Programme to Accelerate Development for MSME Advancement

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Haryana Government Gazette

Published by Authority

© Government of Haryana No. 34–2023]  CHANDIGARH, TUESDAY, AUGUST 22, 2023 (SRAVANA 31, 1945 SAKA)

PART-I

Notifications, Orders and Declarations by Haryana Government

HARYANA GOVERNMENT

INDUSTRIES & COMMERCE DEPARTMENT

Notification

The 17th August, 2023

No. 12/02/2022-1IB-II.— In supersession of earlier notification No.12/2/2022-1IB-II dated 29.11.2022, to accelerate entrepreneurship, strengthen block level industrial infrastructure, promote growth of micro & small enterprises, and create sustainable employment opportunities at the grass-root level across the state, the Governor of Haryana is pleased to re-notify the five year block level economic transformation policy called 'Programme to Accelerate Development for MSME Advancement' (PADMA).

(Sd.,)….,

Chandigarh: The 10th August, 2023 Additional Chief Secretary to Government Haryana,

Industries & Commerce Department.

(700)PART I] HARYANA GOVT. GAZ., AUG. 22, 2023 (SRVN. 31, 1945 SAKA) 701

Table of Contents

Programme to Accelerate Development for MSME Advancement

1. Introduction

Micro, Small and Medium Enterprises (MSME) sector has been identified as an engine for socioeconomic growth. MSMEs provide the largest share of employment after agriculture and hence, development of MSME sector can contribute enormously to the socio-economic development of the State.

With more than 9,70,000 MSMEs in the State generating employment for more than 19 lakh persons (MoMSME Annual Report 2022-23), the major MSME footprint is in automobile, food & beverages, textiles, engineering and metals sector. The manufacturing MSME spectrum in the state comprises both state of the art medium enterprises (majorly located in Panipat, Faridabad and Gurugram) as well as a large number of traditional micro and small enterprises (majorly located in Panchkula, Ambala, Karnal, Rohtak, Kaithal etc.) MSME sector faces challenges of lack of access to markets, credit, technology and infrastructure, lack of policy outreach and awareness. The MSMEs also need extra support especially in industrially backward districts.

The State Government seeks to create an enabling MSME ecosystem in each block of the state around an identified product segment. One product in each block of the 22 districts (covering all 143 blocks) in the State has been identified based on the locally available resources, existing micro enterprise ecosystem, demographic profile, key opportunities, sunrise sectors and growth potential. For each block, one new MSME industrial cluster covering an area of minimum 25 acres shall be developed. It is envisaged that each such MSME cluster shall constitute a minimum of 20 micro, small and medium enterprises (MSMEs) along with other enabling infrastructure. In the Hon'ble Chief Minister's Budget Speech 2023-2024, a budget of ₹1,000 crore was announced Haryana to provide new innovative incentives under PADMA policy.

In view of this, a new policy has been envisaged to ensure development of block wise MSME ecosystem, namely, Programme to Accelerate Development for MSME Advancement (PADMA).

2. Objectives

As an outcome, the program will aim to achieve the following:

• Set up a new MSME cluster in each block, on about 4000 acres of land

• Enable setting up of 10,000+ new enterprises

• Attract new investment of INR 25,000-30,000 Crores

• Creation of 3,00,000 new employment (direct & indirect)

• Encouraging holistic socio-economic development and a robust industrial ecosystem at block level • Empower the state's youth to set up new enterprises by providing them opportunities to grow and be a part of the formal economy

• Promotion of locally relevant products and provide an opportunity to state farmers to broaden their horizon – from producers to processors

• Designing and implementing developmental interventions focused on micro and small enterprises at block level, by leveraging cluster approach, to give a thrust to sustainable employment and entrepreneurship opportunities

3. Multi Department Support

The Directorate of MSME (Department of Industries & Commerce) shall implement PADMA in collaboration with Directorate of Industries & Commerce, Town and Country Planning Department and Skill Development &Industrial Training Department.

The key roles and responsibilities of various departments/organizations involved in the execution of the program are as follows:

Department of Industries & Commerce

Directorate of MSME

• Nodal department for conceptualisation and implementation of the overall PADMA policy.

• To identify the focus products across all blocks.

• To establish a dedicated PMU to provide advisory and professional support throughout the program.

• To coordinate with all related departments for various activities related to the program.

• To create a dedicated portal for publicity of the initiative, receipt of applications and monitoring of the programme.

