(MENAFN- KNN India) Government of Tamil Nadu will provide financial assistance to MSME clusters to move out of City / Town areas and start at new locations. The new clusters will be provided funds for developing infrastructure and set up common facility centres.
Clusters account for 80 per cent of the manufacturing in the MSME sector and enhances competitiveness of the MSMEs through specialised operations and aggregated manufacturing capacity. However, most of the clusters today are located in congested areas with no scope for expansion and suffer from poor infrastructure € Road, Drainage, Power, Effluent Treatment and other essential utilities.
To address the above issues, Tamil Nadu Government has decided to assist MSMEs to set up clusters through special purpose vehicles (SPVs) in new locations, to the extent of 75 per cent of the development costs including providing electricity, water etc. up to Rs 15 Crore.
For setting up of ancillary facilities like common facility centre etc. the assistance will be 50 per cent of the project cost to the maximum of Rs 10 crore. Clusters with at least 20 member enterprises and 50 acres of land will be eligible for the support. However, for micro enterprises the area of the cluster may also be reduced to 10 acres.
The initiative may provide great fillip to the MSME clusters of Tamil Nadu which, in spite of excellent growth potential, are not being able to expand due to shortage of land at their existing location. The scheme will also address the issues of pollution control in the clusters by assisting setting up of common effluent treatment plan.
The scheme will also bring PPP approach in the area of industrial infrastructure. At present, development of industrial infrastructure is in the exclusive domain of the state agencies like industrial development corporations. The projects suffer from long delays besides prohibitive cost of the plots due to internal inefficiencies of the executing agencies. Of late, the issue of land acquisition has emerged as another hurdle and often industries are forced to shell out additional amount, over the contracted costs, to compensate the Government.
All these issues will be addressed when the entrepreneurs' SPV will privately purchase the land and take up developmental work on its own. There may also be innovative solutions to workplace related problems of new entrepreneurs; viz., plug and play workplaces, flatted factories etc.
Availability of workspace is a major impediment in 'Doing Business' in India and we look forward to more of such initiatives from other states to encourage development of infrastructure for MSMEs in PPP mode. (KNN Bureau)
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.