The Government of Telangana on September 18th 2024 issued a notification regarding the MSME Policy of the state. The new policy is The Telangana MSME Policy 2024. With around 26 lakh MSMEs currently operational and a notable growth trajectory, the new guidelines seek to address ongoing challenges while fostering an inclusive and robust environment for businesses.
Key Objectives of the New MSME Policy
The Telangana MSME Policy 2024 sets ambitious targets, including:
- 10% Increase in MSME Contribution to GSDP: Aiming to significantly enhance the economic footprint of the MSME sector.
- 15% Year-on-Year Growth in Registered MSMEs: This growth will be tracked through the TGiPASS portal.
- Promotion of Inclusive Employment and Equitable Growth: Focused on uplifting marginalized communities and ensuring gender parity in the workforce.
Expected Outcomes
The government anticipates several positive outcomes from the implementation of this policy:
- 20% Increase in Jobs in MSMEs: With a targeted 30% of these jobs going to SC/ST and women.
- 20% Increase in MSMEs in Underrepresented Districts: Ensuring that growth is equitable across the state.
- 10% Increase in Average Capital Investment: Encouraging higher investments in micro, small, and medium enterprises.
- 10% Increase in GVA Contribution: Boosting the Gross Value Added by the MSME sector.
- 10% Graduation of MSMEs: Helping existing MSMEs to scale up to the next size category.
Challenges Facing MSMEs
Despite the promising statistics, MSMEs in Telangana face several significant challenges:
- Land Availability: Issues with affordability and limited supply of industrial plots, compounded by zoning restrictions.
- Finance Access: Working capital stress and high collateral requirements hinder growth.
- Raw Materials: Difficulty in sourcing quality raw materials, coupled with inadequate storage facilities.
- Labour Access: Challenges in finding skilled labor and retaining workers, especially women.
- Technology Adoption: High costs and limited digital solutions hinder modernization.
- Market Awareness: Low knowledge of export requirements and quality certifications.
Proposed Solutions
To address these challenges, the Telangana MSME Policy proposes several strategic measures:
1. Improving Land Accessibility
- Industrial Parks: Establishing 10 industrial parks, including special parks for women and innovative startups.
- Land Cost Rebates: Increasing rebates for SC/ST entrepreneurs and introducing new formulas to make land affordable for all MSMEs.
2. Facilitating Access to Finance
- Collateralization Scheme: Allowing MSMEs to use proof of entitlement as collateral for loans.
- Increased Subsidies: Enhancing capital investment subsidies, particularly for SC/ST and women entrepreneurs.
3. Ensuring Raw Material Availability
- Common Facility Centers: Setting up centers to facilitate access to raw materials.
- Timely Allocation: Ensuring that government departments allot raw materials promptly.
4. Enhancing Labour Access
- Skills Development Programs: Incorporating MSME-focused courses in local universities and creating internship opportunities.
- Simplifying Compliance: Streamlining labor law regulations to make it easier for MSMEs to comply.
5. Promoting Technology Adoption
- Yantram Fund: Establishing a ₹100 crore fund to support technology adoption.
- Bulk Purchasing Discounts: Facilitating discounted rates for technology purchases in clusters.
6. Improving Market Access
- Local Procurement Initiatives: Encouraging large industries to source components from local MSMEs.
- Public Procurement Policies: Reserving a percentage of public contracts for MSMEs, with specific sub-reserves for SC/ST and women-owned businesses.
Implementation Framework
To ensure the effective execution of the policy, the Telangana government plans to strengthen District Industries Centres (DICs) and establish a dedicated MSME support wing that operates around the clock. A high-level steering committee will be formed to monitor progress and set strategic directions.
Financial Commitment
The government has allocated ₹600 crores over the next five years to support these initiatives, demonstrating a strong commitment to fostering the MSME sector.
The Telangana MSME Policy 2024 is a bold step towards creating a conducive environment for micro, small, and medium enterprises.