• Finalisation of project profiles/ business plans and updation on dedicated portal.

• To set up Common Facility Centre(CFC) and Business Development Centre (BDC) in PADMA Industrial Blocks

• To invite EoIs and applications from prospective entrepreneurs.

• To scrutinise applications and approvals and facilitate regulatory compliances.

• To enable access to market and credit.

• To dovetail existing Central and State Government programmes for financing needs related to various activities i.e., infrastructure development etc.

• To undertake policy interventions and support State Govt. in development of relevant schemes and policies

Directorate of Industries & Commerce, Haryana

• To facilitate regulatory compliances

• To provide time bound clearances through HEPC

• To help tie up with large players/OEMs in the state for better market access for new entrepreneurs Haryana State Industrial & Infrastructure Development Corporation (HSIIDC)

The HSIIDC shall also endeavour to establish the PADMA industrial clusters in the state. HSIIDC shall develop the basic and common infrastructure and sell industrial plots to MSMEs through an enabling mechanism. HSIIDC will develop the infrastructure through its own funds, and through support under SIIDS scheme. HSIIDC will also undertake the following activities to accomplish its role as an Implementing Agency of PADMA scheme:

• To identify the lands for PADMA clusters within existing estates and other locations.

• To develop basic infrastructure

• To construct common facilities

• To construct industrial sheds and lease out workspace to entrepreneurs

• To allot plots to prospective entrepreneurs

• To estimate the investment requirement for infrastructure development

• Support in evaluation of cases under SIIDS& PCIDS.

Department of Town and Country Planning

• To assist in identifying land for development of industrial blocks

• To facilitate regulatory compliances.

• To support Implementing Agencies to get speedy approvals for land CLUs/NOCs etc.

• To support in preparation of the infrastructure roadmap.

Department of Skill Development and Industrial Training

• To conduct a detailed skill gap study to identify major skill requirements as well as business incubation requirements in the identified block level clusters.

• To mobilise ITIs, polytechnic colleges, technical institutions, training providers (TPs) to provide skilling solutions in the cluster.

• To provide necessary support to mentoring programmes to be conducted in each block.

Haryana Ground Water Authority

• To verify the availability of ground water in the proposed PADMA Block area.

• To authorise water harvesting and water recharging facilities in the Block.

4. Components of PADMA

The program will have the following three building blocks:

1. Infrastructure Support

2. Knowledge Creation, Awareness Generation & Strategic Linkages

3. Handholding & Facilitation704 HARYANA GOVT. GAZ., AUG. 22, 2023 (SRVN. 31, 1945 SAKA) [PART I

4.1. Infrastructure Support

4.1.1. Land parcels measuring 25 acres to 100 acres in each block will be identified and developed. These land parcels will have enabling basic/core/enabling infrastructure and Common Facilities. The Government would aim to provide ready enabling infrastructure at affordable price to new entrepreneurs to start their enterprises, thereby reducing cost of doing business. Overall, it is estimated that an area of over 4000 acres across 143 clusters will be developed as a part of this policy. The land for the project may be arranged by State Govt./ Private agencies willing to participate in the scheme either through purchase or on lease of at least 30 years. The developing agency can secure financial assistance of 50% to 85% from the state government through the State Industrial Infrastructure Development Scheme (SIIDS) for state government implementing agency or PADMA Cluster Infrastructure Development Scheme (PCIDS) for private implementing agency.

4.1.2. Creation of basic/core/enabling& common infrastructure – Implementing Agencies shall provide modern basic/core/enabling infrastructure facilities such as concrete roads, streetlights, power/water supply& distribution, logistics, storm water drainage system, Sewage Treatment Plant (STP), Common Effluent Treatment Plant (CETP), communication networks, fire-fighting stations, common sheds, clean surroundings, common service area that will include auto stands, bus stops, shops etc.

4.1.3. Common Facility Centres: A major component of developing vibrant industrial estates at block level would be provision of state-of-the-art common facilities tailored around identified product categories. The common facilities would aim to support efficient production and enhance competitiveness of enterprises in the cluster. The common facilities would include tool rooms, testing labs, training centres, raw material banks, R&D centres, bank branch, product development facilities, packaging facilities, cold storage infrastructure, exhibition cum convention centres, marketing hubs, warehouses, exhibition centres etc.

