery, subject to a maximum
Rs. 25 lakhs.
4.12.2 Assistance of 50% of the expenditure incurred for
setting up of effluent management, pollution control
equipment, health and safety equipment and water
conservation measures to MSME units investing more
than Rs. 10 crores in plant and machinery, subject to a
maximum Rs. 100 lakhs.
4.12.3 Assistance of 50% of the expenditure incurred by a
group of industrial units (at least 10) for setting up of
Common Effluents Treatment Plant (CETP), subject to
a maximum of Rs. 200 lakhs.
5. Powers of Amendment, Relaxation/Repeal - Regardless of the
provisions under special financial assistance to manufacturing units
of furniture & toys and related value chain products, Government of
Madhya Pradesh, Department of Micro, Small and Medium
Enterprises at any time-
(i) May amend or repeal it.
(ii) May relax the implementation of its provisions.
(iii) May issue directions and guidance with a view to facilitate its
implementation or to remove anomalies and to explain the
provisions contained therein.



27
 Annexure - I

List of ineligible industries

1. Activities pertaining to trading and services

2. Beer and liquor which contains alcohol

3. Manufacturing of all kinds of pan masala and gutkha

4. Manufacturing of Tobacco and tobacco-based products

*5. Products prohibited for manufacturing by Central or State

Government.

6. Industrial units set up by central or state government or their

undertaking

7. Stone crusher

8. Grinding of minerals, Calcination (Excluding manufacturing of

artificial sand from crushed stone)

9. Defaulter of state government/state government undertaking

10. All types of mining activity (where there is no value addition)

11. Manufacturing of Charcoal

* Substituted as per Order No. F 5-21/2019/A-73, dated 13.09.2023 of Department of

Micro, Small & Medium Enterprises

28
 *12. [...............]

13. All type of oil refineries

14. Cement /Clinker manufacturing

15. Publishing and Printing processes of all types

16. Saw milling & planing of wood

17. Pressing of iron/steel scrap into blocks or any other shapes

18. Electricity generation units

19. Package drinking water

20. Sortex plant and Sorting/Grading/Cleaning of crops/grain

**[Provided that except a Sortex plant (including Grading +
Cleaning) established in the premises of a paddy milling unit,
which mainly deals with paddy milling]

21. All types of aerated/ carbonated drinks

22. Slaughter house and industries based on meat

23. Units set up in Special Economic Zone (SEZ)

24. Any industry declared by state government from time to time

with reference to MP MSME Development Policy 2021.

* Deleted as per Order No. F 5-21/2019/A-73, dated 13.09.2023 of Department of Micro,

Small & Medium Enterprises
** Added as per Order No. F 5-1/2019/A-73, dated 02.12.2021 of Department of Micro,
Small & Medium Enterprises and with effect from notification dated 10 December, 2021

29
 Annexure – II

Special Package to Power looms Sector

1. GoMP shall provide 25% of upgradation cost or 100% remaining of GoI’s

financial support after adjustment (if any) whichever is less as financial
assistance for upgradation of plain/semi-automatic shuttle power loom into
modern shuttleless power loom subject to a maximum of 10 looms in a unit
2. Concession @ Rs. 1.50 per unit to the power loom, upto 20HP capacity and
@ Rs. 1.25 per unit to the power loom for above 20HP but upto 150HP
capacity in electricity supply. Also, 100% reimbursement of fixed charges
and difference in minimum charges & actual consumption in electricity
supply for the power loom of upto 150HP capacity.
3. 60% financial assistance up to maximum of Rs. 500 Lakhs to the developers
for industrial area/flatted industrial complex/Cluster for power loom in
private sector.
4. The assistance mentioned in the above points 1 and 2 will be available only
to units investing upto a maximum of Rs. 10 crores in plant and machinery.
5. The unit availing the benefits of this special package will be able to avail
other remaining facilities (which are not of the similar type) declared under
this policy as per eligibility.

