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Interest Subsidy to Micro, Small and Medium Enterprises

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1 Name of the Scheme
Scheme for financial assistance by way of credit linked Interest Subsidy to Micro, Small and Medium Enterprises.
2 Operative Period
From 27/02/2009 to 26/02/2014
3 Who will eligible to get the benefit ?
The Enterprises which are registered as an industrial unit under MSME Development act, 2006 with respective DIC are eligible to get benefit under the scheme for following purpose:

  • For establishing new enterprises which commence commercial production during operative period of the scheme.
  • For carrying out expansion or diversification with investment more than 50% of its existing gross fixed capital investment.
  • For Modernization of existing unit by investing more than 25% of its existing gross fixed capital investment to upgrade technology by way of adopting new technology/ production process and/or improving quality of products.
4 Assistance Available
  • Interest subsidy of upto 7% for micro enterprises and @ 5% for small and medium enterprises.
  • 1% additional interest subsidy to youth having less than 35 years of age in case of first project. Woman entrepreneurs will be accorded priority.
  • Maximum limit of Rs. 25 lakhs per annum, for 5 years.
5 Other Conditions
  • For the purpose of interest subsidy, the enterprise shall get term loan from Financial Institution/ Bank recognized by Reserve Bank of India.
  • The enterprise applying within one year from the date of first disbursement of loan will be eligible.
  • The enterprise must start commercial operation within the operative period of the scheme.
  • The interest subsidy will be available only on interest levied by the Financial Institution. Penal interest or other charges will not be reimbursed.
  • The interest subsidy will be for five years OR for the period of repayment of loan whichever is earlier.
  • The interest subsidy will be given to the enterprise which pays regular installments and interest to the financial institutions. If the enterprise becomes defaulter, it will not get interest subsidy for the default period and such defaulting period will be deducted from 5 years period.
  • The interest subsidy will be considered from the date of payment of first installment of term loan.
  • Disbursement will be made only after unit go into commercial production.
  • Unit will have to remain in production at least for 5 years from the commencement of commercial production.
  • Unit will have to employ at least 85% of the total employment and 60% of supervisory and managerial employment from local persons.
  • Sick units will get benefits under the scheme of rehabilitation of sick units mentioned separately under this Resolution.
  • If unit has any pending Government dues, it will not get assistance under this scheme unless it pays all such pending dues.
  • All the benefiting enterprises shall file information about annual production, sales, power consumption and such other details as may be asked by DIC on 31st of every March annually.
6 Online Application
7 Interpretation of Clubbing for Assistance to MSME Units under MSME Scheme
8 Contact officer for further details /query
Name : MR. N.M. Trivedi
Designation: Jt. Commissioner of Industries (Incentive)
Address : Block No. 1, 4th Floor, Udyog Bhavan, Sector 11, Gandhinagar-382 017
Phone : + 91 79 23252594, 23252588
E-mail : icinc@gujarat.gov.in
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