4.1.4. Business Development Centres: A key component of every Common Facility Centre shall be a Business Development Centre (BDC) which will be based within the CFC. The BDCs will be like advisory helpdesks housing a range of experts having extensive experience across the value chain of the identified products in each block. Through the BDCs, the prospective entrepreneurs will be provided inputs on key areas like backward & forward linkages; legal & regulatory support, business & financial linkages; technology adoption & process improvements; supply chain management etc.

4.2. Knowledge Creation and Awareness Generation

The second main pillar of the PADMA program is creation of knowledge collaterals and production of material relevant for an entrepreneur to initiate his/her entrepreneurial journey. This would include development of a comprehensive list of business opportunities around a particular product in each cluster. The list of products identified for PADMA clusters is indicative and evolving. Homogenous products of similar nature requiring similar common facilities may be allowed for one (1) PADMA cluster. Additionally, historical/ traditional products of the district, as proposed by the applicant, may also be considered.

4.2.1. Model Project Profiles. Within each block, model project profiles/bankable Detailed Project Reports (DPRs) will be created on basis of a detailed analysis of the product's value chain. The standard profiles would be developed based on different business ideas and will help prospective entrepreneurs make informed decisions about starting an enterprise and would also aid them in obtaining bank finance. The model profiles would highlight requirements around various functional areas of an enterprise including technological processes, resource requirements, production capacities, skill requirements, market prospects along with detailed financial analysis and revenue projections.

Model project profiles will not only help prospective entrepreneurs to better understand various business aspects of setting up an enterprise but will also help Financial Institutions in standardized evaluation of the received proposals. These project profiles shall be finalized in consultation with key ecosystem stakeholders in each block.

4.2.2. Awareness Creation: The state government through the Directorate of MSME will run intense promotional campaign to propagate PADMA and encourage local youth to venture into entrepreneurship. For the awareness, propagation and active participation of the prospective entrepreneurs and youth in the PADMA initiative, a dedicated web- portal shall be launched. The web-portal will be used to share information about the initiative, cluster level information, plot availability, model project profiles, information about Business Development Services (BDS) incentives available, progress made, and achievements etc. Web-portal shall also seek information from prospective entrepreneurs desirous of starting an enterprise ina particular bock under the PADMA initiative.

4.2.3. Strategic Linkages and tie ups with BDS providers: The state government acknowledges the role of BDS providers (technologists, financial consultants, technical institutions, marketing experts, management consultants, workforce providers, quality experts)to ensure effective implementation of PADMA initiative. The government would focus on strengthening the overall BDS ecosystem in each cluster. Engagement with large units/Original Equipment Manufacturers (OEMs) shall also be explored.

Additionally, the state shall endeavour to establish cross-linkages with Haryana Employment Exchanges and Saksham Yuva initiatives to further encourage the transition of state's youth from job-seeker to job provider.

4.2.4. Mentorship program: To ensure the entrepreneurs in the greenfield PADMA industrial parks have adequate knowledge base and industry exposure, the state will run mentorship and incubation programs for prospective entrepreneurs. These programs will be planned and delivered in consultation with key stakeholders such as leading industry bodies, prominent corporates, OEMs/anchor bodies; key Centre/State PSUs, top institutes, R&D bodies in the associated fields.

4.3. Handholding & Facilitation Support

4.3.1. Business and Credit Facilitation: The state government would provision adequate ground level facilitation and handholding support to prospective entrepreneurs to ease their entrepreneurial journey. The state through a network of ground level resources will provide facilitation support for adopting model project profiles, accessing finance linkages, understanding market needs, obtaining required approvals, leveraging government schemes etc. Additionally, since PADMA focuses on holistic development, an extensive handholding and on-site facilitation support shall be provided to youth pertaining to skill development, market linkages, credit facilitation and overall business/regulatory facilitation to fully equip them to benefit from the program & successfully establish and run their enterprise.

4.3.2. Market Facilitation: Effective market linkages shall be the key to ensuring sustainability and success of the clusters. To enhance the footprints of cluster units beyond the local geographic boundaries, e-commerce shall be actively promoted for access to newer markets. The state government will invite leading ecommerce players in the B2B, B2C and B2G verticals to partner with the government under the PADMA program.

4.3.3. Skill Development: For each of the identified clusters, certain sector-specific skill sets shall be required to successfully set-up and operationalize the new units. To fully equip the youth and prospective entrepreneurs to effectively manage the enterprises, curated skill development programs shall be conducted at the block level. The state government would set up Entrepreneurship Development Centres (EDCs) in collaboration with expert agencies like Entrepreneurship Development Institute of India (EDII), National Institute of MSME, MSME Development Institute etc.

