New agri-business policy for Gujarat within two months

With its focus on employment generation and development of the small and medium enterprises (SMEs) for next five years, the Gujarat government is likely to dole out dozens of sops and incentives to enhance competitiveness of SME units operating in agriculture. The creation of the Cluster Advisory Institute (CAI) to speed up cluster development is also on the cards.

The Gujarat government, along with the state-run Gujarat Agro Industries Corporation (GAIC), is currently working on a new Agri Business Policy-2008, which is expected to be announced within two months. The GAIC has prepared the initial draft of the policy which, among other things, proposes a slew of incentives and sops for SMEs in agriculture sector.

According to the primary draft, the state government plans to come out with a technology acquisition scheme for SME units. The policy draft proposes 50 per cent grant for acquiring technology. The maximum grant amount for acquisition of technology would be up to Rs 1 crore. For energy and water conservation, the policy is likely to give 20 per cent of the equipment cost, subject to maximum limit of Rs 10 lakh.

To promote cluster development in agriculture through public-private partnership, the draft policy is expected to give financial assistance up to 80 per cent for training and 75 per cent for other components with a ceiling of Rs 10 crore. The units will be required to form the cluster within a period of 3-5 years.

The constitution of Cluster Advisory Institute (CAI) has also been recommended in the draft policy, which also likely to provide subsidies for rehabilitation of sick units. The sops proposed in the draft policy for rehabilitation of sick units may include interest subsidy of 5 per cent per annum limited to Rs 10 lakh for 3 years, 50 per cent cost assistance with a ceiling of Rs. 25 lakh for registering patent of any product by SMEs in agriculture sector, 50 per cent subsidy on cost of diagnostic study with maximum subsidy of Rs 1 lakh per case.

Government officials also made it clear that the proposed incentives are subject to change as the government is yet to come out with the final draft of the policy. The state agriculture department plans to convene a meeting of all the stakeholders of agriculture sector to discuss the sops and incentives mooted by the government. 

“The new policy will be finalised after incorporating the suggestion made by the stakeholders, a meeting of whom is likely to take place at the end of this month,” government officials added.