MPSIDC [Madhya Pradesh State Industrial Development Corporation Limited]

Economic Development Policy

INDUSTRY

CLUSTER DEVELOPMENT

An industry cluster is a group of key and supporting industries, infrastructure and institutions that are interlinked and interdependent. The government will promote specific industry clusters to facilitate the development of competitive advantage. The State shall focus on the following sectors - Food & Agri processing, Textiles & Garments, Minerals, Gems & Jewellery, Auto & Auto Ancillary, Information Technology, Life Sciences, Tourism. The Cluster Development Strategy shall address:

»	Critical infrastructure need gaps, industry specific as well as common
»	Forging of symbiotic and mutually beneficial institutional arrangements between Government, Academic-R&D Institutions and industry,
»	Enable the Small-Scale & Tiny sector to evolve themselves into competitive enterprises.

The state will -

Develop Destinations as Vibrant Industry Clusters for Investment Attraction. The government will develop four destinations across the state with a cluster focus. This will not only ensure enhanced industry competitiveness but also in balanced regional development.

Region	Nucleus Centre	Cluster
Malwa	Indore	Textile/ Food / Gems / IT / Auto
Narmada	Bhopal	Life Sciences / IT
Mahakaushal & Vindhya	Jabalpur	Mineral based / Textile / Food / Forest based
Bundelkhand	Gwalior	Electronics / IT / FMCG / Light Engineering

The government will take steps to set up industry specific projects in each cluster through private sector participation. The government shall create

»	An Apparel, a Gems & Jewellery, a Food Park / Agri Export Zone (AEZ) and an IT Park in and around Indore.
»	A Special Economic Zone at Indore
»	A Life Sciences Gateway at Bhopal
»	A Stone park at Jabalpur

This does not preclude the development of same or different clusters elsewhere in the State.

Advisory councils shall be constituted for each cluster with representatives from industry to suggest initiatives, monitor implementation and influence policy / decision making at the highest levels. These councils would be mandated to build capabilities and manage growth in their respective clusters by undertaking project development and implementation.

The government will provide concessions for the development of these clusters:

Promote Development of the Textile Industry. New units in textile, hosiery and knitwear industry will be eligible for an interest subsidy of 5% on the actual interest paid to the financial institution / bank on the term loan. In addition, an investment subsidy is also proposed. The government proposes to establish an Apparel Park at Indore for access to quality and industry specific infrastructure.

Promote Information Technology (IT) and Life Sciences (LS/BT) Industries. New IT / BT units shall attract the investment subsidy of 10 to 15% (maximum of Rs. 5 lakhs) and the interest subsidy of 5% per annum. Private investments in Hitech Parks shall be encouraged, a capital subsidy for upto 30% of the Capital cost or Rs. 1.5 crores, whichever is lower, has accordingly been provided. Electricity duty exemptions are also available to the IT sector. Finally, it has been declared a ‘non-polluting’ industry.

The Government has initiated changes in the labour laws to make them more favourable to IT/BT Industries. 24X7 working days (24 hrs. a day and 7 days a week) have been permitted. Other changes sought are:

»	Allowing the use of contract employees
»	Allowing women to work in night shifts

Apart from the existing IT Park at Indore, the Government plans to set up new IT Parks in Indore and Bhopal. An IT Enabled Services Training Centre has been set up in Bhopal in collaboration with GE, and a IIIT at Gwalior with a view to ensuring availability of highly skilled manpower. Also, to encourage industry-academia interaction the Government has initiated the development of the Rajiv Gandhi Institute of Technology into a ‘Centre of Excellence’ for IT.

The State envisages the development of a ‘Life Sciences Gateway’, including a Life Sciences University, as the hub for all academic and cutting edge research and a BT Park linked to and feeding each other through shared research interest. A Task Force has been created for this purpose.

Separate IT and Biodiversity & Biotechnology Policies have been announced. Incentives & Concessions on investment in these industries shall be governed by the respective policies.

Promote the Development of Food Industry. The government will undertake reforms in the Agriculture sector and private participation in the sector will be encouraged. It will allow and encourage private participation in the development of wastelands, production of seeds, development of infrastructure and agri-food processing. A New Food Processing policy is being drafted with a special package of incentives for investors. In the interim, new units shall be eligible for the facilities and concessions available to other industrial units i.e. investment subsidy, interest subsidy etc. Three AEZs, complete with state of the art infrastructure and facilities, are planned in the Malwa region for wheat, spices and vegetables to enable the State to gain visibility in international markets by fostering efficient linkages in the value chain. Options for technology upgradation have been provided with the above in mind.

Facilitate the Development of Mineral-Based Industries. The Government recognises the vast opportunity to develop mineral resources. The State Mines and Geology Department will gather and collate geological information about minerals in MP and make it available to prospective private entrants.

