Uttar Pradesh Government Initiatives and Schemes to Support MSMEs

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Uttar Pradesh is a land of enormous potential, but its true worth has yet to be realized. A location with a dense population and a large customer base, an agrarian economy, and a young population have yet to be recognized as an industrial destination. Uttar Pradesh, India’s most populous state, has grown tremendously in terms of ease of doing business in recent years, with over 200 million inhabitants and around 150 million eligible voters.

Uttar Pradesh boasts the country’s largest MSME population of over 90,000 businesses. According to data from the MSME Ministry’s annual report for 2020-21, these 90 thousand MSMEs represent 14% of India’s total MSME count of 6.33 crore.

Because of its abundant resources, trained and semi-skilled workers, and large consumer market, the state has great potential for industrial development. The state government has been taking the necessary steps to attract industries and create an enabling environment for them to start new businesses and expand existing ones by maximizing their investment potential.

Although the state is landlocked, it is well connected to the rest of the country via highways, railroads, and air. Natural resources abound in UP, including minerals, forests, flora and fauna. Large areas of lush rural plains and a wide river network provide opportunities for agriculture and food processing.

Under the Industrial and Service Sector Investment Policy of 2004, the state provides a variety of subsidies, fiscal and policy incentives, as well as help to firms. Furthermore, the state has well-crafted I.T., biotech, and tourism regulations.

To summarize, UP has the following qualities that make it the best for business establishments:

  • A large workforce

Because of its enormous pool of talented workers, the state is an attractive location for knowledge-based industries. There is also a large reservoir of semi-skilled and unskilled labor in the state.

  • Infrastructure development

The state’s social, physical, and industrial infrastructures are all well-developed. It also offers excellent access to all major cities, thanks to four national highways, six airports, and rail lines. In recent years, the state has seen significant infrastructure development. The number of industrial clusters/hubs and public-private partnerships in the infrastructure domain has increased significantly.

  • Political stability

A single-party administration guarantees political stability. Through a variety of laws and incentives, the state government has worked to create a favorable economic climate.

Overview of MSME Sector in Uttar Pradesh

Uttar Pradesh’s MSME sector is vital. These businesses not only help provide large-scale employment possibilities at a cheaper cost of capital, but they also assist in the industrialization of rural and backward areas, eliminating regional imbalance and ensuring a more equitable distribution of national revenue and wealth. As ancillaries, these small and medium-sized businesses augment and complement larger and medium-sized businesses.

In light of its commitment to modern efficiency, work creation, flexibility, versatility, and product commitment, the MSME sector is the backbone of any country’s economic advancement and development. MSME industries are a significant part of the UP economy in terms of creating jobs and earning foreign currency through exports. In Uttar Pradesh, the MSME sector produces over 60% of all industrial production.

Uttar Pradesh is a main exporter of MSMEs in classifications like detailed work, designing merchandise, rugs, readymade garments, etc., on the grounds that it has the greatest number of MSME units in the country. With a complete remarkable of Rs 570 billion toward the finish of December 2017, Uttar Pradesh saw the biggest development in Micro, Small, and Medium Enterprises (MSME) credit.

Vision of state government towards the growth of MSME 

Uttar Pradesh’s government is working hard to foster MSME growth. On the strength of One District, One Product (ODOP) and other MSME promotional programs, the government aims to increase MSME exports to Rs 5 trillion in the next several years.

Many summits are held where entrepreneurs are offered loans in the hopes of creating many jobs. Uttar Pradesh is known for its local industries, with around 75 districts creating one-of-a-kind products. The government intends to arrange local items and welcome businesses to brand and market them internationally.

The state government has chosen to carry out the U.P. Micro, Small and Medium Enterprises Promotion Policy  2017, considering the area’s critical commitment to advancing business, independent work, and occupation creation, as well as expanding per capita pay. The policies aim to make Uttar Pradesh a desirable investment destination and an example of job development. This can be accomplished by establishing a high-end, technology-driven administrative system that will oversee the construction of new units, the growth and upgrade of existing units, and give entrepreneurs end-to-end assistance. The ultimate goal is to eliminate regional differences in terms of entrepreneurship, employment, per capita income, and gaps between social classes.

