The Orissa government on Sunday announced its first ever Micro, Small & Medium Enterprise (MSME) Policy 2009 doling out fiscal incentives and infrastructural supports to the industries coming up in the ancillary and downstream sectors.

The policy, which got the state Cabinet?s approval on Sunday, provides 10% subsidy on capital investment to the tune of Rs 8 lakh and 12% on investment up to Rs 12 lakh. As part of the policy, the state government would reserve 20% land in industrial estates, industrial parks and industrial corridors for MSMEs. New industrial parks for MSMEs would be set up on a maximum area of 200 acres at all major industrial hubs in the state.

To ensure adequate flow of credit, the state government would launch the Orissa MSME Venture Scheme and also constitute a credit-monitoring group. The policy aims to boost forward linkages and encourage formation of consortiums and sub-contract exchanges. It will also promote adoption of cutting edge technology under the MSME Technology Upgradation Scheme. Cluster approach would be encouraged for development of MSMEs.

Even though the Cabinet took a slew of decisions on Sunday, there was no official briefing as the model code of conduct is in force for elections to Cuttack Municipal Corporation and Baripada Municipality. Government officials, however, disclosed the decisions on condition of anonymity.

The cabinet also took a decision to restructure the Orissa State Financial Corporation (OSFC) and the Orissa Small Industries Corporation (OSIC). The state government has decided to convert the Rs 254-crore OSFC loan to ordinary share capital so as to make it eligible for a line of credit from the Sidbi. It also decided to extend the OTS scheme for another six months with some liberal packages so that large number of defaulters would participate in the scheme.

The Cabinet has decided that the government loan of Rs 1.77 crore to the OSIC would be converted into share capital and written-off Rs 9.24 crore interest of small units.

The OSIC has been allowed to deal in cement and paints along with iron, steel and bitumen.