30
 Annexure - III

Special Package to Pharmaceutical Sector

1. The cost of building shall not be more than 200% of the cost of Plant and
machinery for the purpose of calculating the Industrial Development
Subsidy.
2. 50% of the expenditure incurred on creating facilities for obtaining
certificate of WHO-GMP or US-FDA certificate for export readiness, would
be reimbursed up to a maximum limit of Rs. 50 lakhs.
3. Assistance @ 50%, maximum Rs. 25 Lakhs to extend support for
establishment of lab equipment & machinery.
4. The assistance mentioned in the above points 1, 2 and 3 will be available
only to the units investing up to a maximum of Rs. 10 crores in plant and
machinery
5. 60% financial assistance up to maximum of Rs. 500 Lakhs to the developers
for industrial area/flatted industrial complex/Cluster for pharmaceutical
units in private sector.
6. Pharmaceutical MSMEs, investing more than Rs. 10 crores in plant &
machinery, shall be eligible to avail a slack period of up to two years from
the date of commercial production in the unit for claiming incentives.
However, the time period for assistance shall remain unchanged for a
period of 7 years.
7. The unit availing the benefits of this special package will be able to avail
other remaining facilities (which are not of the similar type) declared under
this policy as per eligibility.

31
 Annexure - IV

Special Package to Apparel Sector

1. New industrial Readymade garments and made-ups (wearable or non-

wearable fabric, stitched fabric, in which at least two ends of the cloth is
stitched by using machinery) manufacturing units having at least Rs. 1.00
crore and upto Rs. 10 crores invested in plant & machinery & minimum 25
regular employee, will be provided 25 percent of salary of each regular
employee, which is a permanent resident of the state, maximum Rs. 2500
per month, up to an annual limit of Rs. 5 lakhs, for 5 years as a 'Salary grant'.
2. The new readymade garments and made-ups manufacturing unit of MSME
category, in which more than Rs. 10.00 crores have been invested in the
plant and machinery, will be provided assistance/facilities as follows :-
2.1 Interest Subsidy: 5% interest subsidy for 7 years on term loan taken
for Plant & Machinery approved under Amended Technology Up-
gradation funds scheme (ATUFs) of Govt. of India, Ministry of Textile.
2.2 Reimbursement of Training Expense : In view of the requirement of
the technical and skilled employees to textile projects, skill
development and training expenses reimbursement assistance of Rs.
13000 per new employee shall be provided for 5 years. The assistance
shall only be provided to employees' domicile of Madhya Pradesh.
2.3 Employment Generation Subsidy : All the new employees appointed
in the period of first eight years from the date of commencement of
commercial production in the unit by the employer, will be eligible to
receive benefit of an assistance of Rs. 5000 per employee per month.
The assistance period will be maximum 5 years. This assistance will be
limited to a period of 10 years from the date of commencement of
commercial production, which means that the new employee
appointed in the eighth year will be eligible for employment generation

32
 subsidy from the date of appointment for the next two years. The
mentioned assistance will be subject to the following condition:

S. Duration Minimum Average Percentage of

No. Madhya Pradesh domicile employees in
the unit out of total number of
employees since the date of
commencement of production in the unit

1 Within 1 year 50%

2 Within 3 years 75%

3 Within 5 years 90%

On non-compliance of the above conditions, there shall be a

proportionate reduction in the employment generation subsidy being
provided to the unit.
2.4 Reimbursement of Stamp Duty and Registration Fee - Units who take
land on lease in industrial areas established by the State Government
will be reimbursed the stamp duty and registration fee charged on
lease land.
2.5 Concession on Electricity duty : All eligible new units will be provided
electricity duty exemption for a period of 7 years from the date of
taking the electrical connection.
2.6 Concession on Power tariff : Power supply at a fixed rate of Rs. 5 per
unit on any new electrical connection, for 5 years from the date of
commercial production in the unit.
2.7 In addition to the effective rebate on premium of land as per provision
under the Madhya Pradesh MSME Ko Audyogik Bhoomi Tatha Bhawan
Aavantan Evam Prabandhan Niyam, 2021, 50% rebate in the

33
 development fee charged on units will be provided to garmenting units
in case of taking land on lease in industrial area.
2.8 The facilities mentioned in the above points 2.1 to 2.7, will be available
only to the units established in the notified industrial area/cluster
under the Department of Industrial Policy and Investment Promotion
and Department of Micro, Small and Medium Enterprises.
3. 60% financial assistance up to maximum of Rs. 500 Lakhs to the developers
for industrial area/flatted industrial complex/Cluster for Apparel units in
private sector.
4. The unit availing the benefits of this special package will be able to avail
other remaining facilities (which are not of the similar type) declared under
this policy as per eligibility.

