Orissa units seek job linked subsidy

The micro, small and medium enterprises (MSMEs) in Orissa have requested the state government to introduce an employment generation-linked subsidy scheme in line with the scheme adopted by neighbouring West Bengal. Under the schem, the subsidy will be linked to the employment generated by a unit instead of being linked with investment as is currently the practice.

The industry has suggested that any unit with direct employment generation of 10 and more and having an investment of not more than Rs1 lakh per job generated needs to be entitled to get reimbursement of its payments made towards the Employees State Insurance (ESI) and Employees Provident Fund (EPF) in the form of subsidy.

This reimbursement will be 75 per cent of such payments for a period of 7 years. It will be payable annually based on the statutory limit subject to the condition that the unit has paid its contribution towards the ESI and EPF on due dates.

Niranjan Mohanty, president, Utkal Chamber of Commerce and Industry (UCCI) told Business Standard.“We have requested the Orissa government to introduce a system of employment generation-linked subsidy, which will promote more employment in the MSME sector.”

In its response to the draft MSME development policy, UCCI has suggested that the thrust sector needs to be broad-based to include new industrial units in agro processing (with direct capital investment of Rs 10 crore and 100 jobs created), automobiles (Rs 300 crore investment and 500 jobs created ), auto components (Rs 50 crore investment and 200 jobs creation), textile ( Rs 20 crore investment and 500 jobs creation) and apparel with investment of Rs 5 crore with generation of 500 jobs creation.

Ancillary and downstream industries with an investment of Rs 10 crore and 100 jobs creation also need to be defined as thrust sector. In case of a cluster, total investment and employment generated need to be considered for qualifying as thrust sector.

In another suggestion, the UCCI has pointed out that the MSME association and the Special Purpose Vehicles (SPVs) of the MSME clusters need to be encouraged to set up sub-contract exchange and consortium including consortium for marketing.

Such consortium and the sub-contract exchanges should be recognised by the directorate of industries and all the benefits allowed to MSMEs should be extended to these bodies.

Strongly arguing for price preference at the time of purchase of goods from the local MSMEs by the state government, Mohanty said that even if the price quoted by the local medium and large industries and bidders from outside the state stands lowest, local MSMEs and khadi and village industrial units including handloom and handicrafts should be given preferential treatment.

The state government should have a business-2-business portal to facilitate marketing of the products produced by the MSMEs in the state. A lot of enquiries can come through such a portal as it happened in countries like China.