Jharkhand MSME Promotion Policy 2023: Massive Subsidies, Zero Stamp Duty, and 14 Powerful Benefits Revealed!

Unlock incentives, ease of doing business, and growth opportunities for entrepreneurs under Jharkhand’s new MSME Promotion Policy 2023.

The Micro, Small and Medium Enterprises (MSME) sector has long been recognized as the backbone of India’s economy. Contributing nearly 26.83% to India’s GDP and about 49.35% of the country’s total exports, MSMEs not only provide large-scale employment but also promote balanced regional development. Jharkhand, a mineral-rich state in eastern India, has over 2.77 lakh MSMEs registered on the Udyam portal as of early 2023. This underlines the sector’s crucial role in job creation, rural industrialization, and economic diversification.

Recognizing this potential, the Government of Jharkhand notified the Jharkhand MSME Promotion Policy 2023 on December 4, 2023, with the goal of transforming its MSME ecosystem. This new policy is aimed at fostering growth, creating employment, supporting modernization, and making Jharkhand’s MSMEs globally competitive.

In this article, we take a deep dive into the policy’s objectives, strategies, incentives, eligibility criteria, and implementation framework.

Policy Objectives

The Jharkhand MSME Promotion Policy 2023 has clear and ambitious goals, which include:

• Fostering growth of both new and existing MSME units.
• Encouraging expansion and diversification.
• Spurring employment generation, especially among the youth.
• Accelerating formalization and digitization of MSMEs.
• Supporting adoption of new and innovative technologies.
• Integrating skilling and employment initiatives.
• Promoting inclusive growth with special thrust on women, SC/ST entrepreneurs.
• Strengthening MSMEs by overcoming financial, technological, and marketing constraints.
• Rejuvenating traditional sectors like sericulture, handloom, handicrafts, khadi, and textiles.
• Creating a conducive ecosystem for MSMEs to prosper.

Policy Strategy

To achieve these objectives, the policy employs a multi-pronged strategy:

1. Fiscal Incentives: Attractive financial subsidies and support.
2. Institutional Structure: Dedicated bodies at the state and district levels.
3. Ease of Doing Business: Time-bound approvals, single-window clearances, and a proposed Jharkhand MSME Special Concession Act 2023.
4. Technical Upgradation: Helping MSMEs adopt modern technologies.
5. Cluster Development: Promoting product-specific clusters for collective efficiency.

Enabling Framework

1️⃣ Cluster-Based Development

• Focus on One District One Product (ODOP) model.
• Encourage collective efficiencies in sourcing raw materials, accessing markets, using modern technology, and adopting environmental safeguards.
• Create product-specific industrial clusters for sericulture, khadi, handicrafts, food processing, bamboo, leather, lac, and more.

2️⃣ Institutional Framework

• State MSME Directorate: A dedicated directorate to manage and promote MSME development at the state level, including:
  • Implementing State and Central MSME schemes.
  • Monitoring district MSME centres (DMCs).
  • Overseeing single-window clearances.
  • Promoting trade and exports.
• District MSME Centres (DMCs):
  • Act as single points of contact at district level.
  • Assist in Udyam registration.
  • Facilitate government scheme awareness and implementation.
  • Encourage MSME development in both rural and urban areas.

3️⃣ Technical Upgradation

• Regular district-level training and workshops on new technologies.
• Promotion of ICT and ERP solutions.
• Encouragement to use government-backed IT development programs.
• Support for rural IT infrastructure development.

4️⃣ Skill Development

• Custom vocational training programs in sales, marketing, branding, entrepreneurship, and financial management.
• Collaboration with polytechnics, research institutes, and training centers.
• Emphasis on re-skilling and job-specific training.

5️⃣ Ease of Doing Business

• Single-window clearance system.
• Online applications and payments.
• Self-certification and deemed approvals.
• Time-bound clearances.
• Proposed Jharkhand MSME Special Concession Act 2023 to exempt MSMEs from various state-level approvals, permissions, and inspections.

Eligibility Criteria

Any new or existing MSME in Jharkhand, classified under the Government of India’s revised MSME definition (July 2020), is eligible:

• Micro Enterprise: Investment ≤ ₹1 crore, Turnover ≤ ₹5 crore.
• Small Enterprise: Investment ≤ ₹10 crore, Turnover ≤ ₹50 crore.
• Medium Enterprise: Investment ≤ ₹50 crore, Turnover ≤ ₹250 crore.