34
 Annexure - V

Special Package to Food Processing Units

The new food processing unit, in which investment of more than Rs. 10.00 crores
and up to Rs. 50.00 crores have been made in the plant and machinery, will be
provided assistance/facilities as follows :-
1. Power consumption Support : As per the prevailing electric tariff, new
customers of high-tension connection will get a subsidy of Rs. 1 per unit or
20 per cent, whichever is less. This rebate shall be payable for a period of 5
years from the date of production / business operation for food processing
units. In off season, the higher of 10 percent of the contract demand or
actual recorded demand, shall be billed at normal tariff, this support is
applicable to food processing units of related category.
2. Exemption from Mandi Fee :
2.1 All eligible food processing units will be exempted from the Mandi Fee
for maximum 50% of investment in plant and machinery or 5 years
(whichever is less).
2.2 This exemption shall be applicable for those units who shall purchase
agricultural produce from the state.
3. Special assistance for establishing food parks :
3.1 Infrastructure Development Assistance : To encourage the
establishment of food processing projects in the state and to improve
the infrastructure, according to the Guidelines for the setting up of
mega food park issued by Ministry of Food Processing Industries,
Government of India, an assistance of 15% of project cost (maximum
amount Rs. 5 crores) in establishing mega food park by a private
investor, shall be provided. This assistance shall be payable on the
establishment of minimum 10 units in the developed park. This
assistance shall be payable in the form of top-up.

35
 3.2 Stamp Duty Support : Stamp duty will be reimbursed to the promoters
for transferring their land to Special purpose vehicle for establishing
mega food park.
4. The unit availing the benefits of this special package will be able to avail
other remaining facilities (which are not of the similar type) declared under
this policy as per eligibility.

36
 Annexure - VI

Special Package to Textile Units

Interest subsidy on term loan taken for Plant & Machinery approved under
Amended Technology Up-gradation Funds Scheme (ATUFs) to new textile units
(MSMEs of manufacturing category, in which investment of more than Rs. 10
crores and up to Rs. 50 crores) will be provided from the date of commercial
production as under :-

S. Type of Units Interest subsidy

No.

1 For New Units with an investment of upto Rs. 25 @2% for 5 years,
crores in fixed assets subject to a ceiling of
Rs. 5 crores
2 New standalone units with an investment of @5% for 5 years
more than Rs. 25 crores in fixed assets
or
Expansion/Diversification of existing
standalone unit with fresh investment in ATUFS
approved Plant & Machinery of at least 30% of
existing investment in fixed Assets (Not less
than Rs. 25 crores) or Rs. 50 crores, whichever
is less
3 New composite unit* with an investment of @7% for 5 years
more than Rs. 25 crores in fixed Assets
or
Diversification of Existing Standalone unit into a
composite unit

37
 * For a unit to be classified as Composite Unit, it should be doing either of the
following manufacturing activities irrespective of its locations (location may
be same or at different places within the state of Madhya Pradesh) and
utilizing at least 75% of primary produce (such as yarn) as an input to the
downstream activities :
 Cloth manufacturing using thread and processing activities (weaving /
knitting and processing activities)
 Cloth processing and manufacturing (processing and garmenting)
 Thread manufacturing – Apparel manufacturing using thread, processing
and apparel manufacturing using clothes (spinning-weaving / knitting-
processing & garmenting)
 Made-up articles

The unit availing the benefits of this special package will be able to avail
other remaining facilities (which are not of the similar type) declared under this
policy as per eligibility.

Note : This document is English translation of "MP MSME Vikas Niti 2021" (Yatha
Sanshodhit September, 2023 - Hindi Version)

38
39