Scheme for Assistance in Rent to MSMEs

Micro, Small and Medium Enterprises (MSEs) play a significant role in the economic growth of the country owing to their contribution to production and employment. In the recent years, there is a sharp increase in the cost of land and building in the country and therefore Micro, and Small Enterprises having minimal financial resources could not able to start their manufacturing enterprises. Government of Gujarat has decided to provide financial assistance through Scheme for assistance in Rent to MSMEs for shed and plot developed by private developers for the generation of employment and development of MSMEs in the state. The task of administering and implementing this Scheme is entrusted with the Gujarat Industries Commissionerate. In this article, we will look at the Scheme for Assistance in Rent to MSEs Know more about the CGTMSE

Features of the Scheme

Under this Scheme, the Government provides financial assistance to Private Developer for developing readymade sheds in Mini Estate.

Gujarat Government has felt that there is a need for small estates having a small row house type (Gala type) shed for MSEs which will provide basic infrastructure to set up MSEs. This type of mini Estate can be developed by a private developer for MSEs.

The government also offers financial Assistance in rent to MSEs

The Government felt that the MSE Industrial units have to keep more margins for purchase of land and building while approving the loan from the financial Institution/ bank. This will affect the working capital requirement and also adversely affect the overall viability of the entire project. In view of above, the government has decided to assist MSEs units in rent which will improve the initial liquidity of the project and also help the financial institution/bank to sanction the term loan on plant and machinery required for the project.

Note on Private Developer

Private Developer

Private Developer means any registered Private, Public Limited Company or Industrial Association, Individual industries, Group of industries or Cluster

Mini Estate

Mini Estate is an industrial estate having necessary infrastructure facilities like developed plot, water distribution facilities, internal roads, power distribution and such other facilities or services as may be required designed for the establishment of MSEs in manufacture any product

Eligibility Criteria

The eligibility criteria to obtain the financial benefit under the Scheme for Assistance in Rent to MSEs for Shed and Plot developed By Private Developer are explained in detail below: The New Micro and Small Enterprise registered as an industrial unit under the MSME Development Act, 2006 with respective Director of Industries Commerce (DIC) as a manufacturing enterprise and obtained term loan from the Financial Institution.

Eligible new unit

For availing the grant under the Scheme for Assistance for in Rent to MSEs, the new unit has to commence production during the operative period of this Scheme.

Eligible Fixed Capital Investment

The eligible fixed Capital investment of the project will be decided based on the following criteria:

Cost of Land

The cost of land will be decided on the basis of prevailing jantri price of the area or the actual price paid by the private Developer, including the stamp duty and registration charges.

Cost of Building

The cost of the building is fixed up by SLEC for the industrial building and SOR of the Roads and Building Department.

Other Infrastructure Facilities

The cost of other infrastructure facilities will be as decided by the SLEC.

Architect I Consultancy fees/ TPQA charge

The fees and charges paid for the services for the development of Mini estate would be up to 5% of the project cost or Rs.20.00 lakhs whichever less will be considered as an eligible investment.

Assistance to a Private Developer for Developing Readymade Sheds in Mini Estate.

Quantum of Assistance

The assistance at 50 % of the total cost of land, building and other infrastructure facilities will be given to the private Developer to set up MSEs.

Conditions

The assistance will be provided with the following conditions:
The size of the shed should be around 50 Square Meters.
The size of the mini Estate should not be more than 2 Hectare
The land will be in the industrial zone or commercial zone in the Municipal Corporation/ Urban Development Authority or converted to N.A. for industrial purpose in any other areas.
The private Developer will have to get all the sanctions from the competent authority
The private Developer will have to develop all the infrastructures described in the project proposal within two years from the date of sanction. No assistance will be given if all the infrastructure facilities are not created.
Assistance will be provided to the private Developer for providing plug and play infrastructure facilities.
The Developer will have to hand over the operation and maintenance to the members of the Estate.
No additional charge will be collected from the MSE unit for providing facilities except user charges as decided by the members of the association.
The assistance under this Scheme will be disbursed to private Developer at 25 % of the cost of Shed as per the sale of the individual shed and after the commencement of the production by MSE units; the remaining assistance would be given to the private Developer.
If the private developer does not find any buyer for vacant sheds, the same can be disposed of after two years from the date of allotment to first MSE allottee or the completion of infrastructure facilities whichever is later. With prior Approval of industries commissioner.

Assistance in Rent to MSEs

The Government felt that the MSE Industrial units have to keep more margins for purchase of land and building while approving the loan from the Financial Institution. This will affect the working capital requirement and also adversely affect the overall viability of the entire project. In view of above, the government has decided to assist MSEs units in rent which will improve the initial liquidity of the project and also help the financial Institution or bank to sanction the term loan on plant and machinery required for the project.

Quantum of assistance

The Scheme intends to provide assistance to set up MSEs by small entrepreneurs having limited financial resourced, the Government will assist with rent to strengthen the MSEs in the initial period of establishment.

The assistance at 50% of rent paid or Rs.50000/- per annum, whichever is less in Municipal Corporation area and areas under the Urban Development Authority
The assistance at 50% of rent paid or Rs.25000/- per annum, whichever is less except mentioned above
The financial assistance will be provided for three years

Conditions

The assistance will be provided with the following conditions:
The assistance will be provided in a commercial zone or industrial zone.
The building should be authorized and must be taken all the essential permissions from the competent authority.
The rent deed or lease deed of the building should be in the name of the owner of the buildings.
The building should have industrial power connection
The assistance of rent will be provided with effect from the elate of rent deed or three months before the date of production
The lease deed or rent deed should be for five years.
The financial assistance will be disbursed with interest subsidy and from the date of commercial production

Documents Required

The documents required for the Scheme for assistance in Rent to MSEs for Shed and Plot developed By Private Developer for the generation of employment and development of MSEs are given in the document:

Application Procedure

The application procedure to obtain the financial assistance under the Scheme for assistance in Rent to MSEs is explained in detail below:

The Private Developer will have to purchase land and get it converted for industrial use from the competent authority.
After approval of land for industrial use, the Developer will submit the proposal to Industries Commissioner's mentioning the proposed allotment cost of the shed.
The Developer shall have to include the cost of all the infrastructure facilities and work out the final allotment price.
The State Level Empowered Committee will sanction the proposal, and thereafter, the Developer will start the development of an infrastructure facility.
The unit will have to apply in a prescribed application form within three months before the date of production.

The application form for Scheme for assistance in Rent to MSEs is given here:

The unit has to furnish printout of application along with all documents certified by the authorized person to concern DIC in the prescribed format as specified in the checklist for sanctioning.
On receiving of application, DIC will scrutinize all documents. After scrutiny of all required documents After verification, the claim will be approved by General Manager – DIC.
The amount will be disbursed through online banking( RTGS) in applicant account through DIC, subject to the availability of grant.