Provide a Facilitative Environment for the Development of Small and Medium / Tiny Enterprises. As a part of the cluster development strategy the government will take initiatives for the general development of SMEs and also initiatives focussed on specific clusters. These initiatives will be facilitative in nature. The following interventions will be made for developing the SME sector in general:

»	Interest subsidy will be offered at an enhanced rate of 5% per annum subject to ceilings and location constraints.
»	Common infrastructure facilities such as Common Effluent Treatment Plant (CETP), Testing facilities etc. shall be eligible for funding from the Udyog Vikas Nidhi.
»	Centres of Excellence, such as that for IT and Life Sciences, professional training and management institutes such as the IIIT at Gwalior and IIM at Indore are proposed to spur greater academia-industry interaction, and foster an environment conducive to unleashing the entrepreneurial energies of the State.
»	Project report preparation expenses are reimbursable at the rate of 1% of project cost i.e. Rs. 1 crore & less.
The government will take the following initiatives to facilitate institutional capacity building among industrial units:

Facilitate the Setting Up of Training Institutes. The State will promote training institutions of national repute to be set up by large industrial houses in areas like Information Technology, Biotechnology, Textiles, Food Processing and Gems & Jewellery.

Assist in Market Promotion. Market promotion like Buyer-Seller meets, Trade Fair etc. will be encouraged. Common purchase policy will be introduced for purchase of items manufactured by small-scale units of the State. A booklet incorporating items required by State Government Corporations/ Boards and large companies will be published for the benefit of small-scale industries.

Provide Assistance for Consultancy.With a view to giving impetus to entrepreneurial activity in the state, both small and large, the Govt. shall bear 0.5%-1% of the project cost, depending upon the size of the unit, towards project preparation expenses.

Facilitate Technology Upgradation. The State Government has accorded high priority for upgradation of technology and modernisation by industrial units. The Research and Development Institutions set up in the State will be strengthened and encouraged for taking up technology upgradation programme in specific industrial clusters. Concessions will be given (@ of 50% of the cost incurred or Rs. 75,000 whichever is lower) to get accreditation with International Quality Testing Agencies in order to make them internationally competitive. Innovations from small enterprises and individuals will be encouraged. The institutions set up in this regard shall be supported.

Provide Assistance for Patent Registration. A Facilitation Cell will be created to advise entrepreneurs on Patents and Intellectual Property Rights (IPR). Industries as well as R & D institutions will be encouraged for filing patents on their research. Assistance will be provided at the rate of 50% of expenses in this regard upto a maximum of Rs. 2 lakhs.

Promote Rural and Cottage Industries. Rural industries are an important ingredient in the economic development process. A vibrant rural non-farm sector impacts growth through employment generation, poverty alleviation, higher incomes and finally balanced regional development. The Government therefore seeks to promote rural and cottage industries in a big way. It proposes to undertake the following initiatives:

»	Mulberry silk related activities to be promoted in Hoshangabad, Narsinghpur, Balaghat, Mandala, Vidisha and Rajgarh districts. Saja and Arjun plantations shall be promoted as a part of Social Forestry programme. A proportion of all trees reared in forest nurseries will be of these varieties.
»	Production of Tussar Cocoon to be encouraged in Balaghat, Mandala, Dindori and Shahdol districts. A proposal for boosting the production and provision of financial assistance shall be prepared.
»	MP Sericulture & Marketing Co-operative Federation shall be retained as the marketing agency for post-cocoon works.
»	New hitech methods of plantation, as those adopted by the forest department in Mandala, shall also be replicated/ explored in the silk sector.
»	Mulberry activities shall be extended to individuals and Self Help Groups to be constituted under the ‘Swarna Jayanti Rozgar Yojana’
»	Traditional Handloom weaving shall be revived.
»	Assistance for modernization of handlooms, upgradation of skills and identification of new markets shall be provided. Export markets shall be given special attention.
»	Assistance in the form of access to latest designs and techniques shall be provided to weavers in Siroj and Barasvini
»	Handloom products such as threads etc. used in handloom production shall be exempt from tax.
»	Certification facility shall be provided for maintaining the authenticity of Chanderi weavers
»	With a view to promoting exports, the MP Handicrafts & Handloom Development Corporation shall, for a limited period, compensate for the differential with the export rate, if the export rate is lower.
»	Burhanpur, Pithampur, Doda, Meghnagar, Dewas and Maxi shall constitute the Powerloom cluster.
»	An Agency shall be set up to lay down standards for rural industry products. Brand names shall be registered by the Professional Workers Group under the self-help scheme.
»	Centers for exhibition / marketing of Rural Industries will be set up at Bhopal, Indore, Jabalpur and Gwalior.
The government will explore the possibility of facilitating tie-ups with multinational companies and international organisations for the marketing and branding of products being manufactured by rural and cottage industries.

Promote the Warehousing sector. In line with the State’s vision of becoming the Logistics / Warehousing hub within the country the State shall encourage the development of the same. To promote warehousing activities in the State, the government has permitted the setting up of warehouses, with at least 3600 MT capacity or Rs. 2 crore investment, within Growth Centres and industrial estates.

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	Madhya Pradesh State Industrial Development Corporation Limited