New Policy to Boost MSME sector in Tamil Nadu

By Najma Hashemi --
Thursday, 18 Feb, 2021

On Tuesday, the Chief Minister of Tamil Nadu disclosed a New MSME Policy in order to amend the current MSME ecosystem for more benefit, as well as to enhance the large scale new industrial investment, aiming to make a high- spirited ecosystem for startups and MSMEs out of that of the state.

Moreover, the target of the policy is to catch new investment to the figure of 2 lakh crore, and to create more job opportunities to 20 lakh people by 2025. The policy further aims to increase the share of exports the MSMEs by 25%.

An official with the state’s industries and commerce said: “MSMEs are the backbone and engine of growth, large employment generators and offer regional balance in industrial growth across sectors around the state. With the reclassification of MSMEs – up to Rs. 50 crore in plant and machinery and Rs 250 crore in turnover without considering the exports, the landscape has grown bigger. The new policy addresses the needs of this sector in the enlarged arena.”

To accomplish the goal of Vision 2023 disclosed by J Jayalalitha in 2012 in respect of making Tamil Nadu as the Asia’s most favoured investment destination for MSMEs, the new policy has set up a target to facilitate investment including FDI, foster culture of entrepreneurship and innovation and strengthen ease of doing business and good governance.

“To achieve this, the state had established the MSME Trade and Investment Bureau (M-TIPB) in 2019 to provide services to prospective foreign investors in the MSME sector. The MSMEs have already established a global network across countries and have a large base of vendors in different segments and regions. The idea is to enable them to access technology, besides capital,” added the official.

Under this policy, for three years the MSMEs and startups will be free from approvals of establishment and operation, based on self- certification, subject to the condition that the enterprises would have compulsory approval within one year after the expiry of the three- year period. As already mentioned in the innovation and startup policy of Tamil Nadu state 2018, a new startup fund will be made up.

As a great enhancement to the MSME sector, the margin on the capital subsidy is being increased from Rs. 50 lakhs to Rs. 1.5 cr, in addition to extending support for listing in SME exchange and raising capital from stock markets. For upgradation and maintenance of Tansidco estates, which is a demand of the MSME units left pending for so long and had taken space in the state agency’s numerous industrial estates, a corpus of Rs 500 crore is being created under this new policy.

New Policy to Boost MSME sector in Tamil Nadu. On Tuesday, the Chief Minister of Tamil Nadu disclosed a New MSME Policy in order to amend the current MSME ecosystem for more benefit, as well as to enhance the large scale new industrial investment, aiming to make a high- spirited ecosystem for startups and MSMEs out of that of the state.

Moreover, the target of the policy is to catch new investment to the figure of 2 lakh crore, and to create more job opportunities to 20 lakh people by 2025. The policy further aims to increase the share of exports the MSMEs by 25%.

An official with the state’s industries and commerce said: “MSMEs are the backbone and engine of growth, large employment generators and offer regional balance in industrial growth across sectors around the state. With the reclassification of MSMEs – up to Rs. 50 crore in plant and machinery and Rs 250 crore in turnover without considering the exports, the landscape has grown bigger. The new policy addresses the needs of this sector in the enlarged arena.”

To accomplish the goal of Vision 2023 disclosed by J Jayalalitha in 2012 in respect of making Tamil Nadu as the Asia’s most favoured investment destination for MSMEs, the new policy has set up a target to facilitate investment including FDI, foster culture of entrepreneurship and innovation and strengthen ease of doing business and good governance.

“To achieve this, the state had established the MSME Trade and Investment Bureau (M-TIPB) in 2019 to provide services to prospective foreign investors in the MSME sector. The MSMEs have already established a global network across countries and have a large base of vendors in different segments and regions. The idea is to enable them to access technology, besides capital,” added the official.

Under this policy, for three years the MSMEs and startups will be free from approvals of establishment and operation, based on self- certification, subject to the condition that the enterprises would have compulsory approval within one year after the expiry of the three- year period. As already mentioned in the innovation and startup policy of Tamil Nadu state 2018, a new startup fund will be made up.

As a great enhancement to the MSME sector, the margin on the capital subsidy is being increased from Rs. 50 lakhs to Rs. 1.5 cr, in addition to extending support for listing in SME exchange and raising capital from stock markets. For upgradation and maintenance of Tansidco estates, which is a demand of the MSME units left pending for so long and had taken space in the state agency’s numerous industrial estates, a corpus of Rs 500 crore is being created under this new policy.