Industry Facilitation

Steps to be followed by an entrepreneur

• Collect maximum information about the project or products proposed to be manufactured
• For the purpose, collect/prepare a project profile which would outline brief information on the project or products to be manufactured
• Decide location where the project is likely to set up
• Learn about the procedures and formalities required to be completed before taking up physical implementation of the project

Get a detailed project report prepared which interalia should include following components

• Market potential of the products to be manufactured
• Characteristics of the Location
• Land and building requirements
• Requirements and availability of Plant and Machinery
• Requirement of other utilities namely power, water, steam etc.
• Assessment of Working Capital requirements
• Technology tie-up
• Raw materials with specifications
• Manpower requirements
• Schedule of Implementation
• Estimates of Project Cost
• Tie up of means of finance
• Cost of Production and profitability
• Break even Point
• Internal Rate of Return
• Cash flow
• Debt service Coverage Ratio to establish financial viability
• Economic Benefits

1. Industries licensing policy are regulated under the Industries Development Regulation Act 1951
2. At present Industrial Licensing for manufacturing is required in case of :-
   • Industries under compulsory licensing
   • Manufacture of item reserved for SSI sector by non SSI units
   • Project location attracts locational restrictions

Compulsory Licensing

Following industries require compulsory industrial licence under the provisions of IDR Act, 1951.

1. Distillation and brewing of alcoholic drinks.
2. Cigars and cigarettes of tobacco and manufactured tobacco substitutes
3. Electronic Aerospace and defence equipment: all types;
4. Industrial explosives, including detonating fuses, safety fuses, gun powder, nitrocellulose and matches;
5. Hazardous chemicals;
   • Hydrocyanic acid and its derivatives
   • Phosgene and its derivatives
   • Isocyanates and di-isocyanates of hydrocarbon, not elsewhere specified (example: Methyl Isocyanate).

Large industries undertaking manufacture of items reserved for SSI units

The Government has reserved certain items for exclusive manufacture in the small scale sector. Non-small scale units can undertake the manufacture of items reserved for small scale sector, only after obtaining an industrial licence. In such cases, the non-small scale unit is required to undertake an obligation to export 50% of the production of SSI reserved items

Locational Restrictions

Industrial undertakings are free to select the location of their projects. Industrial licence is however required if the proposed location is within 25 km of standard urban area limits of 23 cities having a population of one million as per 1991 Census. In Gujarat, this provision is applicable in the case of 3 cities namely Ahmedabad, Vadodara and Surat.

The Locational restriction however does not apply:

1. If the unit were to be located in an area designated as an “industrial area” before the 25th July, 1991.
2. In the case of Electronics, Computer software and Printing and any other industry, which may be notified in future as “non polluting industry”.

The location of industrial units is subject to applicable local zoning and land use regulations and environmental regulations

Procedure for obtaining Industrial Licence

Industrial licence is granted by the Secretarial of Industrial Assistance (SIA) on the recommendation of the Licensing Committee. For this purpose, Online application in the prescribed form (Form FC-IL) (with Applicable fees) may be submitted to SIA at ebiz portal (www.ebiz.gov.in) specially developed by GOI and also available on www.dipp.gov.in

Procedure for filing IEM

• Industrial undertakings exempt from industrial license are only required to file an online Industrial Entrepreneur’s Memorandum (IEM) in Part ‘A’, in the prescribed format (Form IEM) with Secretariat for Industrial Assistance (SIA), Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry, Government of India, New Delhi at ebiz portal (www.ebiz.gov.in) and also available on www.dipp.gov.in
• Submission of IEM form requires a fee of Rs.1000/- for up to 10 items proposed to be manufactured. For more than 10 items an additional fee of Rs.250/- for up to 10 additional items needs to be paid.
  • On filing the IEM, an acknowledgement containing the SIA registration No. for future reference is issued. This acknowledgement is sent by post and no further approval is required.

Upon commencement of commercial production, industrial undertakings need to file online information in Part-B of the IEM to SIA. No fee is to be paid for filing Part-B.

All the fees payment mode is online or offline.

Government of India under the Ministry of Micro, Small and Medium Enterprises have in October 2006 enacted Micro, Small and Medium Enterprises Development Act 2006. Under the Act, Micro, Small and Medium Enterprises are classified as under:

The small and medium enterprises as classified above, are required to file Entrepreneurs Memorandum (EM) Part-I to District Industries Centre for starting an industrial project. On completion of the project, the entrepreneur concerned is required to file Entrepreneurs Memorandum (EM) Part-II.

District Industries Centers in all the districts of the state and the institutions such as Gujarat Industrial Development Corporation (GIDC) and Gujarat State Financial Corporation (GSFC) have been instrumental in accelerating the pace of development of SSIs. On the other hand, Small scale industries have also played an important role in dispersal of industries.

Earlier there was a system of granting registration to small scale industrial units by the District Industries Centre. These units are now required to file EM Part-II as Micro, Small or Medium Enterprises as classified above. On line submission & Processing of EM-I & EM-II has been made available in website w.e.f. 01/07/2013.

Following the enactment of the MSME Development Act from 2nd October, 2006, registrations of all the MSMEs came within the purview of the Industries Commissionerate. Surat district leads the state with the highest number of SSI units followed by Ahmedabad, Rajkot and other districts. Over a period of time, Gujarat has registered a sizeable growth of SME sector.

There are 261760 MSMEs Registered in Gujarat till March 2014. Following tables presents the details of the year wise, district wise and group-wise registrations of MSMEs in Gujarat from 2-10-2006 to 31-3-2014, respectively.

There were only 2169 small industries in 1961 at the time formation of the state. The number of SSIs increased continuously and has reached to over to 3,12,000 by September 2006. This may be observed from the following table: