Maharashtra Industrial Policy 2019

The journey of industrial development started soon after independence in 1947. Ever since every state has been forming and modifying the industrial policy for sustainable growth in productivity, generate employment, full utilisation of human resources, to attain international competitiveness and transform India into a major partner and player in the global arena. Maharashtra has been a leader in the Industrial Development Sector due to rewarding industrial policies and ease of doing business initiatives. According to the need the state has been modifying the set industrial policies. This document highlights the salient features of Maharashtra Industrial Policy 2019.

Maharashtra Contribution in India’s Growth

Maharashtra is the most industrialized state of India with contribution of 15% in India’s GDP. Maharashtra has the highest GSDP among 33 Indian States and Union Territories. The state has ranked number 1 in Export Preparedness Index 2020 and has attracted over $10.8 bn of Foreign Direct Investments during Oct 2019 – Sept 2020. With highest exports from the State it has become any investors most preferred destination. Some of the underlying factors of Maharashtra being a strong player are:

1. Agricultural and Industrial Hub: Maharashtra is one of the largest producers of sugarcane and pomegranate in India. It is a Pioneer in small scale industries and boasts of the largest number of special export promotion zones.

2. Productive and Skilled Manpower: It is a home to world class educational and IT institutions with a literacy rate of 82.91%. Large base of skilled and industrial labour force is in Maharashtra.

3. Geographical advantages: JNPT is the largest port in India in terms of container traffic. During FY20 (provisional), major ports collectively handled 68.44 million metric tonnes. Well-connected to its six neighbouring states and other parts of India through 18 national highways.

4. Developed Services and Infrastructure system: Mumbai is the commercial capital of India and has evolved into a global financial hub. The state has 16 airports and two major and 48 minor ports.

In short, Maharashtra has been able to attract highest investments from within and outside India and has emerged as a brand “MAGNETIC MAHARASHTRA- Attractions Unlimited” due to well-developed infrastructure, skilled workforce, strategic location with good transportation network, Progressive Sectorial Policies and Incentives. 

Maharashtra Industrial Policy 2019

Maharashtra Industrial Policy 2019 is reformed with a target to rise the global investment percentage, to enhance manufacturing and technological techniques along with sustainable development. For attaining the set goals certain amendments were done in the previous Maharashtra Industrial Policy. The article is being divided into three segments:

1. Promotion of Trust Sectors.

2. Promotion of MSMEs, Large Scale Industries and covering the fiscal incentives.

3. Other Suggestions with resolutions.

1. Promotion of Thrust Sectors: To be par with the world on technical ground along with steering industrial development towards high tech emerging sectors and generate employment, the State Government has identified following thrust sectors. Thrust sectors shall be accorded priority in land allotment and incentives.

