Launch of Telangana MSME Policy 2024
On the 18th of September, 2024, the Government of Telangana unveiled its MSME policy and the road map for rapid industrialization of the state, for creating more opportunities for Entrepreneurs and Youth from all classes of life.
As of date, Telangana has about 26 lakhs Micro enterprises registered between 2014 and 2024, out of which about 8,65,000 have already registered on the Udyami portal for availing various benefits from schemes launched both by the Government of India and by the Government of Telangana.
Till 2014, about 150 MSMEs per year were being registered in the combined state of Telangana and Andhra Pradesh. There was a sudden spurt in the growth of Micro and Small industries from 2014 onwards, mainly due to the launch of Startup India and Standup India campaigns by the NDA Government at the Centre. Between 2014 and 2024, an average of 3,000 enterprises have been added yearly in Telangana alone, thus making the MSME ecosystem vibrant and active.
The launch of the PM Mudra Scheme and promotion of the PMEGP program by the Government of India encouraged small enterprises to venture mainly into the Food Processing industry. The PM FME scheme, which gives financial support to existing micro and small enterprises in the food sector, has caused a boom in the number of startups in the food processing sector.
The need for logistics support, mini-cold storage units, and mini-warehouses for all these growing numbers of micro and small enterprises has become imperative. In light of the recent developments in the MSME ecosystem, the Government of Telangana has identified 6 major thrust areas and has addressed all of them through the new MSME Policy 2024. The following are the identified thrust areas:
1) Accessibility to Land – availability, accessibility and affordability
Since the cost of land in the present industrial estates in and around the city of Hyderabad has become quite expensive, the Government has come up with the idea of Flatted Factories or Flatted Industrial complexes of several small units in one single site, thus bringing the required space for Micro and Small units within their reach.
The Policy assures earmarking at least 20% of the upcoming new Industrial Parks throughout the State of Telangana, for Micro and Small Enterprises with an emphasis on allotting them preferably to SC & ST Entrepreneurs.
The Policy also envisages a plan to build 5 Exclusive MSME Industrial Parks between the present Outer Ring Road (ORR) and the upcoming 340 km regional Ring Road (RRR) with a Common Facilities Centre, a Creche and other contemporary amenities.
2) Easy access to finance to the MSMEs
- Subsidy under the T-IDEA Scheme enhanced from the present 15% to 25% with an upper ceiling of ₹30 lakhs.
- Subsidy for Women-owned Micro and Small Enterprises under the T-IDEA Scheme, raised from 10% to 20% with an upper ceiling of ₹20 lakhs.
- For SC & ST Entrepreneurs, subsidy under the T-PRIDE Scheme raised from 35% to 50% up to a limit of ₹1 crore.
- Micro and Small Enterprises owned by Women Entrepreneurs belonging to SC & ST Communities are now eligible for an additional subsidy of 20% up to a limit of ₹20 lakhs. This was 10% in the earlier scheme.
Other initiatives include increasing financing options for public contracts, improving access to alternative sources of finance, capacity building for MSMEs and making videos in Telugu language on the basics of Accounting and bookkeeping.
3) Easy access to raw materials
The new MSME policy of 2024 assures the Entrepreneurs to easy access to raw materials through building exclusive warehouses to store and supply commonly used raw materials at competitive prices and then supply them to MSMEs as per their requirements. The Industries Department proposes to build a database and directory of raw materials it is sourcing in bulk and available within various warehouses, which will be accessible to all eligible MSMEs in the state.
The Industries Department, Government of Telangana wants to establish at least 10 Common Facility Centers in the State in the coming years and strengthen the warehouse and storage ecosystem. One common warehouse in each MSME Park will be built on PPP Mode and will be given on lease to the Developer.
The policy also mentions the various measures to be taken up like supporting MSMEs in import duty drawback, onboarding raw material suppliers on B2B and B2C digital platforms and streamlining the process of quality certifications like ZED, ISO and IMS.
4) Improving flexibility in Labour markets:
A Digital Employment Exchange of Telangana to be called DEET will be made available for registration of skilled and trained manpower, which the MSMEs and other industries can access. The policy emphasizes the need for skilling the workforce at scale and setting up Telangana Skilling University at Hyderabad.
The curriculum for the students enrolling in this university will include subjects like Advanced Manufacturing Techniques, Industrial Management and Operations, Technical Skills and Trades. The faculty and training sessions will be tailor-made for end-user industries like Pharmaceuticals, Manufacturing and Food Processing.
Other key features of this policy include the promotion of worker housing reforms in Industrial zones, rationalization of compliance requirements for labour contractors, flexibility in working hours to ensure greater productivity of MSMEs, facilitating greater participation of women industrial processes and operationalization of the 24×7, round the year operations of Shops and Establishments.
5) Encouraging the adoption of Technology:
The policy intends to identify the technology needs of the MSMEs and support them in enhancing the digitalization of a maximum number of enterprises to make them Industry 4.0 compliant.
A dedicated fund of ₹100 crores will be earmarked for enabling this digital transformation. Supporting IPR registrations, research and development, and organizing workshops between MSMEs and Technology providers regularly is on the cards.
6) Improving access to Markets:
The Government through this Policy proposes to develop a vibrant value chain in the state to support MSMEs and make them ready to supply to global markets. The Government through The Industries Department is planning to encourage the large industries present in the state to procure locally to support MSMEs.
The Government intends to help MSMEs increase their presence on E-commerce platforms, on B2B platforms like ONDC, GEM and IndiaMart, incentivizing green initiatives by MSMEs and their Associations, cluster-based ZED Certification facility, and encouraging the Exporters from the state to list their products and services on GlobalLinker portal.
Other proposals include organizing supplier meet-ups, cost-sharing for acquiring quality certifications, creating an Enterprise Development Platform and other benefits to MSMEs like reimbursement of duty of samples imported for prototyping.
The MSME Policy 2024 brought in by the Government of Telangana wants to revolutionize the way MSMEs are facilitated to establish enterprises and grow them with the handholding from the Government and Industry Associations, to become the best in the Country. The Government intends to transition the state’s Self-Help Groups (SHGs) to evolve into MSMEs and explore National and Global Markets.
The Policy mentions that the Government in coordination with MSME Associations and other industry bodies like FTCCI, ALEAP and ASSOCHAM, will review the implementation periodically and make corrections in the Policy wherever required.
The entrepreneurs in the state hope that all the thrust areas mentioned in the policy will be thoroughly implemented and that more opportunities will be created for them and for startup enthusiasts.
You can download a copy of the MSME Policy here: https://www.telangana.gov.in/wp-content/uploads/2024/09/Telangana-MSME-Policy-2024-English.pdf
