Orissa SMEs resent delay in notifying incentives

Small and Medium Enterprises (SMEs) in Orissa are concerned over non-issuance of the required notification for reimbursement of Value Added Tax (VAT) by the state government. This is despite the budgetary provision of Rs 1 crore in the 2009-10 state budget.

Non-issuance of the VAT reimbursement notification has created difficulties for SMEs, particularly those which set up their units after the announcement of the Micro, Small and Medium Enterprise Development Policy by the state government at the beginning of 2009.

Similarly, some processed food industries which had expressed a desire to come to the state are reconsidering their plans. Since the state government has declared the food processing sector as a thrust sector, these units are eligible for 75 per cent VAT reimbursement. However, this is not happening and the liability of the units is increasing, sources said.

When contacted, Niranjan Mohanty, president of the Utkal Chamber of Commerce and Industry (UCCI), said the state government is yet to issue certain notifications pertaining to the Industrial Policy Resolution, 2007. “Unless a policy is implemented, it is meaningless to have a policy,” he added.

For example, Ceramics and Teracotta Tiles Manufacturing Unit, which came up at Balasore, attracted by the adoption of the Micro, Small and Medium Enterprises Development (MSMED) policy by the Orissa government, is not viable in the absence of the VAT reimbursement notification.

It may be noted, however, that over and above the fiscal incentives available in the IPR, 2007, new MSME units are entitled to a capital investment subsidy of 10 per cent of the fixed investment, subject to an upper limit of Rs 8 lakh.