State Government Initiative and Schemes 

  1. One District, One Product (ODOP) 

This initiative intends to establish product-specific traditional manufacturing centers in 75 districts across Uttar Pradesh. This will boost traditional industries in several districts across the state. The ODOP program has also received plaudits from India’s Prime Minister, Shri Narendra Modi, who described it as “an extension of Make in India.” The policy provides financial support for the expansion of specialized product manufacture through marketing, skill development, common facility development, and MSME company development.

Each of the state’s 75 districts has been designated a product that has a considerable manufacturing competitive advantage due to the presence of a historic MSME industrial base. Chikankari in Lucknow, silk textiles in Varanasi, and the locks and hardware sector in Aligarh are examples of well-established value chains. The ODOP initiative intends to reach every district in the state by offering a comprehensive assistance package for selected products, including improved access to technology, markets, funding, and skills.

  1. Uttar Pradesh Chief Minister Youth Self Employment Scheme

The Mukhyamantri Yuva Swarozgar Yojana was presented by the Uttar Pradesh government to empower independent work possibilities for the state’s informed yet jobless youth. An online interface with start to finish computerization has been worked on by the National Informatics Center (NIC) UP State Center to give a solitary window framework to conspire application, removal, and ongoing checking. On February 19, 2020, Chaudhary Udaybhan Singh, Hon’ble Minister of State for MSME and Export Promotion, Government of Uttar Pradesh, launched the platform.

Banks are allowed to grant loans up to Rs.25 lakh for setting up enterprises and Rs.10 lakh for the service industry under the scheme. The state government can also provide 25% margin money, up to Rs 6.25 lakh for the industry sector and Rs 2.50 lakhs for the other sectors.

  1. Industrial Investment & Employment Promotion Policy of Uttar Pradesh 2017

Considering the economic forces at play at the Indian, Asian, and global levels, the Industrial Investment & Employment Promotion Policy of Uttar Pradesh 2017 will try to utilize the state’s inherent strengths while establishing new ones and addressing its underlying shortcomings. The strategy will strive to establish a framework for stabilizing and improving current industries, as well as attracting and realizing new foreign and domestic industrial investments.

The Industrial Investment and Employment Promotion Policy of Uttar Pradesh 2017 plans to make the express a broadly and globally serious venture objective, creating the position and energizing the state’s long haul, comprehensive, and adjusted financial growth.

  1. Export Promotion Policy

The goal of this strategy is to promote export development and competition by providing required export-related assistance to export goods and services and constructing an expanding technical and physical infrastructure to increase state exports. Aside from that, intending to encourage exports, provide required support for the growth of industries’ export potential, and identify worldwide market opportunities for items created locally / in the country by implementing optimal export practices to promote capacity development.

  1. Uttar Pradesh Startup Policy 2020 

The state government wants to instill an entrepreneurial culture in schools so that pupils can learn the values of entrepreneurship from the start. This project will not only raise the bar for student learning but will also assist in the development of future entrepreneurs.

The strategy intends to assist the formation of E-Cells in colleges, Incubators in institutes of higher learning, and Centers of Excellence to animate innovative work in arising advancements, in addition to other things.

  1. Uttar Pradesh I.T. & Start-up Policy

The Uttar Pradesh I.T. and Start-up Policy plan to take advantage of the innovation area’s true capacity as a great harbinger of progress, receiving the rewards of occupation creation, development, and in general financial development. By developing an enabling policy framework and adopting proactive measures to translate these policies on the ground, the State Government has ushered insignificant change. The twin cities of Noida and Greater Noida have grown into major software and start-up centers in Uttar Pradesh.

The State of Uttar Pradesh is making commendable efforts to foster innovation and entrepreneurship and encourage youth to become “Job creators” rather than “Job seekers.” An INR 1000 crore Uttar Pradesh Start-up Fund is being set up to provide credit to UP-based start-ups exclusively. Udyog Bandhu has implemented a single-window clearance procedure to ensure the formation of a favorable business climate through ease of doing business changes.