• Electric Vehicles (Manufacturing, Infrastructure and Servicing): With depleting oil resources and rising pollution, Electric Vehicles (EVs) is an alternative to a sustainable future. Maharashtra being an automotive hub of the country has categorized Electric Vehicles manufacturing, infrastructure and servicing as a thrust sector. It aims to maximize the adoption and manufacturing of EVs in the State. For promoting the sector, the state has launched EV & Related Infrastructure Policy 2018 covering the incentives.
• Aerospace and Defense Manufacturing: India is the world’s largest importer of arms (12% of the Import market share). India’s defence expenditure has grown by 231% in last one decade and is expected to reach INR 7.74 lakh crore (US$120 billion), in the next ten years. Maharashtra Government has included the industry segment as one of the thrust sectors. Maharashtra Aerospace & Defence Manufacturing Policy 2018 is providing benefits to the manufacturing units involved in production of arms.
• Industry 4.0 (Artificial Intelligence, 3D Printing, Internet of Things and Robotics, Nanotechnology, among others).
• Promotion of Integrated Data Centre Parks (IDCP): Integrated Data Centre Parks developed by private developers and investment made by companies utilizing the data storage space therein will be eligible for fiscal incentives under Package Scheme of Incentives by way of refund of SGST etc., for maximum of 10 years. (excluding investment in land and building) In the policy period, only first 5 such Integrated Data Centre Parks of Tier-4 category with minimum investment of Rs.1500 Crores by the developer company, will be eligible for above benefits.
• Textile Machinery Manufacturing: Maharashtra has been a leader in textiles by virtue of cotton production. Textile manufacturing machineries are largely imported. The State will promote textile machinery manufacturing as thrust sector and will offer suitable incentives.
• Biotechnology and Medical and Diagnostic Devices: As the sector has high prospects MIDC would develop designated Park with required infrastructural facilitates like CETP/Testing and and Certificate labs.
• Agro & Food Processing (Secondary and Tertiary Food Processing units): The sector has high potential to generate employment. The State Government shall endeavour to set up mini food parks (MFPs) in all districts of the state. MFPs shall be set up on minimum 10 acres of land with the required infrastructure.
• Information Technology (IT) & IT Enabled Services (ITeS): Maharashtra provides a well-established ecosystem for IT & ITeS companies which has resulted in its export market share of 30% . Pune and Mumbai are the major IT & ITeS centres in the State. To place Maharashtra amongst one of the most preferred investment destination in IT sector, the State has declared it as a thrust sector also has a separate incentive policy.
• Electronic Systems Design & Manufacturing (ESDM) and Semiconductor Fabrication (FAB): Its one of the import oriented sector. Maharashtra government has recognised it one of the trust sector and has announced a special ‘Maharashtra Electronics Policy-2016′.
• Logistics & Warehousing: Maharashtra is an ideal location for logistics and warehousing activities due to its strategic location and seamless connectivity with national and international geographies on account of its port and airport linkages. Logistics and warehousing hubs are being planned along the way with Nagpur-Wardha as a major logistics corridor. The State Government has announced a special policy named Logistics Parks Policy 2018.
• Green Energy/ Bio Fuel Production: With rising concerns regarding the carbon emissions and increasing oil imports, there is urgent need to support Green Energy/ Bio Fuel Production. Maharashtra government has considered it as a trust sector. Special incentives would be provided for sector.
• Sports and Gym Equipment Manufacturing: With the growing awareness towards fitness, the state has recognised it as a trust sector. It is one of the labour intensive sector. Special incentives would be provided for the sector.
• Nuclear Power plant equipment manufacturing: India aims to manufacture nuclear power plant equipment and fuel assemblies locally under its Make in India program. This would also provide equipment’s for the second phase of Kudankulam Nuclear Power Plant. Maharashtra shall provide support for manufacturing highly niche segment of nuclear power machinery.
• Mineral / Forest based Industries: Since these Industries will be located in tribal areas, funds from Tribal Sub Plan (TSP) will be utilised for creating infrastructure. Additionally even if the entrepreneur / Industries are non-tribal the eligibility conditions for availing incentives will be provision of 90% employment to tribal persons during the incentive period. The percentage of employment after availing incentives period for tribal persons will be 60%.

2 A. Promotion of Micro, Small and Medium Enterprises (MSMEs) and Small Industries: Maharashtra has the largest number of MSME in the country, which contributes more than 80 per cent of the total employment. MSMEs are best placed to utilize local resources and create local entrepreneurship and employment. About 40% of the exports originate from MSMEs. To promote the industries eligible criteria and fiscal incentives are as under:

Eligibility Criteria

• Fixed Capital Investment: 50 Cr.
• Ceiling Limit and Eligibility Period:
  • A Taluka: NA
  • B Taluka: 30% ceiling for 7 Years.
  • C Taluka: 40% ceiling for 7 Years.
  • D Taluka: 50% ceiling for 10 Years.
  • D+ Taluka: 60% ceiling for 10 Years.
  • Vidarbha, Marathwada, Ratnagiri, Sindhudurg & Dhule: 80% ceiling for 10 Years.
  • No Industry Districts, Naxalism Affected Areas* and Aspirational Districts: 100% ceiling for 10 Years.
• Fiscal Incentives:
  • Power tariff subsidy: Rs. 1 in Vidarbha, Marathwada, North Maharashtra, and Districts of Raigad, Ratnagiri and Sindhudurg in Konkan and in other areas (except A areas), to the tune of INR 0.5/- per unit consumed for 3 years from the date of commencement of commercial production.
  • Interest Subsidy: Interest subsidy @ 5 per cent p.a., maximum upto the value of electricity consumed and bills paid for that year. This is excludes A Taluka industrial areas.
  • Stamp Duty exemption: 100 % stamp duty exemption within investment period for acquiring land (including assignment of lease rights and sale certificate) and for term loan purposes. However, in A and B areas Stamp Duty exemption will be offered only to IT and BT manufacturing units in IT and BT Parks. Eligible Units under PSI 2013 Scheme will also be eligible for stamp duty exemption for their Investment Period.
  • Exemption from payment of electricity duty: For A and B areas Electricity Duty exemption will be offered to 100 per cent Export Oriented MSMEs and IT/BT units for seven years. And for other areas exemption up to eligible period.
  • Investment Promotion Subsidy (IPS) on Gross SGST paid by the unit on the first sale of eligible products billed and delivered to the same entity within Maharashtra.

2 B. Maharashtra Industrial Policy 2019 aims at Attracting Large, Mega and Ultra-Mega Investments with the help of Large Scale Industries: Maharashtra has the largest number of Large and Mega projects in the country. These Large, Mega and Ultra-Mega projects have a proven track record of providing multi-faceted benefits to the State in terms of revenue and employment generation. For the Large Scale Industries there is a fixed Capital Investment/ Employment opportunity threshold set by State government to attain Incentives. Below is the required capital investment/ minimum direct employment required to enjoy fiscal benefits:

• For A and B Taluka:750 Cr Investment or 1000 Employments.
• For C Taluka: 500 Cr Investment or 750 Employments.
• For D Taluka: 250 Cr Investment or 500 Employments.
• For D +Taluka: 150 Cr Investment or 400 Employments.
• Vidarbha, Marathwada, Ratnagiri, Sindhudurg & Dhule: 100 Cr Investment or 300 Employment.
• No Industry Districts, Naxalism Affected Areas* and Aspirational Districts: 100 Cr Investment or 250 Employment.

Fiscal Incentives

• Investment Promotion Subsidy (IPS): Gross SGST paid by the unit on the first sale of eligible products billed and delivered to the same entity within Maharashtra. The incentives will be given to the LSI units on firstcum-first serve basis.
• Stamp Duty exemption: 100 % stamp duty exemption within investment period for acquiring land (including assignment of lease rights and sale certificate) and for term loan purposes. However, in A and B areas Stamp Duty exemption will be offered only to IT and BT manufacturing units in IT and BT Parks. Eligible Units under PSI 2013 Scheme will also be eligible for stamp duty exemption for their Investment Period.
• Eligible LSI units in Agro & Food Processing (secondary and tertiary processing units and Farmer Producer Companies for manufacturing/ processing activity only), Green energy/ biofuel and Industry 4.0 shall be given additional support.
• Incentives to the LSI shall be given to promote quality competitiveness, Research & Development, technology up-gradation, water & energy conservation, cleaner production measures and credit rating.

2C. Mega and Ultra Mega Projects: Industrial units satisfying the minimum threshold limits of Fixed Capital Investment or Direct Employment prescribed below shall be classified as Mega Projects/ Ultra Mega Projects in Maharashtra Industrial Policy 2019:

• For A and B Taluka:1500 Cr Investment or 2000 Employments.
• For C Taluka:1000 Cr Investment or 1500 Employments.
• For D Taluka:750 Cr Investment or 1000 Employments.
• For D +Taluka:500 Cr Investment or 750 Employments.
• Vidarbha, Marathwada, Ratnagiri, Sindhudurg & Dhule: 350 Cr Investment or 500 Employment.
• No Industry Districts, Naxalism Affected Areas* and Aspirational Districts: 200 Cr Investment or 350 Employments.
• Ultra Mega Project: 4000 Cr Investments/ 4000 Employments.

