Gujarat government has decided to lay out Rs 730 crore as ‘capital incentives’ to more than 16,000 micro, small and medium enterprises (MSMEs). This comes after 42,500 units in the state were reported scuffling.

“Every year, the government gives an assistance of about Rs 300 crore. We will give a total of Rs 730 crore this year as capital incentives to 16,000 MSMEs to help them expand or set up new units. This will create over 1.6 lakh new jobs,” M K Das, Principal Secretary, Industries and Mines Department said in an interaction with Indian Express.

A cumulative investment of 19,000 crore will be made for the 16,000 MSMEs, for which they have sought Rs 11,000 crore loans from various banks between April and July, added Das.

The cheques will be disbursed by the state’s Chief Minister, Vijay Rupani at an event on August 19.

The state government had promised to provide financial assistance to the MSMEs with regards to loans provided by the banks, and the disbursal will be done in accordance with the Industrial Policy-2015.

The government will also give 50 per cent investment in clean technology.

The number of struggling MSMEs in Gujarat has been rising. From 20,452 units that were reported to be struggling in 2013, to 42,500 units in 2016.

Currently, Gujarat has the third highest number of sick MSME units in India, just after UP with 95,989 units and Maharashtra with 52,576. The government has decided to help the MSMEs in the state by expanding their businesses or setting up new units.