4.3.4. Project Management Unit: To successfully implement the PADMA program, develop block level strategy, generate knowledge collaterals, provide effective ground level facilitation support, ensure better coordination among all departments, the Directorate of MSME would engage a dedicated Project Management Units (PMU) through professional agencies at Hub (i.e., Directorate Head Office) and Spoke (Divisional-level). The Hub PMU at Directorate HQ will support the government in overall execution and the Spoke706 HARYANA GOVT. GAZ., AUG. 22, 2023 (SRVN. 31, 1945 SAKA) [PART I PMU at division-level shall deploy a team of facilitation resources in each division for providing handholding & facilitation support to MSMEs.

The Hub team at the HQ shall be primarily responsible for development of State and block level strategy; assessment of block level entrepreneurship opportunities; business profiling and value chain analysis of the identified products; benchmarking with key national/ global clusters; need analysis for infrastructure, common facilities, skills, finance; creation of project profiles; guidance to spoke team; coordination with key stakeholders& government agencies; support the Government in evaluating proposals received under the SIIDS & PCIDS scheme, monitoring and evaluation etc. As a part of the spoke team, divisional level facilitation helpdesks shall be set-up in all the divisions. The facilitation helpdesk will provide three-pronged support to the potential entrepreneurs of the PADMA cluster, in the form of Credit Facilitation (loan syndication, guidance regarding loan products, assistance in availing finance), Marketing assistance (marketing support, etc.) and Business Facilitation (advisory on focus products, regulatory approvals, handholding in compliances, incentives, etc.).

5. Financing the programme

5.1. State Support: As per the 2023-24 Budget Announcement, an outlay of INR 1,000 Crore has been earmarked for providing financial assistance to enable private agencies in setting up of PADMA clusters and encourage new and prospective entrepreneurs to set-up units within PADMA clusters.

Infrastructure development and Common Facility Centre: The state government implementing agencies can leverage SIIDS for creation of basic & common infrastructure in PADMA clusters.

To support private implementing agencies to set up new PADMA clusters, a new scheme named PADMA Cluster Infrastructure Development Scheme (PCIDS) shall be launched. PCIDS will provide financial assistance of 50% to 85%, maximum up to INR 50 Crore, to private IAs for creation of basic, core & enabling common infrastructure in PADMA clusters.

Assistance to Individual Units: Assistance shall also be provided to individual MSMEs for setting-up of units within PADMA clusters:

i. PADMA Venture Capital Fund scheme:

• To provide growth capital to the Micro and Small Enterprises (MSEs), through equity/quasi-equity/ equity like structured instruments.

• The state government will set up a revolving venture capital fund of upto INR 3 Crore per unit, under this scheme to support MSE units inside the PADMA cluster.

ii. PADMA Entrepreneurship Acceleration Scheme:

• To provide easy availability of capital which is essential for entrepreneurs at early stage of growth of an enterprise, the state government will provide financial assistance on innovative idea to Start-ups @ INR 20 Lakh for proof of concept, prototype development, product trails, market entry and commercialization.

• This will help start-ups to progress to the next level where they will be able to raise investments from angel investors or venture capitalists or seek loans from banks/ financial institutions.

iii. PADMA Capital Investment Subsidy Scheme:

• To provide robust incentive framework for attracting investments and generate large scale employment opportunities, the state will offer the capital investment subsidy of 30% up to a maximum of INR 30 lakh to MSE units inside the PADMA cluster.

iv. PADMA Interest Subsidy scheme:

• To increase productivity and reduce the cost of credit, the state government will provide interest subsidy on term loan for MSE units inside the PADMA cluster @ 6% up to a maximum of INR 20 lakh per year.

v. PADMA Designing, Branding, Marketing & Exports promotion scheme:

• A scheme to provide marketing & branding support for market expansion – domestic & international.

• As part of the scheme, reimbursement of 50% upto a maximum of INR 10 Lakh per year shall be provided to MSEs towards the expenses incurred on various marketing & branding activities, such as listing on e-commerce platforms, market intelligence activities, logo and packaging design, digital marketing, adoption of innovative and sustainable packaging solutions, etc.

The investor/units availing incentives under PADMA scheme will not be eligible to obtain incentives under similar scheme of other Policies of State Government

5.2. GoI support: The state government would also leverage support under various programs and key schemes of Government of India towards various components of the PADMA program. For land development and common facilities, the government would endeavour to seek support of Government of India under the Ministry of MSMEs flagship MSE-CDP program, TIES scheme of Ministry of Commerce & Industry as well as various infra schemes of Ministry of Food Processing Industries, Ministry of Textiles, NABARD etc.

The State would also encourage leading MSME and rural development financial institutions like Small Industries Development Bank of India (SIDBI) and National Bank for Agriculture and Rural Development (NABARD) to participate in the program. Low cost funding from SIDBIs Cluster Development Fund (SCDF) and relevant programs of NABARD will be availed to develop and strengthen the block level cluster infrastructure.

6. Monitoring & Evaluation framework of PADMA

To ensure effective implementation and monitoring of the PADMA initiative at ground-level, a robust two-tier governance structure shall be set-up.

The governance structure would comprise of District Level Committees (DLCs) to ensure the successful roll-out of the initiative in each block. At the apex level, a State Level Steering Committee (SLSC) shall be constituted for overall direction to the program, program monitoring, recommending modifications to the scheme document, approval of budget and expenditure, ensuring timely setting up of CFCs and BDCs, hiring and monitoring of dedicated Project Management Unit (PMU), as well as providing facilitation support for regulatory compliances.

6.1. District Level Committee (DLC): This committee will oversee the implementation of the scheme at the block level. The committee shall be primarily responsible for the following:

• Ensure implementation of the initiative at block-level

• Involvement of BDSPs at district level

• Monitor the on-ground handholding and facilitation support being rendered to the micro and small enterprises

• Ensure synergies amongst various departmental initiatives

• Overall supervision for development and implementation of PADMA Industrial Blocks The Constitution of the DLCs shall be as follows:

1. Deputy Commissioner, Chairperson

2. JD/DD, District MSME Centre, Member Secretary

3. JD/DD, District Industries Centre, Member

4. GM, HSIIDC: Member

5. District Town Planner, Member

6. District Skill Coordinator, Member

7. District Lead Bank Manager, Member

6.2. State Level Steering Committee (SLSC): The State Level Steering Committee will be responsible for providing overall direction to the program, approving proposals and monitoring the progress of PADMA Block implementation across various phases.

The committee will be responsible for the following:

• Monitoring the overall implementation of the programme and strategic direction to the initiatives

• Making necessary changes in program design/scheme guidelines as required from time to time • Oversee capacity building activities of state and district officials

• Strategic tie-ups with other relevant organizations

• Ensuring overall promotion and success of the program

• Examination and evaluation of proposals (in the form of concept note comprising of land parcel details, project details, promoter details, proposed basic/core/common infrastructure received from interested agencies (government or private)

• In-principal approval of the proposals

• Recommending proposal for financial assistance under SIIDS or PCIDS or any other relevant scheme

• Budget and expenditure approvals for the Program

• Hiring of relevant agencies including dedicated PMU

• Creation of a dedicated portal for PADMA

• Implementation and facilitation support for obtaining regulatory compliances for PADMA blocks as well as Setting up of MSME units in the PADMA Blocks

• Modifications/Additions in the identified products at the block level

The Constitution of the SLSC will be:

1. Administrative Secretary, Industries & Commerce: Chairperson

2. Representative of Finance Department

3. DG, Directorate of MSME: Member Secretary

4. DG, Directorate of Industries and Commerce: Member

5. MD, HSIIDC: Member

6. Director, MSME Development Institute, Karnal

7. GM, SIDBI Chandigarh: Member

8. Representative, PNB Bank

7. Implementation of PADMA

The applicant (both government or private) shall submit the proposal in the form of a concept note, comprising of land parcel details, project details, details of IA, broad basic/ core/enabling infra facilities to be set-up, etc. to the Directorate of MSME.

The concept note shall be put up to the State Level Steering Committee (SLSC) for examination & in-principal approval.

The SLSC shall recommend the project for SIIDS or PCIDS, whichever is relevant.

Subsequently, the implementing agency shall prepare and submit a detailed project report (DPR) in accordance with the concerned scheme guidelines. The DPR will be accorded approval in SLSC as per PCIDS guidelines.

Annexure-I

The list of products mentioned below for PADMA clusters is indicative and evolving. Homogenous products of similar nature requiring similar common facilities may be allowed for one (1) PADMA cluster. Additionally, historical/ traditional products of the district, as proposed by the applicant, may also be considered.

10499—C.S.—H.G.P., Pkl.