BPO & ESDM Investment Incentives in Madhya Pradesh: Key in Decision Making

Since 2012, Madhya Pradesh government has made significant amendments in the M.P. IT Policy from time to time in order to incentivise IT, ITeS/BPO & ESDM investments in the state.

M.P. Investment Promotion Policy 

Madhya Pradesh IT, ITeS & ESDM Investment Promotion Policy and Scheme 2016 was amended recently with more benefits added to the investors kitty.

Majorly the policy aims to promote IT, ITeS/BPO/KPO and ESDM industry in the state. For all three categories there are different packages available for investors to take benefit.

BPO/BPM/KPO Investment Promotion Package

Any BPO/BPM unit which commences operation in Madhya Pradesh shall be eligible for two types of monetary incentives.

One time Incentive

Investment promotion incentive of upto 75% on capital investment limited to below criteria:

Population of City	Category	Incentive Per Seat (in Rs.)
>10 lakh	A	50,000
10 lakh > 1 lakh	B	56,000
< 1 Lakh	C	62,000

Incentive for Operations:

Operations incentive is allowed for 4 years to support the BPO/BPM units:

Population of City	Category	Incentive Per Seat (in Rs.)
>10 lakhs	A	7,500
10 lakhs > 1 lakh	B	11,000
< 1 lakh	C	14,500

Number of people employed by such units shall be at least 1.5 times the number of seats claimed.

ESDM Package

Electronics System Design & Manufacturing is another segment which is under special focus of the government. New units commencing operations under this category are also eligible for below incentives:

One Time Capital Incentive

One time incentive is limited to INR 150 crores and payable in 7 equal annual installments.Incentive eligibility is calculated using the below criteria:

Capital Investment ( in Rs.)	Incentive
<10 crores	50% of Actual Capital Investment
>10 crores	Rs. 5 crores + 45% of  Capital Investment in excess of Rs. 10 crores.

Interest Subsidy

Interest subsidy of 5% on term loan or the actual rate charged by the lender whichever is lower is reimbursed to the new unit. Below is the criteria for interest incentive:

Loan Amount ( in Rs.)	Incentive	Maximum Limit
<10 crores	5% or Actual rate whichever is lower	50 Lakhs
>10 crores	Rs. 50 lakhs + 2% of term loan on the loan amount portion exceeding Rs. 10 crores.	3 Crores

Skill Gap Reimbursements

Incentive of 50% of the cost incurred on skill development or Rs. 10,000 whichever is lower is paid to the new unit for skill gap training imparted to M.P. domicile employees within first two years of operations.

Quality Certification Incentive

Below incentive is allowed for new units only once during their operations in M.P.

Type of Certification	Eligibility	Maximum Amount
ISO 9001 or better	50% of the cost	INR 1 Lakh
CMM/CMMi/PCMM	75% of the cost	INR 6 Lakhs

Marketing Incentive

Incentive on hosting stalls and participating in exhibitions/conferences is allowed for new units on financial year basis

Type of Event	Eligibility	Maximum Amount
Domestic	50% of the cost	INR 1 Lakh
International	50% of the cost	INR 2 Lakhs

Patent Incentive

Incentive on filling of patents by the new units established in the state of Madhya Pradesh will be allowed as per below eligibility criteria

Type of Event	Eligibility	Maximum Amount
Domestic	50% of the cost	INR 2 Lakhs
International	50% of the cost	INR 5 Lakhs

There are other non-monetary and monetary benefits which are available to both the industries for commencing new unit in the state of Madhya Pradesh. Such incentives include Stamp Duty Benefits, Land related Benefits and Incentives related to statutory regulations.

Connectivity. mix of language, talent/skill and minimum wage rates helps Madhya Pradesh to be a preferred destination for investors.

For more details on the incentive you can drop a note in comments section below.