GOVERNMENT OF ANDHRA PRADESH

ABSTRACT

Industries & Commerce Department – Andhra Pradesh MSME & Entrepreneur

Development Policy, 4.0 (2024-29) / One Entrepreneur, One Family by 2030 -
Orders – Issued.
---------------------------------------------------------------------------------------------
INDUSTRIES & COMMERCE (PROGRAMME-I) DEPARTMENT

G.O.Ms.No.69 Dated:26/10/2024
Read:

E-file received from the Director of Industries, e-file No. INC02-20029/101/

2024-DD-INFRA-DOI (Computer No. 2583494).

***
ORDER:

In the reference read above, the Director of Industries has stated that the
GoAP has directed the Department or Industries to formulate a new Andhra Pradesh
MSME & Entrepreneur Development Policy with the aim or spurring the growth or
MSMEs in the State, transforming Andhra Pradesh into a competitive, inclusive, and
preferred global manufacturing destination and to promote the AatmaNirbhar (Self-
reliant) India by 2047 vision and foster a dynamic MSME ecosystem, increasing the
competitiveness of the MSME sector in Andhra Pradesh.

2. The Director of Industries further informed that the MSME sector is

considered as a growth engine contributing towards reducing regional imbalances,
poverty alleviation and assuring more equitable distribution of national income and
wealth. MSMEs account for 50 percent of global GDP representing 90 percent
businesses and ~70 percent employment globally. Nationally, the sector contributes
significantly towards overall growth of industrial economy with a contribution of 30
percent to India’s GDP, and around 48 percent of total exports. Being a source or
employment for around 110 million people, MSME sector ranks second after
agriculture sector, which is the largest employer. With approximately 63.4 million
units, MSMEs contribute about 33.4 percent of India’s manufacturing output.

3. Further, the Director of Industries has stated that, in preparation of this

policy, the Department of Industries conducted extensive consultation meetings
with industrial associations, mega industries, and departments at the district and
state levels to solicit feedback from stakeholders. After multiple rounds of review
and revisions with relevant departments and officials, the DoI has submitted a new
Andhra Pradesh MSME & Entrepreneur Development Policy, 4.0 (2024-29).

4. The remarks of the Finance Department have been received vide e-File No:
INC01-IND0CIET/39/2024-PROG-I (C.No. 2553542) that the pay-out period of the
incentives may be rationalized and Technology Upgradation incentive and Capital
Subsidy should be mutually exclusive and Total subsidy/ incentive must be limited

Page 1 of 38
to 75% or FCI. Department may take an appropriate call regarding additional
capital subsidy for women/ SC-ST/ specially abled entrepreneurs.

5. Government after careful examination of the proposal, hereby introduce the

Andhra Pradesh MSME & Entrepreneur Development Policy, 4.0 (2024-29). The
policy aims to achieve the ambitious goal of "One Entrepreneur, One Family" by
2030. The detailed policy is appended at Annexure.

6. The Incentives mentioned in the policy will be extended to eligible Industries

as per the operational guidelines to be notified separately. The Director of
Industries, Mangalagiri and the CEO, AP MSME Development Corporation,
Vijayawada shall take necessary action for implementing operating guidelines for
this Policy.

7. This order is issued with the remarks of the Finance (FMU-I&I, Energy and
I&C) Department as mentioned above.

(BY ORDER AND IN THE NAME OF THE GOVERNOR OF ANDHRA PRADESH)

N. YUVARAJ
SECRETARY TO GOVERNMENT & CIP

To
The Director of Industries, APIIC Towers, Mangalagiri.
The CEO, AP MSME Development Corporation, Vijayawada.
The VC&MD, APIIC Ltd., Mangalagiri
The VC & MD, APIDC Ltd., Hyderabad.
Copy to:
The Director of Handlooms and Textiles, Yerrabalem, Mangalagiri.
The Director of Mines and Geology, Ibrahimpatnam, Vijayawada.
The Managing Director, Andhra Pradesh State Financial Corporation,
Tadepalli, Guntur.
The Principal Secretary, Finance Department.
The Secretary, Finance Department.
The Secretary, Social Welfare Department.
The Secretary, Tribal Welfare Department.
The Special Chief Secretary, Revenue (CT/LA) Department.
The Special Chief Secretary, Irrigation & CAD (Reforms) Department.
The Special Chief Secretary, Energy Department.
The Secretary to Government, I&I Department.
The LFB & IMS Department.
The Accountant General, Andhra Pradesh, Hyderabad.
The Convener, State Level Banker’s Committee, Vijayawada.
The General Manager, Small Industry Development Bank of India (SIDBI).
The Pay and Accounts Officer, Vijayawada.
All District Collectors through Director of Industries, Mangalagiri.
All Heads of Departments through Director of Industries, Mangalagiri.
All Departments of Secretariat, Velagapudi.

Page 2 of 38
All Govt. Companies/Corporations through Director of Industries, Mangalagiri.
All General Managers, District Industries Centre in the State through DoI.
The P.S. to Addl. Secretary to Chief Minister, Andhra Pradesh.
The P.S. to Chief Secretary to Government, Andhra Pradesh.
All Private Secretaries to the Ministers.
All Sections in the Department.
Sf/Sc

//FORWARDED::BY ORDER//

SECTION OFFICER

Page 3 of 38
 ANNEXURE

Andhra Pradesh
MSME & Entrepreneur Development
Policy 4.0 (2024-2029)
One Family One Entrepreneur

Industries Department
Government of Andhra Pradesh

Page 4 of 38
Contents
1. Preamble……………………………………………………………………..……………..8
2. Policy Period and Applicability………………….……………………….…..…………11
3. Policy Roadmap…………………………………………………….………..……………12
4. The Policy Pillars……………………………………………………...…….…………….15
5. Financial Incentives……………………………………………………..………………..31
6. Incentives and Concessions for MSMEs………………….…………………………..33
7. Administration of the Policy…………………………………………………….………36

Page 5 of 38
Abbreviations
AE Advanced Estimates
AP Andhra Pradesh
APIDC Andhra Pradesh Industrial Development Corporation Limited
APIIC Andhra Pradesh Industrial Infrastructure Corporation
APMSMEDC AP MSME Development Corporation
APPCB Andhra Pradesh Pollution Control Board
APSSDC Andhra Pradesh State Skill Development Corporation
APTPC Andhra Pradesh Trade Promotion Corporation
BC Backward Caste
BDS Business Development Services
BIS Bureau of Indian Standards
BRAP Business Reforms Action Plan
CAGR Compound Annual Growth Rate
CBIC Chennai Bengaluru Industrial Corridor
CFCs Common Facility Centers
CGTMSE Credit Guarantee Fund Trust for Micro and Small Enterprises
CoD Commercial Operation Date
PSEs Central Public Sector Enterprises
DGFT Director General of Foreign Trade
DIC District Industries Centres
DIPEC District Industrial and Export Promotion Committee
DISCOMs Distribution Company
EoDB Ease of Doing Business
EPI Export Preparedness Index
ESDP Entrepreneurship Skill Development Programme
ESG Environmental, Social and Governance
G.O. Government Order
GDP Gross Domestic Product
GHP Good Hygienic Practices
GMP Good Manufacturing Practices
GoAP Government of Andhra Pradesh
GOI Government of India
GSDP Gross State Domestic Product
GTIH Global Trade & Innovation Hub
HACCP Hazard Analysis and Critical Control Point
HBIC Hyderabad Bengaluru Industrial Corridor
ICT Information and Communication Technologies
IEC Importer Exporter Code
INCAP Infrastructure Corporation of AP
IOT Internet of Things
IT Information Technology

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 LEADS Logistics Ease Across Different States
MSECDP Micro & Small Enterprises Cluster Development Program
MSEs Micro & Small Enterprises
MSME Micro, Small and Medium Enterprises
ODOP One District One Product
ODR Online Dispute Resolution
OEMs Original Equipment Manufacturers
PCPIR Petroleum, Chemicals and Petrochemicals Investment Region
PMS Procurement & Marketing Support
PoC Proof of Concept
PPP Public Private Partnerships
R&D Research and Development
RBSMs Reverse buyer seller meets
R-TBI Rural - Technology Business Incubator
SC/ST Schedule Caste - Schedule Tribe
SDG Sustainable Development Goals
SEZ Special Economic Zone
SIPB State Investment Promotion Board
SIPC State Investment Promotion Committee
SPSEs State Public Sector Enterprises
SPSUs State Public Sector Undertakings
STEM Science, Technology, Engineering, and Mathematics
TReDS Trade Receivables Discounting System
VCIC Vizag Chennai Industrial Corridor
ZED Zero Defect Zero Effect

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1. Preamble
India is poised to become the world’s 3rd largest economy and transcend the USD 5
trillion GDP by 2025 and USD 10 trillion by 2030 mark. The economy is paving its way
towards being self-reliant, propelled by favorable tailwinds in demographics,
consumption patterns, open market economics, conducive and forward-looking policy
environment and technological prowess. The MSME sector is set to play a pivotal role
in reaching India’s vision to be a developed nation by 2047.
With over 40 percent of the world’s consumption and 60 percent of global GDP growth
contributed by Asia, the world’s economic center of gravity is shifting back. Amidst the
constantly changing global order the challenges faced by the MSMEs have also
undergone profound changes. While addressing the pre-existing conventional
challenges, Indian MSMEs in today’s times, must embed the sustainability
considerations regarding use of renewables and net zero emission in their production
processes to become globally reputable. MSMEs also need to reposition themselves
in accordance with the evolving business practices of larger companies & OEMs that
are integrating ESG parameters across their value chains. Further, Indian MSMEs
must embrace emerging technologies and undergo digital transformation to be able to
compete with their counterparts in other Eastern and South-Eastern economies. The
evolving global trade norms, rising barriers to trade for emerging economies and
changing supplier preferences also demand a relook into the existing policy landscape
for MSMEs.
The MSME sector is considered as a growth engine contributing towards reducing
regional imbalances, poverty alleviation and assuring more equitable distribution of
national income and wealth. MSMEs account for 50 per cent of global GDP
representing 90 per cent businesses and ~70 per cent employment globally.
Nationally, the sector contributes significantly towards overall growth of industrial
economy with a contribution of 30 per cent to India’s GDP, and around 48 per cent of
total exports. Being a source of employment for around 110 million people, MSME
sector ranks second after agriculture sector, which is the largest employer. With
approximately 63.4 million units, MSMEs contribute about 33.4 per cent of India’s
manufacturing output.
Andhra Pradesh is on the path to achieve sustainable, equitable and inclusive growth
through policies across all relevant sectors with a greater focus on manufacturing and
MSME sector that can help improve productivity and wages, employment
opportunities and outcomes. Under the Swarna Andhra Pradesh framework, the state
envisages services and industrial sectors to be the largest drivers of growth. The
industries sector share of State GDP is envisaged to grow from ~USD 80 billion (23-
25% share in GSDP) in 2028-29 to ~ USD 760 billion in 2047 (28-32% share in
GSDP). Similarly, the services sector share of State GDP is envisaged to grow from

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 ~USD 135 billion (39-41% share in GSDP) in 2028-29 to ~ USD 1.3 trillion in 2047
(50-55% share in GSDP). This presents a window of opportunity for scaling the MSME
sector growth in the State.
Against the changing landscape, Andhra Pradesh with its favorable industrial
ecosystem offers an ideal ecosystem for MSMEs across their business lifecycle with a
plethora of emerging business opportunities which can be leveraged to achieve
inclusive growth.
The ‘Future-Ready’ MSME Policy aims at addressing the challenges faced by MSMEs
and shall provide support to enhance productivity, boost innovation, facilitate
diversification leading to augmented global outreach.
1.1. MSME Landscape in Andhra Pradesh
MSMEs are growing exponentially in the State, which is home to ~9.3 lakh registered
MSMEs as of February 2024, as per Udyam Portal of GoI, and contributing to 28.3 per
cent of State’s exports. Of the total number of MSMEs registered on Udyam, 21 per
cent are engaged in manufacturing activities and 79 per cent are engaged in activities
pertaining to services.
The State MSME sector is dominated by micro enterprises with a share of ~97 per
cent in the total number of registered enterprises in line with the national trend and
~92 per cent share in the total employment of the MSME sector. Approximately 70 per
cent of the MSMEs are concentrated in top 12 districts viz. Krishna, Visakhapatnam,
Guntur, Ananthapur, East Godavari, West Godavari, SPSR Nellore, Kurnool, Chitoor,
Prakasam, Y.S.R. Kadapa and N.T.R.
The Government of Andhra Pradesh has been at the forefront of supporting women
led MSME growth. The percentage of women-led enterprises to total MSMEs on
Udyam registration is 49 per cent in Andhra Pradesh as compared to the national
average of 33%.
The Government has taken strides to facilitate credit access for MSMEs and has
exhibited remarkable growth in MSME credit targets. MSME sector is expected
toofftake~16 per cent share (~87,000 crore) in the total credit (~INR 5.4 Lakh crore)
under the Annual Credit Plan for FY 24-25 and ~23 per cent share in total priority
sector credit lending.
Total number of manufacturing enterprises registered on Udyam portal as on
01.08.2024 in Andhra Pradesh are 1,89,724 units. Basis the NIC classification, food
processing (~32%), Textiles (26%), Wooden products (6%), Non-metallic minerals
(5%) have the largest sector share within manufacturing.

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The state boasts of robust industrial infrastructure comprising of 29 operational MSME
Parks across 17 districts with total land extent of 2,329 acres. Under the MSE CDP
programme of Ministry of MSME for cluster development, total 9 projects valued at
more than INR 100 Crores have been sanctioned by GOI in the State.
With a vibrant logistics sector and favorable business environment, Andhra Pradesh is
continuously reaffirming its dedication to fostering an industry-friendly environment.
The state has created a conducive ecosystem for MSMEs as evident from its steady
position in the top 10 Indian states in terms of MSME exports. Further, the state
envisages increasing the exports from USD 19.3 billion in 2024 to ~USD 450 billion by
2047. Further, the state’s progress on Sustainable Development Goals indicates its
preparedness for the integration of its MSMEs with the global value chains.
Recognizing the importance of the MSME sector, the Government of Andhra Pradesh
has established specialized entities (APIDC, APMSMEDC, APTPC, AP MSME
Facilitation Councils) dedicated to the sector's overall development and delivering
associated services. The AP MSME Development Corporation, as the implementation
agency for cluster development, promotes MSE clusters by providing handholding
support to avail benefits under the MSE-CDP scheme of the Government of India.
Additionally, the state encourages the development of cost-effective flatted factory
complexes to provide affordable working spaces especially for micro and small
enterprises.
Significant initiatives like the ‘MSME Formalisation Survey’ and a dedicated and
holistic MSME portal highlight the state’s efforts to formalize and support MSMEs.
Despite the large number of MSMEs in the State, majority remain unregistered. The
AP MSME DC is conducting an on-ground survey to assess this gap and establish the
online portal as a unified interface for streamlined access to MSME-related services
and benefits, promoting comprehensive support and a competitive business
environment.
Under the Raising and Accelerating MSME Program (RAMP), a budget outlay of INR
121 Crores has been earmarked for implementing a set of comprehensive
interventions comprising of MSME Formalization, dedicated MSME Portal, creation of
supporting BDS Ecosystem, Entrepreneur Development Program (ESDP) with special
emphasis on women and BC/SC/ST, Procurement & Marketing Support (PMS), Export
Promotion Program, ZED Certification, training on intellectual property rights (IPR),
Trade Receivables Discounting System (TReDS), thereby targeting critical growth
enablers of the MSME ecosystem in the State.

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1.2. Need for New MSME Policy 2024-29
With an aim to foster a dynamic MSME ecosystem and increase the competitiveness
of the sector, Government of Andhra Pradesh has formulated the MSME and
Entrepreneur Development Policy 2024-29.
The overarching aim of the policy is to position Andhra Pradesh as the ‘Champion
State’ for MSMEs by fostering a conducive climate for entrepreneurship, innovation,
and competitiveness. The robust policy environment would support a comprehensive
package addressing the needs of the MSMEs throughout their business cycle related
to infrastructure, access to finance and markets, capacity building, skilling, addressing
information asymmetry and sustainability.
The policy would focus on capitalizing opportunities under the aegis of ‘Make in India’
and ‘Make in Andhra Pradesh’ and envisages significant growth in state MSME
exports and integrating 500+ MSME Champions into the global value chain by
enhancing export competitiveness.
The policy puts special emphasis on inclusion, equity and diversity by supporting
entrepreneurs from different sections of the society including women and BC/SC/ST
entrepreneurs, start-ups, micro and medium enterprises, sick units, backward regions
etc.
2. Policy Period and Applicability
1. This Policy shall be valid for a period of 5 years from the date of the policy
notification, or till a new Policy is announced.
2. The policy may be amended and modified during implementation; however, all
such amendments and modifications shall be applied prospectively and shall not
curtail any benefit or concession already granted under the policy.
3. The Government of Andhra Pradesh may extend the period of this Policy as and
when required. The Policy shall be applicable to the entire State and shall give
direction to boost economic development in the State.
4. This policy shall be applicable to following categories of enterprise(s) and
investment(s):
a) New and existing enterprises investing and establishing new units.
b) Existing enterprises investing in expansion of units.

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3. Policy Roadmap
3.1. Vision
To spur the growth of MSMEs in the state and transform Andhra Pradesh into a state
with “One Family One Entrepreneur” by 2030.
3.2. Guiding principles of the Policy

1. Strong focus on formalizing MSMEs, especially the existing micro enterprises

and bringing them to the organized sector to achieve scale and increase their
outreach and access.
2. Aligning initiatives with national priorities
3. Special emphasis on product competitiveness leading to integration in Global
Value Chains.
4. Leveraging network of strong business support institutions and strengthening
their capacities to serve MSME sector.
5. Encouraging participation of private sector to ensure sustainability of
interventions.
6. Using technology and ESG for sustainable, circular and environmentally
responsible growth.
7. Facilitating convergence between priorities and resources of different
stakeholders such as GoI, State institutions, private sector and
bilateral/multilateral institutions to achieve maximum potential.
8. Enhancing inclusion and diversity and addressing regional disparities for a
balanced growth across the State.

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 9. Capacity building, information dissemination, enhanced exposure along with a
robust monitoring and review mechanism shall guide the policy implementation.

3.3. Targets of the Policy

The policy intends to achieve the following targets during its operative period:
1. Attract additional investment of INR 50,000 Crores. in manufacturing from
MSMEs.
2. 22 lakh MSMEs(including both manufacturing & services) to be formalized
3. Generate more than 5 Lakh direct and indirect employment
4. Double exports to USD 12 Bn (INR 99,600 Crores) from the MSME sector by
2029
5. Facilitate integration of500+ MSME Champions in Global Value Chains
6. Setting up of 5 sector specific Centres of Excellence/ Technology centres/
extension centres to address the technology, manpower needs of the MSMEs.
7. Set aside corpus of INR 500 Crores during policy period and ensure maximum
utilization of the fund.

'Ratan Tata Innovation Hubs'

The Policy envisages setting up of 'Ratan Tata Innovation Hub' with a Central Unit at
Amaravati, to function as a Central hub and linked to five ‘Ratan Tata Innovation Hubs’
in five zonal locations across the State and these will foster innovation,
entrepreneurship ecosystem and mentor startups. These Hubs will also facilitate

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technology and skill upgradation in the emerging sectors. Each of these Innovation
Hubs will be mentored and fostered by reputed business groups, for promotion of
research and value chain integration across 10 thrust sectors with export potential.

All the support structures, existing and going to be established under this Policy,
including Training and Technology Upgradation initiatives, will be organically linked with
these Innovation Hubs – both at Zonal level and at Central Innovation Hub at Amaravati.

The Innovation Hubs will facilitate top-performing MSMEs in the State, to showcase
‘Export Guides’ for products with high export potential in coordination with Director
General of Foreign Trade (DGFT). The MSMEs shall be encouraged to create digital
profiles.

The Ratan Tata Innovation Hubs will forge ties with national and international trade
bodies, industrial associations, testing & certification laboratories and institutions that
promote marketing opportunities for MSMEs, which will eventually result in product
perfection. It will also support the participation of exceptional and high growth MSME
entrepreneurs in international trade fairs, Haats and exhibitions.

The Innovation Hubs will also provide regular analysis of major export markets with
robust demand of products produced in the state and other potential export specific
products in alignment with the District Export Action Plans for diversification of exports
across multiple destinations. This information shall be made readily available to the
MSMEs. These Hubs will also host a repository of Business Development Service

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 (BDS) providers for to assist MSMEs with product-specific and country-specific
compliances, regulations, and certifications.
4. The Policy Pillars
Government of AP aims to augment the growth of the MSMEs in the State by
structuring policy support across the following eight pillars.

4.1. Pillar 1: MSME Facilitation

The policy shall foster a favorable business environment by providing handholding and
facilitation support to MSMEs throughout their business cycle, from pre-investment
stage to implementation and post implementation stage handholding the MSMEs across
approvals, incentives, capacity building etc. Access to information, business
development support and other facilitatory measures shall be undertaken to enhance
speed of doing business and bring down the cost of doing business.

4.1.1. Dedicated Chief Minister (CM) Udyami helpline

An exclusive CM Udyami helpline shall be launched for the MSMEs to facilitate easy
access to information and immediate guidance. The helpline will also guide the
entrepreneurs on the service portals pertaining to the sector and link them to the
institutional support network of the state.

4.1.2. Setting up of Entrepreneur Capability Centres (ECCs)

The District Industries Centres (DICs) play an integral role in strengthening the MSME
ecosystem in the State, being the first port of call for all the MSME related queries. For
strengthening of DICs, Entrepreneur Capability Centres (ECCs) will be set up in hub
and spoke model with one District Entrepreneur Capability Centre (DCC) in each of the
25 districts and a State Entrepreneur Capability Centre (SCC) located at Amaravati, to
strengthen institutional delivery of services for MSME competitiveness. The

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Entrepreneur Capability Centres will be integrated with all the line departments which
work with MSME units in the State.
These centres will be pivotal in transforming business ideas into successful enterprises,
ensuring sustained progress and competitiveness in the market. These centres will also
provide a digital experience equipped with ICT, AV equipment, digital content,
interactive applications and AI facilities. The services provided by these centres will
include entrepreneur guidance and skilling; market research; marketing connect; export
promotion; credit support; technology guidance; scheme support; incentive facilitation;
IPR; quality certification and mentoring &handholding.

4.1.3. Industry 4.0 Technology Centre

The new paradigm of Industry 4.0 technologies encompasses frontier technologies (3D
printing, artificial intelligence, machine learning, Internet of Things (IoT), big data
analytics and blockchain) that is transforming the industrial systems of production,
management, and governance, thereby resulting in enhanced efficiency and increase in
industrial productivity.
The State recognizes increasing importance of Industry 4.0 technologies and will work
towards enhancing the adoption of Industry 4.0. technologies amongst MSMEs.,
Government will establish a dynamic state of the art Industry 4.0 technology cum
experience centre at Amravati in PPP mode, partnering with technical and academic
institutions.

4.1.4. Development of Sector Specific Extension Centres

Government will establish 5 extension centres, linked to the industry 4.0 technology
centre, that will focus on selected sectors. These extension centres will assist MSMEs
in providing access to advanced manufacturing technologies; skilling of manpower,
design development, and providing technical and business advisory support thereby
enabling increased competitiveness of the MSMEs.

4.1.5. Strengthening the MSEFCs

Government has added 4 new facilitation councils for the speedy redressal for MSME
disputes. An Online Dispute Redressal (ODR) mechanism is being designed by
MoMSME which shall be implemented in the State. To enhance the capacities of the
MSEFCs to reduce the time taken for redressal and efficient clearing of pending cases,
the Department would empanel full time qualified and experienced lawyers, arbitrators,
and mediators who are well versed in the MSME laws and regulations and online/
offline redressal processes.

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The infrastructure at the facilitation centres shall be strengthened further to facilitate
regular meetings. The Department shall closely monitor the rate of disposal and
settlement of cases vis a vis applications.

4.1.6. Ease of regulatory compliances

New Micro Enterprises including start-ups to take approvals for establishment and
operation of a unit based on self-certification in all the notified industrial areas and
parks.

4.1.7. Capacity building through RAMP

Under the RAMP program, Government would be implementing a capacity building
program encompassing a series of awareness workshops and programmes at district
level for the stakeholders of MSME sector. A total of more than 7,000 workshops would
be implemented over a period of four years covering ~ 3 lakh MSMEs. These
workshops would be conducted across key areas including access to market, access to
finance, technology upgradation, quality upgradation, skilling, innovation and greening.
Further, Government would be empanelling business development service providers in
the State to provide MSMEs with access to resources and expertise that will help in
improving business performance and competitiveness.

4.2. Pillar 2: Creation of Incubation and Acceleration Infrastructure

and Supporting Mentorship

Start-ups are one of the most important segments in the industrial ecosystem owing to
their capacity to innovate, nurture new ideas, flexibility to pivot and willingness to take
risks. GoAP recognizes the importance of a vibrant start up ecosystem and is
committed to support the budding enterprises through their establishment journey.

4.2.1. Virtual Incubation Platform

1. To provide incubation support to the early stage start ups/MSMEs and promote
innovation and R&D in the MSME sector, a virtual platform integrating all the
MSME incubators in the state will be created.
2. The platform will be operated in a hub and spoke model with State Entrepreneur
Knowledge Center being the nodal point for its operation. The MSMEs across all
the districts will be incentivized to get onboarded on the platform. Other financial/
legal/ operational service providers supporting early stage MSMEs will also be
onboarded on the platform to create a single repository of all the MSME services.
3. The platform will also host a library for sharing of best practices and relevant
documents such as agreement templates, market reports etc. Investors/ financial

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 institutions/ funds will be onboarded on the platform to address the funding needs
of early stage MSMEs.

4.2.2. Mentorship Connect

1. The virtual incubation platform shall undertake a special drive to onboard
mentors for providing handholding support to the start-ups. Mentors to support
start-ups and MSMEs with respect to technology, market access, funding
sources, business planning, acceleration etc shall be onboarded and made
accessible to start ups.
2. The industry associations across the state will be strengthened to make them
more responsive to the needs of MSMEs through focused mentorship programs.
Through these programs, mentors from national level associations will be
onboarded to handhold industry associations with respect to services portfolio,
professional management, sustainability, information dissemination etc.
3. The professional leadership of the incubators shall be capacitated for
professional incubator management. Curated programs to address this need
shall be launched in partnership with institutions such as Indian School of
Business, TiE etc

4.2.3. Incubation & Acceleration Programs

1. Government recognizes the pressing need for an incubation program specifically
designed for the start ups in the state, especially those in the Tier II and Tier III
cities. Incubation programs will be initiated at all major business incubators in the
state to promote entrepreneurship.
2. Thematic acceleration programs (with 3 months of duration)exploring Industry-
Academia-Government convergence will be initiated at the existing incubation
centers of IIT Tirupathi and IIM Visakhapatnam for medium and small enterprises
in the state. The enterprises graduating from the incubation programs will be
provided a direct opportunity to participate in the acceleration programs.
3. MSMEs led by women and entrepreneurs from disadvantaged sections will be
provided a preferential access to about 30% of the seats across all these
cohorts.
4. The resources available with the corporates including the techno managerial
expertise, technical prowess and their CSR outlays will be channelized towards
the incubators to give their start ups an edge.

4.2.4. Development of Rural Business Incubators

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 The innovation and entrepreneurial landscape in the rural parts of the state is rapidly
evolving. The state envisages the development of business incubators to identify
potentially groundbreaking ideas from the rural areas, transform these into viable
ventures and ensure their integration in the economic value chain.
1. A Rural-Technology Business Incubator (R-TBI) will be developed in each district
of the state to nurture fresh ideas from the rural areas of the state and groom
them to transform their ideas into sustainable businesses.
2. The R-TBIs will be set up as a collaborative platform to provide continuous
handholding from assessment to mentoring, coaching, business plan
development and marketing to the rural entrepreneurs of the state prioritizing
socially disadvantaged groups.
3. State-wide challenges/ hackathons attempting to solve challenges pertaining to
rural areas will be launched. The ventures established by the incubates of R-TBIs
will be integrated with all the selected solutions to provide expansion
opportunities to the former.

4.3. Pillar 3: Enhance unit level competitiveness.

State shall offer a comprehensive package for new/ existing MSMEs to enhance their
competitiveness. To encourage setting up/ expansion and diversification of enterprises,
a bouquet of incentives is being offered which has been detailed in the financial
incentives section of this document. For the established units who have been in
operation, the support measures aim at enhancing productivity, quality, sustainability
and global outreach.

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4.3.1. Innovation Networks

Innovation is the key to augment improved products, processes, services leading to

value addition, increased efficiencies and revenue enhancement. Joint projects
initiated by an industry association/ individual unit in collaboration with reputed
technical/ R&D and academic institutions shall be supported. Eligible project proposals
submitted jointly and evaluated by an expert committee set up at the State level shall
be provided an assistance of 75% to the extent of INR 5 Lakhs per project.

4.3.2. AP Future Skills Connect Platform

1. With an aim to develop a skilled workforce and bridge the skill demand and
supply gap and provide industry with a pool of skilled professionals, Government
will launch the AP Future Skills Connect Platform in collaboration with industry
associations and academic institutions.
2. The Platform will contribute to the overall growth of the MSME sector by nurturing
aspiring youth (students and graduates) by building their skills, providing them
with hands-on experience and practical skills relevant to industries and providing
them with employment opportunities and career guidance/mentorship support.
The Portal will also serve as a matchmaking platform for industries/ MSMEs to
source apprentices/ candidates with the required technical skills,
entrepreneurship skills, vocational training, and soft skills.
3. The state shall facilitate implementation of GoI’s schemes for Employment and
Skilling, announced in the Union Budget 2024. Under the package, GoI has
offered salary support for first-time employees as registered in the EPFO,
support to boost job Creation in manufacturing through incentive with respect to
their EPFO contribution, skilling programs, upgradation of it is in hub and spoke
arrangements and internship opportunities in 500 Top Companies.
4. In addition, GoAP shall provide 100% assistance with respect to Employer
contribution to EPF to medium units for their employees with an upper ceiling of
INR 1 Lakh per annum. The medium enterprises availing assistance from GoI
under the EPFO scheme shall not be eligible for this incentive.
5. GoAP shall provide support for skill upgradation incentives to the MSMEs to
upgrade the skills of their employees to be at par with technology advancements
and changing market needs. Government shall provide assistance upto INR
5,000 per person for max. of 10 persons for micro units, 10,000 per person for
max. of 20 persons for small units.

4.3.3. Handholding support for E-commerce

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 The rise of e-commerce has been unprecedented due to the growing internet access,
mobile penetration and it is impacting the way business is being done for MSMEs,
representing an underutilized opportunity.
1. GoAP shall leverage its MoU with ONDC and facilitate the onboarding of MSMEs
on the platform. Government shall carry out sensitization drives on the potential
of e-commerce and provide handholding support for listing of products, imaging
&cataloguing, packaging, logistics, inventory, and account management, returns
management and customer servicing.
2. The drives shall be carried out by the District Entrepreneur Knowledge Center in
partnership with cluster associations to enhance coverage.

4.4. Pillar 4: Access to Finance

Access to finance is the most critical challenge which MSMEs face during their entire
business cycle form setting up to growth and transitioning to next level. GoAP shall put
in place measures to ensure adequacy and availability of finance to the MSMEs.

4.4.1. Strengthening receivable financing market for MSME

1. Government shall direct all the SPSUs and companies with a turnover of INR
250Crores. and above to get on-boarded onto the TReDS platform. The
Government would also issue the operational guidelines for onboarding the
procuring entities in the TReDS platform. A Government Order to this effect shall
be released. In addition, NBFCs and medium enterprises shall be encouraged to
get onboarded and start using the platform more effectively.
2. The State Government would be developing a framework in collaboration with
the TReDS platform providers viz. Invoicemart, RXIL and M1xchange for
increasing the onboarding of MSMEs onto TReDS platform and to facilitate
smooth payments process. A series of awareness programs have been planned
under RAMP to sensitise the MSMEs about the benefits of TReDS.

4.4.2. Andhra Pradesh Credit Guarantee Scheme

CGTMSE has been a well-established institution supporting micro & small

entrepreneurs by offering collateral free loans and a guarantee coverage of
approximately 75 per cent to 85 per cent. To enhance outreach and coverage of
CGTMSE, Government of Andhra Pradesh would partner with CGTMSE by extending
additional guarantee cover to the beneficiaries under CGTMSE. For this purpose,
Government of Andhra Pradesh would set-aside a corpus of INR 100 crore with
CGTMSE which would be used for the additional guarantee issued on behalf of the
State Government. Through this collaboration it is estimated that more than 70,000

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 MSME borrowers and 2 lakh employment opportunities would be supported. The
corpus shall cover more than 35,000 green fields projects.

4.4.3. Facilitating support package for distressed MSMEs

GoAP shall take focused measures to prevent incipient sickness in MSMEs and for
the revival of the distressed/ sick MSMEs.
1. The Distressed Asset Fund of GoI as announced in the Union Budget 2024 shall
be leveraged to provide handholding support for revival of sick/ distressed
MSMEs.
2. Regular Review meetings: General Manager of DICs will hold regular facilitation
meetings in association with all the concerned departments every month in each
Industrial estate/Cluster/IDA, to understand the issues faced by MSMEs in
running their industry. Such issues will be brought to the notice of District
Industrial and Export Promotion Committee (DIEPC) headed by the District
Collector for resolution. The issues which require Government intervention shall
be forwarded to the Director of Industries by DIEPC.
3. In addition to regular SLBC meetings to discuss measures for revival of sick
industries, GoAP is working closely with banks to undertake measures to
increase the credit flow to MSME sector including opening branches closer to
industrial clusters/ parks. Units that are SMA marked shall be referred to District
Entrepreneur Knowledge Center to be supported by specialized BDS in terms of
diagnosing the reasons for sickness and planning subsequent support measures.
4. State Level Inter Institutional Committee (SLIIC) Sub-Committee: As per RBI
instructions, an SLIIC sub-Committee has been constituted under the
Chairmanship of the Director of Industries for revival and rehabilitation of Sick
Industries with the cooperation of bankers. The SLIIC Committee will identify the
sick units for revival and rehabilitation while the sub-committee will look into the
problems of individual sick MSE units and submit its recommendations to SLIIC
for consideration.
5. Interest rebate to Banks/Financial Institutions: 6% interest subsidy will be
provided to all identified/eligible sick units, subject to maximum of 2 lakh per year
for a maximum period of three years.
6. Deferment of CT arrears: Arrears of payment of purchase tax, sales tax and
interest towards non-payment of sales tax shall be deferred for 3 years from the
date of grant of revival package.
7. Relief in Energy Charges: If the sick industrial unit under consideration has to
pay arrears of CC (Capital Cost)charges, it may be given choice to pay the entire

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 arrears of CC charges up to the date of disconnection with interest and 4 months
minimum charges during closure period without interest +CMD (Contracted
Maximum Demand)charges for new connection, either in one lump sum or in3
annual installments. The percentage of interest charged by APTRANSCO/
DISCOM (Distribution Company) on the arrears of CC charges will be subsidized
to the extent of15% of interest charged from out of the percentage of the total
interest charged, subject to a maximum of 5 lakh for the former option and
maximum of 3 lakh per year for3 years for the latter option.

4.4.4. Facilitate Digital Lending

Government will promote digital lending platforms for enhanced financial coverage to
MSMEs. Platforms which use digital footprints and other non traditional parameters for
assessing credit worthiness of the MSMEs shall be promoted through AP MSME One,
awareness shall be created through RAMP and MSME facilitation centres.

4.5. Pillar 5: Sustainability & Circularity

Government has already embarked on ambitious policy and regulatory landscape which
guides the industries towards a path of sustainable development. India has a global
commitment of reducing emissions intensity of GDP by 45% by 2030 (2005 levels) &
achieving net zero by 2070. GoAP is equally committed to contribute towards a more
sustainable and responsible industrial growth. Government intends to encourage
MSMEs to create business models with backward and forward linkages to the circular
economy.

4.5.1. Mapping of energy intensity by cluster

The Government will initiate an extensive energy mapping exercise to identify clusters/
parks or pockets of MSME industries with above-average energy consumption
indicating areas of higher energy intensity. The energy intensity maps such created
shall help the Government in devising sector specific greening/ conservation targets.

The study across these clusters will involve a comprehensive examination of energy
usage and practices within each cluster, identifying key areas where potential energy
efficiency improvements can be made. This shall be followed by identification and
planning of suitable common infrastructure facilities which could be set up to reduce
the carbon footprints. MSMEs in these clusters will be encouraged to undertake
resource efficiency and decarbonizing measures.

4.5.2. Support for energy/water audits, waste management, green tech

adoption

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 1. To encourage water conservation a one-time reimbursement of 75% of water
audit cost conducted by approved agencies/ consultants limiting to INR 1 lakhs
shall be provided to MSMEs.
2. To encourage energy conservation a one-time reimbursement of 75 % of energy
audit cost conducted by approved agencies/ consultants limiting to INR 2 lakhs
shall be provided to MSMEs.
3. 25 % of the cost incurred on approved equipment procured for implementing the
recommendation of the energy/ water audits will be reimbursed to the MSMEs
subject to a maximum of INR20 Lakhs for micro, INR 40L for small and INR 50L
for medium enterprises. The assistance is subject to the condition that the
intervention results in a minimum 10% saving in energy/ water compared to the
average monthly consumption of previous 2 years before the audit.
4. Solutions provided by Start-ups to the MSMEs with respect to waste
management, conservations, resource efficiency, climate change etc shall be
preferred while rolling out the above interventions.

4.5.3. Assistance for solar roof top solutions

A cluster-based MSME rooftop solar program will be initiated to assist MSMEs in

selecting appropriate technologies, understanding financial implications, aggregating
demand, and exploring financial guarantees to encourage OPEX-based models or
Green Open Access.

The Government will encourage programs to spread awareness about the benefits of
rooftop solar energy for MSMEs. Further, for MSMEs willing to adopt solar rooftop
solutions, specialized training sessions on themes such as standardized quality
control measures, regulatory frameworks & requirements etc. will be organized in
association with DISCOMs

4.5.4. Circular economy measures to be supported in MSME parks

The government will prioritize regenerative resources and renewables for common
infrastructure investments in the MSME parks.

The government will create mechanisms for leveraging technologies enabling material
& energy recovery, optimization of consumption, waste minimization and re-use of
waste as a resource in APIIC promoted and supported parks.

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 4.6. Pillar 6: Import Substitution / Export Promotion
Integrating MSME’s into the global value chain by enhancing export competitiveness
and adopting a targeted import substitution strategy for expanding MSME
manufacturing base in the State are key areas of consideration under the policy. With a
potential to achieve an exports target of US$ 60 billion by 2027-28 (Exim Bank,
Occasional Research Paper No. 214; 2023), the vibrant export landscape in Andhra
Pradesh will be coupled with favorable initiatives. The state recognizes the centrality of
MSMEs in achieving this potential and will initiate the following measures to enhance
the export potential of its MSMEs.

4.6.1. Promoting E-Commerce Exports

1. As per GoI estimates, Global Cross-border E-Commerce is estimated to grow to
USD 800 Billion by 2025 and up to USD 2 Trillion by 2030. Government of AP
will encourage MSMEs to leverage e-commerce exports opportunity to diversify
their markets, earn better margins and get better visibility.
2. The presence of MSMEs across all the major B2B and B2C export promotion
platforms will be enhanced through appropriate trainings for digital marketing,
catalogue management etc.
3. Export specific collaborations will be initiated with all the major export
marketplaces and quarterly training programs will be instituted exclusively to
promote MSME exports through digital means. Awareness with respect to e-
commerce export opportunities, regulations/ compliances, international trends etc
shall be facilitated.
4. Linkages with ODOP scheme will be promoted and cross-border B2C e-
commerce sales, for Andhra Pradesh-centered products like handicrafts &
apparels, wooden toys, religious/festive items, or other items with a strong
Andhra Pradesh specific theme will be promoted.

4.6.2. Identification of imported products to be manufactured in Andhra

Pradesh.
1. GoAP shall undertake a comprehensive assessment to identify products across
thrust sectors which having potential for manufacturing in AP by analysing
production data, and imports at the product level. A roadmap for import
substitution aimed at fulfilling domestic demand being met by imports shall be
created.
2. The information on all the products imported by the state will be made available
for dissemination through GTIH. The potential MSMEs shall be handheld by the
Technology centres and extension centres to initiate production of such products.

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 Channels for internal trade of these products to other states of India will also be
created.

4.6.3. MSME Champions for GVC integration

1. Government will identify 500 MSME units from the thrust sectors and develop
them as ‘Export Champions’ for integration with global brands.
2. Government will organize global conferences with leading brands, suppliers,
distributors, and complementary businesses to provide networking and business
opportunities for these MSMEs. Targeted discussions with leading global buyers
shall be facilitated by the Government to understand their requirements and
create opportunities for the MSMEs
3. Global conferences on standards/ compliances with respect to target countries
shall be orgnanised to create awareness amongst the MSMEs
4. Government will launch training programs and courses in association with
APTPC to equip MSMEs with relevant skills on contemporary design, sustainable
packaging, global branding and other similar areas.
5. Government will incentivize MSMEs for upgrading their production processes
with a focus on resource efficiency (ISO9000/9001/ ISO 14001/ Hazard Analysis
and Critical Control Point (HACCP), ISO 22000 Good Hygienic Practices (GHP) /
Good Manufacturing Practices (GMP)), environmental sustainability (Bureau of
Indian Standards (BIS) certification, Zero Defect Zero Effect (ZED) certification),
and adoption of international product/process quality standards (any other
international quality certification recognized in India by a competent authority).
6. Government will support 100% reimbursement of the charges incurred by the
MSMEs for acquiring these certifications and the consultancy for the same.
Balance of the cost for acquiring such certifications (over and above any support
provided by GoI) shall be reimbursed by GoAP to the MSMEs.

4.6.4. Reverse buyer seller meets

The state will organize reverse buyer seller meets (RBSMs) to provide the MSMEs a
platform for targeting international buyers under the aegis of APTPC.

An automated tool will be created for matchmaking of MSMEs with their prospective
buyers. The B2B/ B2C meetings organized during the RBSMs will be carefully aligned
and matched with specific product HS codes, ensuring meaningful and targeted
interactions between MSME exhibitors and international buyers.

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 4.7. Pillar 7: Adopting cluster-based approach for infrastructure
development
Government recognizes the economic potential of industrial clusters and aims to
propel and support infrastructure development through adoption of a cluster-based
approach in a PPP mode. APIIC shall remain to be the nodal agency for infrastructure
development for MSMEs and shall work closely with the industry association to gauge
evolving demand for industrial space.

4.7.1. MSME parks with plug & play facilities for micro and small units
To provide conducive infrastructure for micro and small units in the State, Government
will establish nano parks and MSME parks in PPP mode with plug and play
infrastructure and shared facilities. Each park could be multisectoral or catering to a
specific sector, located in the vicinity of an existing cluster. Each of these parks will be
set up in minimum 20 acres of land, which could be APIIC or private land. These Nano
and MSME Parks shall be established across 175constituencies in a phased manner.
Support available under MSECDP for infrastructure development shall be leveraged for
this initiative. These parks will be developed on Public- Private- People partnership
model. The parks will be provided with backward and forward linkages and aggregator
models will be facilitated wherever possible.

Towards the park development and infrastructure creation in parks, a separate Private
parks Policy 4.0 (2024-29) has been brought forth.

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4.7.2. Sector specific common facility centres and testing infrastructure
Government shall support establishment of sector specific Common Facility Centers
(CFCs) brownfield and greenfield clusters/ industrial areas/ parks in the State. Further,
to encourage MSMEs to undertake quality improvements including standardization,
accreditation, quality certification and testing services, Government will establish
testing and certification labs in PPP mode to help MSMEs improve the efficiency and
productivity of their business in order to become globally competitive. A top up grant of
20%, over and above the grant given by MoMSME under MSECDP for a project cost
between INR 5Crores - INR 20Crores shall be provided by GoAP. These CFCs could
be co-located in the MSME parks.

4.7.3. Promotion of anchor buyer led ancillary parks

Government will establish 2 dedicated anchor buyer led ancillary parks with common
physical infrastructure like roads, industrial water supply, power, effluent treatment
plant etc to boost large scale employment generation in the MSME sector. The anchor
led ancillary parks will promote natural linkages between cluster linked and ancillary
MSMEs with Original Equipment Manufacturers (OEMs) through co-location and co-
development. These parks will give a huge fillip to the MSMEs with respect to access
to technology, skill development, market expansion, improved access to state of the
art facilities and testing infrastructure.

4.7.4. MSME cluster mapping on Gati Shakti Portal

The State MSME clusters would be mapped on the PM Gati Shakti Portal for effective
infrastructure planning and to increase the competitiveness of the MSMEs basis
locational advantage, connectivity, and the interconnectedness. A geo-tagged State
MSME cluster map would be created and aligned with the PM Gati Shakti
infrastructure plan to improve and enhance infrastructure connectivity.
Further, Government would develop a data-driven cluster competitiveness index to
assess key performance indicators viz. proximity to raw material sources, access to
markets, treatment of waste and effluents, connectivity/ access infrastructure etc. to
identify high performing and struggling clusters and the information would be available
on the MSME clusters visual dashboard.

4.8. Pillar 8: Building Inclusive and Equitable MSME Ecosystem

The Government recognizes the need for an inclusive and equitable MSME ecosystem
in the State to promote balanced industrial growth and development. The following
measures are proposed to be undertaken:

4.8.1. AP MSME procurement policy

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 • The GoAP has stipulated MSME Public Procurement policy in line with GoI policy,
mandating 25% in public procurement from micro and small enterprises (MSEs)
registered within the State. The order covers all Government Departments,
Statutory bodies, local bodies, development authorities, companies, corporations,
Special purpose vehicles, bodies created through executive orders, trusts and any
other PSUs.
• The Government shall issue orders allowing state entities to float separate tenders
for exclusive procurement from MSMEs. A list of 358 items for exclusive purchase
from MSMEs has been notified by GoI and the same has been made available to
AP PSUs.
• In line with the GoI mandate, the GoAP shall encourage the acceptance of
insurance surety bonds in lieu of bank guarantees for Earnest Money Deposit and
Performance Guarantee in public procurement to ease blocking of funds for the
MSMEs.
• The state entities will submit monthly reports to AP MSME Development
Corporation confirming the mandated procurement from MSMEs.

4.8.2. Special dispensation for women/BC/SC/ST

• The government shall mandate a minimum of 4% procurement from MSEs owned
by disadvantaged groups (BC/SC/ST) and 3% from women owned MSEs within
the total mandate of public procurement from MSMEs.
• The government shall establish a framework for state-led vendor development
program with all SPSEs & CPSEs in state for women & disadvantaged
entrepreneurs in the state.
• 10% additional capital subsidy for women/BC/SC/ST/specially-abled/MSMEs
having domicile in the state, who are undergoing expansion/ diversification/ new
investment shall be offered, to have more inclusive growth.
• 20% of the land/ factories shall be reserved for women/BC/SC-ST/specially-abled/
MSEs in the MSME Industrial parks/ flatted factory complexes. Working women
hostels and crèches shall be established in collaboration with project promoters.

4.8.3. Focus on medium enterprises to enable them to transition to large

• All Medium enterprises will be offered a Business Development Credits (BDCs) to
the extent of 2% of their growth in turnover for a 5yr period. The turnover will be as
shown in tax records. These BDCs can be availed through a matching contribution
of 50% of project cost by the enterprise.
• BDCs can be used for prescribed business development activities like hiring
consultants, marketing, quality, export promotion, technology acquisition, inventory

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 control, product development, productivity enhancement, patents, ancillary
capabilities development, credit rating, Business plan preparation etc., from
empanelled service providers.
• 25% assistance for listing & raising money in SME Stock exchange with a cap of
INR 5L shall be provided to the medium enterprises.
• Medium enterprises with a track record of high performance shall be given
preference while identification of 500 Champion units.

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5. Financial Incentives

5.1. Eligibility Criteria to avail Incentives and Offerings

To avail the policy incentives and concessions, the entity should meet the definition of
Micro Small and Medium Enterprises Development Act, 2006 (vide notification [F. No.
2/1(5)/2019-P&G/Policy (Pt.-IV)], dated 2020), and its amendments from time to time,
if any, carried out therein by the Government of India)and must be registered with
Udyam portal, GoI. In terms of Gazette Notification S.O. 2119 (E) dated June 26,
2020, an enterprise shall be classified as a micro, small or medium enterprise on the
basis of the following criteria as defined in MSMED Act, 2006 and as amended by GoI
from time to time:

• Micro Enterprises:Investment in Plant and Machinery or Equipment does not

exceed INR 1 crore and turnover does not exceed INR 5 crore.

• Small Enterprises:Investment in Plant and Machinery or Equipment does not

exceed INR 10 crore and turnover does not exceed INR 50 crore.

• Medium Enterprises: Investment in Plant and Machinery or Equipment does not

exceed INR 50 crore and turnover does not exceed INR 250 crore.

An entity will be considered as a Startup on fulfilling the below conditions defined by

Government of India (G.S.R. notification 127 (E) dated 19.02.2019). However, the
Policy will adopt the amendments and changes made to the definition by Government
of India from time to time.

An entity shall be considered as a Startup:

• Upto a period of ten years from the date of incorporation/ registration, if it is

incorporated as a private limited company (as defined in the Companies Act, 2013)
or registered as a partnership firm (registered under section 59 of the Partnership
Act, 1932) or a limited liability partnership (under the Limited Liability Partnership
Act, 2008) in India.
• Turnover of the entity for any of the financial years since incorporation/ registration
has not exceeded one hundred crore rupees.
• Entity is working towards innovation, development or improvement of products or
processes or services, or if it is a scalable business model with a high potential of
employment generation or wealth creation.

Provided that an entity formed by splitting up or reconstruction of an existing business

shall not be considered a 'Startup

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To keep the momentum of growth and to encourage holistic development of MSMEs,
the State Government will provide the following incentives and concessions. The
incentives would be applicable only for enterprises involved in Manufacturing activity
during the policy period.

The overall incentive MSME can claim, through combination of incentive packages
offered through this policy, shall not exceed 75% of FCI.