Incentives Offered

One of the policy’s biggest draws is its comprehensive incentive package designed to support MSMEs across stages:

1️⃣ Comprehensive Project Investment Subsidy (CPIS)

• Micro: 40% of Fixed Capital Investment (FCI), max ₹15 crore.
• Small: 35% of FCI.
• Medium: 30% of FCI.
• Additional 5% subsidy for SC/ST/Women/Differently Abled entrepreneurs (Jharkhand residents only).
• Disbursed in two instalments (50% in first year, 50% in third year).

2️⃣ Interest Subsidy

• 5% annual interest subsidy on loans from banks/public FIs for 5 years.
• Limits:
  • Micro: up to ₹25 lakh.
  • Small: up to ₹1 crore.
  • Medium: up to ₹2 crore.
• Reimbursement of CGTMSE guarantee fees to support collateral-free lending.

3️⃣ Stamp Duty and Registration Fee

• 100% reimbursement on land purchased directly from raiyats or through consent award.
• Not available for JIADA lease or concessional plots.

4️⃣ Quality Certification Support

• 100% reimbursement of costs, up to ₹25 lakh.
• Includes ISO, BIS, BEE, ZED, LEED, Green Energy Certificates, etc.
• Special support for ZED certification:
  • 20% for micro.
  • 30% for small.
  • 25% for medium units (of balance after central support).

5️⃣ Patent Registration Assistance

• 50% reimbursement, up to ₹25 lakh per patent.
• Includes ₹10 lakh for filing and ₹25 lakh for final acceptance.

6️⃣ Electricity Duty Reimbursement

• 100% exemption for 5 years from commercial production start.

7️⃣ Export Development Assistance

• 75% of stall charges (max ₹4 lakh) for international trade fairs.
• 75% airfare (up to ₹50,000 per person, max 2 per unit per year).
• Annual budget: ₹2 crore, first-come-first-serve basis.

8️⃣ Market Research Fund

• To provide live, real-time market intelligence for exporters.

9️⃣ Green Production & Management

• 75% reimbursement for Energy and Water Audit costs, up to ₹3 lakh.

10️⃣ Trademark Registration Assistance

• 100% reimbursement of costs, up to ₹3 lakh.

11️⃣ SME Exchange Listing Support

• 20% reimbursement of expenses, up to ₹10 lakh, for raising capital.

12️⃣ Effluent Treatment Plant Support

• 50% cost reimbursement, up to ₹25 lakh.

13️⃣ Technology Support Subsidy

• 75% reimbursement for ERP (up to ₹1 lakh) and ICT (up to ₹5 lakh) solutions.

14️⃣ Green Measures Subsidy

• 50% reimbursement of consultancy costs for green building rating (up to ₹4 lakh).

Procedure and Implementation

• Applications are to be submitted via Jharkhand’s Single Window Clearance portal.
• Incentives are processed through an online workflow system.
• A Certificate of Date of Commercial Production (DoP) from the State MSME Directorate is mandatory to avail benefits.
• The policy is operative for 5 years from its notification date.

Exclusions

Certain industries are ineligible for fiscal incentives, including:

• Saw mills, tobacco processing, beauty parlours, guest houses, petrol pumps.
• Mining activities.
• Mobile facilities like concrete mixing plants.
• Brick-making (except fly ash/red mud-based).
• Consumer product showrooms and service centers.

Conclusion

The Jharkhand MSME Promotion Policy 2023 is one of the most comprehensive and ambitious state-level MSME policies in India. By focusing on inclusivity, technology adoption, ease of doing business, and targeted financial support, Jharkhand aims to position its MSMEs as engines of sustainable growth, employment, and industrial diversification.

Whether you’re an entrepreneur looking to start a new venture, expand an existing unit, or simply explore opportunities in Jharkhand, this policy offers a rich basket of incentives and a supportive ecosystem designed to help you succeed.

Ready to get started? Visit the Single Window Clearance portal of Jharkhand’s Department of Industries to learn more and apply for the benefits under the MSME Promotion Policy 2023.

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