Madhya Pradesh Small Scale Industries Revival Scheme

The Madhya Pradesh Government has introduced the Small Scale Industries Revival Scheme (MPSSIRS) to aid in the revival of sick industrial units, especially those not under the purview of the Board for Industrial and Financial Reconstruction (BIFR) within the small-scale industrial (SSI) sector. This scheme aims to rejuvenate these units by offering a comprehensive rehabilitation package facilitated by public sector banks. Below, we examine the scheme's specifics and benefits.

Applicability of the Scheme

Enterprises must satisfy specific criteria to qualify for the Small Scale Industries Revival Scheme:

The scheme exclusively serves micro and small-scale industrial units.
Manufacturing ancillary units whose total investment in plant and machinery exceeds Rs. 5 lakhs (excluding land and building) do not qualify for this scheme.
It excludes service and business enterprises and industrial units that do not qualify for departmental subsidy schemes and tax exemptions.

Reliefs

The Madhya Pradesh Government, in preparing rehabilitation packages for micro/small scale units and non-BIFR sick industrial units, offers the following reliefs and concessions:

Fiscal Reliefs

Eligible units/sectors can avail themselves of several reliefs and concessions from state government departments or agencies. The Commerce, Industries, and Employment Department allocates substantial funds to operate the scheme and reimburse government agency losses, with relief availability dependent on annual fund constraints.

Commercial Tax Department

The units will be allowed to settle commercial tax arrears through 36 monthly or 12 quarterly installments, inclusive of interest/penalty. Alternatively, units can choose to pay off assessed tax in one lump sum without incurring interest/penalty.

Madhya Pradesh Electricity Distribution Company

The eligible units will receive various reliefs from the Madhya Pradesh Electricity Distribution Company:

Waiver of minimum charges during closure period up to Rs. 1 lakh, with no refund for already paid charges.
In cases of power disconnection due to unpaid bills or terminated agreements, new security deposits will not be required.
Units can pay electricity bill arrears in six half-yearly installments from the scheme's sanction date.
Interest on dues during closure will be waived up to Rs. 1 lakh for reconnection, with additional service charges waived up to Rs. 25,000.
Penal charges will be waived up to Rs. 2,500, and rehabilitation actions will align with the Electricity Act, 2003.

Commerce & Industry Department

Small scale units with sanctioned rehabilitation schemes that avail new term loan amounts under the revival package will be eligible for interest subvention as per current MP Government rules. Moreover, viable closed units will receive new unit facilities from the date of revival, and additional investments in plant & machinery may qualify for State Capital Investment Subsidies.

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Continuation of Incentives sanctioned earlier

This scheme benefits sick units with management changes. The revived unit remains eligible for previously sanctioned facilities during the unexpired eligibility period.

Additional Relief

Beyond fiscal concessions, additional reliefs may be granted to eligible units:

Exemption from stamp duty on agreements registered due to the scheme's implementation.
The scheme operates through a Single Window System, simplifying procedures.

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Frequently Asked Questions

Common questions about Madhya Pradesh Small Scale Industries Revival Scheme.

The MPSSIRS is a scheme launched by the Government of Madhya Pradesh to facilitate the revival of sick industrial units and other industries in the small-scale sector that are beyond the scope of the Board for Industrial and Financial Reconstruction (BIFR). Under this scheme, public sector banks are to provide a rehabilitation package to the sick small-scale industrial units.

The MPSSIRS applies only to micro and small-scale industrial units. Ancillary units in the manufacturing sector whose total investment in plant and machinery exceeds Rs. 5 lakhs (excluding land and building) are not eligible. Service and business enterprises, as well as industrial units ineligible for subsidy schemes and tax exemptions from the department, are also excluded.

Eligible units can avail reliefs and concessions from various departments and agencies of the State Government, including the Commercial Tax Department, Madhya Pradesh Electricity Distribution Company, and the Commerce & Industry Department. These reliefs include the facility to pay arrears in instalments, waiver of minimum charges and penalties, interest subvention on new term loans, and capital investment subsidies.

Under the scheme, eligible units can pay their arrears of commercial tax, i.e., assessed tax, in 36 monthly instalments or 12 quarterly instalments with interest/penalty. Alternatively, they can deposit the assessed tax amount without interest/penalty in one lump sum.

The Electricity Distribution Company provides several reliefs, such as waiving minimum charges for the closure period (up to Rs. 1 lakh), allowing payment of arrears in instalments, waiving interest on dues for the closure period (up to Rs. 1 lakh), waiving additional service charges for reconnection (up to Rs. 25,000), and waiving penal charges (up to Rs. 2,500).

Yes, the MPSSIRS allows a revived unit to continue receiving incentives sanctioned to the earlier unit for the unexpired eligibility period, even if there has been a change in management.

The scheme may recommend exemption from stamp duty on agreements registered as a result of the revival scheme. It also aims to implement the scheme through a Single Window System for ease of application and processing.

Significant funds are provided in the budget allocation of the Commerce, Industries and Employment Department to operate the scheme and reimburse financial losses to the Government and its agencies. However, the number of units granted relief is limited by the availability of funds in any given year.

Yes, if a small-scale unit sanctioned a rehabilitation scheme under the MPSSIRS avails a new term loan amount as part of the revival package, it is eligible for interest subvention as per the existing rules of the Madhya Pradesh Government.

Yes, if a revived unit makes additional investments in plant and machinery, it is eligible for the State Capital Investment Subsidy as per the existing rules and eligibility criteria.