Fiscal Incentives:

• Industrial Promotion Subsidy: According to Maharashtra Industrial Policy 2019, Ultra-Mega/ Mega projects based on employment criteria shall be required to maintain the qualifying direct employment on rolls of the company throughout the year. If the employment criteria is not maintained for any period of the year, then shall not be admissible subsidy for such year/s. b. Minimum Direct Employment should be created within a period of three years from the date of commercial production.
• For mega and ultra-mega projects availing incentives from the State government under Package Scheme of Incentives will have to provide employment to local persons as stipulated by the State Government. Failing to do so will result into reduction of offered incentives..
• Government may consider providing customized package of incentives on case-to-case basis as deemed necessary for projects of special importance..

3. Other Suggestions and Resolutions under Maharashtra Industrial Policy 2019 are

• Walk to work concept: The companies will be encouraged to develop accommodation facilities for employees within 5 km radius of the work area confining to non-polluting industrial activity. Non-fiscal concessions will be offered to developer to make their model Sustainable. In the residential area supporting commercial activities would be allowed. 
•  Promotion of Trade and Commerce by establishing Administrative wing to support,generate employment and contribution to State’s economy and Establishing Global Investment Promotion Council to attract global investment in the State.
• Export Promotion Initiatives: Exports are one of the oldest forms of economic transfer and occur on a large scale between nations. Exports are a component of aggregate demand (AD). Rising exports will help increase AD and cause higher economic growth. Maharashtra is ranked first in India with a total export of Rs. 4.49 lac crores in financial year 2017-18. for further boosting its exports in the area of apparel and textiles, engineering goods, agro-produce and processed foods, IT/ITES, auto and auto components and pharmaceuticals and chemicals following resolutions were passed: 1. Setting up of Export Promotion Council to act as a platform that would assist in creating awareness, and making units more competitive.2. Export Infrastructure Support i.e. Exhibition-cum-Convention Centres, Last mile connectivity, Testing and Quality Certification Laboratories. 3. Venture Capital Funds to SIDBI (State Industrial Development Bank of India)

• Special Incentives: Special Incentives would be granted to:
• Industrial establishment in the underdeveloped districts of Maharashtra.
• Agro & Food Processing, Green energy/ bio-fuel and Industry 4.0 – 20% additional fiscal assistance and two year additional eligibility period shall be applicable.
• SC/ST and Women Entrepreneurs: Out of reserve estate of MSMEs 20% area shall be allotted to SC/ST & Nav Budha entrepreneurs and 5% to women entrepreneurs and industrial units of Women’s Savings Groups & 5% to persons with Disabilities. Fiscal support will be given for SC/ST and women entrepreneurs for participation in international trade fairs. The benefits of the Venture Capital facility will be given to the existing industries as well as newly established industries.
• Strengthening of District Industry Centres: District Industry Centres (DICs) will be strengthened by improving infrastructure, promoting digitization and undertaking capacity building measures to provide comprehensive information on various policies and schemes as well as to support MSMEs in marketing, trade and commerce, entrepreneurship development and revival of sick MSME units at district level.
• Apex Institute for Promotion of Entrepreneurship: To promote Entrepreneurship and conduct exclusive entrepreneurship and management programmes, State of the Art, Apex Entrepreneurship Development Institute of Maharashtra would be established on the land of Maharashtra State Small Industrial Development Corporation (MSSIDC) at Kalamboli, dist Raigad wherein sector specific skilling programmes, hands-on training, mentoring to promote new generation entrepreneurs and start-ups would be promoted. The institute will enter into national as well as international collaborations and will be equipped with the state of the art facilities like Data Centre, E-Library, Incubation centre, exhibition and display centres etc.

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