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6. Incentives and Concessions for MSMEs

Following financial incentives are extended to Micro, Small and Medium Enterprises
unless specifically differentiated in the respective incentive category -

6.1. Stamp Duty reimbursement

1. 100% stamp duty and transfer duty paid by the industry on purchase of land
meant for industrial use will be reimbursed.
2. 100% stamp duty for lease of land/shed/buildings, mortgages and
hypothecations will be reimbursed.
3. Stamp duty will be reimbursed only one time on the land. Stamp duty will not be
reimbursed on subsequent transactions on the same land.

6.2. Land conversion charges

4. 100% fee charged for land conversion will be reimbursed.

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6.3. Capital Subsidy

Type of Micro Enterprises Small Enterprises Medium

Support Enterprises

Capital 25% of FCI (Cap- INR 25% of FCI (Cap – 25% of FCI (Cap –
Subsidy st
25 Lakh) on CoD/1 INR 1.5 Crores) on INR 7Crores) on
st st
invoice in 2 equal CoD/1 invoice in 3 CoD/1 invoice in
annual installments equal annual 4equal annual
installments
installments

10% additional capital subsidy, with maximum cap of INR 7 Crore, for
women/BC/SC/ST/specially-abled entrepreneurs having domicile in the
state.
The subsidy is applicable to only new enterprises.

6.4. Technology upgradation cost

Type of Micro Enterprises Small Enterprises Medium

Support Enterprises

Technology 20% of FCI, Capped 20% of FCI, 20% of FCI,

Upgradation at INR 20 Lakhs, in 2 Capped at INR 1 capped at INR 5
Cost equal annual Crores, in 3 equal Crore, in 5 equal
installments. annual annual
installments. installments.

10% additional capital subsidy, with maximum cap of INR 7 Crore, for
women/BC/SC/ST/specially-abled entrepreneurs having domicile in
the state.
The subsidy is applicable to only expansion units

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6.5. Power cost reimbursement

Type of Micro Enterprises Small Medium

Support Enterprises Enterprises
INR 1 per unit for 6 INR 1 per unit for 6 INR 1 per unit for 6
Power Cost years from DCP, years from DCP, years from DCP,
Reimbursement capped at INR 1 Lakh capped at INR 5 capped at INR 15
per annum Lakh per annum Lakh per annum

6.6. Net SGST reimbursement

Type of Small Medium

Micro Enterprises
Support Enterprises Enterprises

100% for 6 years, 100% for 6 years, 100% for 6 years,

Net SGST with annual cap of with annual cap of with annual cap of
Reimbursement 5% of annual 5% of annual 5% of annual
turnover turnover
turnover

6.7. Skill upgradation cost

Type of Micro Enterprises Small Enterprises Medium

Support Enterprises
100% of Employer
Skill INR 5,000 per INR 10,000 per
contribution to EPF,
person for a person for a
Upgradation capped at INR 1
maximum of 10 maximum of 20
Cost Lakh per annum, for
persons persons
3 years

6.8. Energy &water audit cost

Type of Micro Enterprises Small Enterprises Medium

Support Enterprises
1. 75% of cost of Water 1. 75% of cost of 1. 75% of cost of
Energy & audit, capped at INR Water audit, Water audit,
Water 1 Lakh capped at INR 1 capped at INR 1
2. 75% of cost of energy Lakh Lakh
Audit
audit, called at INR 2 2. 75% of cost of 2. 75% of cost of

Page 35 of 38
 Type of Micro Enterprises Small Enterprises Medium
Support Enterprises
Cost Lakhs, during policy energy audit, energy audit,
period. called at INR 2 called at INR 2
3. 25% of cost of Lakhs, during Lakhs, during
equipment as per policy period. policy period.
auditing, Capped at 3. 25% of cost of 3. 25% of cost of
INR 20 Lakhs equipment as per equipment as per
auditing, Capped auditing, Capped
at INR 40 Lakhs at INR 50 Lakhs

6.9. Local procurement subsidy

For exporting units in select sectors registered in the state, the state is extending Local
procurement subsidy, to encourage domestic sourcing of raw material.

Type of Medium
Micro Enterprises Small Enterprises
Support Enterprises

Local 1% of annual export 1% of annual export 1% of annual export

turnover for 3 years, turnover for 3 years, turnover for 3 years,
Procurement with overall cap of with overall cap of with annual cap of
Subsidy INR 15 Lakhs. INR 1.5 Crore. INR 7 Crore.

6.10. Quality certification cost top up

Type of Micro Enterprises Small Enterprises Medium

Support Enterprises

Quality Balance of GoI Balance of GoI Balance of GoI

Certification subsidy to cover subsidy to cover subsidy to cover
Cost Top Up 100% cost 100% cost 100% cost

7. Administration of the Policy

7.1. Commissionerate of Industries

The Commissioner of Industries serves as the overarching agency for implementing
and monitoring this policy, coordinating with departments like Textiles & Handlooms,
Handicrafts, Food Processing, Agriculture, Horticulture, SERP, MEPMA, Social and

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Tribal Welfare, KVIC and other agencies/departments working toward MSME
development. It shall also coordinate implementing GOI schemes such as PM
Vishwakarma and RAMP program. It also oversees the regulatory approvals and
manage financial incentives under the policy through the Andhra Pradesh Single
Desk and Industries incentive Portals, ensuring transparency, accountability, and
effective monitoring. At the district level, District Industrial Officers (DIOs) shall
facilitate and monitor policy implementation.

7.2. AP MSME Development Corporation

AP MSME Development Corporation (APMSMEDC) would be the agency in charge
of implementing the schemes under the policy, Cluster Development Programme
(Common Facilitation Centers) and RAMP program and infrastructure development
with the support of AP Industrial Infrastructure Corporation (APIIC), and other
corporations like AP Trade Promotion Corporation (APTPC), etc.

7.3. State Level Empowered Committee

A State Level Empowered Committee under the Chairmanship of Secretary to
Government, Industries and Commerce, GoAPwith ACS/Principal
Secretaries/Secretaries of line departments will be constituted to monitor the
progress of implementation of all the provisions of the policy regularly. The
Committee will put in place a suitable mechanism that ensures speed and
transparency for disbursal of incentives. The Committee will recommend mid-course
corrections, if any, for smooth implementation of the Policy.
This Committee will be assisted by a Policy Implementation Cell headed by
Commissioner / Director of Industries, Commerce and Export Promotion and
members such as Additional Director (Member Convener), two representatives from
State Level Industrial Associations (President) and one representative from National
Level Industrial Association (President). This cell will have requisite staff and
resources to conduct research, undertake studies, surveys, etc. & to assess the
impact of policy initiatives and provide relevant feedback regarding the policy and its
implementation.

7.4. State Level Review and Monitoring Committee

A State Level Review and Monitoring Committee would be set up under the
Chairmanship of Secretary to Government, Industries and Commerce, GoAP and
line department officers as members to address any ambiguity that arises in the
Policy and to strengthen inter-departmental co-ordination mechanism in
strengthening the State’s MSME ecosystem through a collaborative and an inclusive
approach. It shall be the authority to interpret the policy measures, incentives &
concessions detailed in this policy (including those in previous policies wherever
applicable) and its decision shall be final.

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7.5. Operating Guidelines
The operating guidelines for this policy will be issued separately detailing the
procedures for availing incentives under this policy.

N. YUVARAJ
SECRETARY TO GOVERNMENT & CIP

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