Investment Promotion Scheme (IPS) for MSME Sector: Assistance of Fixed Capital Investment Subsidy

If a newly setup enterprise is sold or otherwise transferred to a new owner during the period of five years, the benefit of the incentive shall be available to such transferee or the new owner, only for the unexpired portion.

Expansion/Diversification means where an existing / New Enterprise increases its investment by at least 50% (out of which at least 60% of investment is made in plant and machinery for which expansion is carried out) of its existing Gross Fixed capital investment on the date of initiating expansion and compared with the date of commencing production during the operative period of the scheme. Only one Expansion / Diversification will be eligible for assistance during the operative period of the Scheme.

Strict guidelines, documentation requirements, and verification procedures are in place to ensure that subsidies are availed by eligible enterprises for genuine purposes only.

The operative period of scheme is from 20.05.2022 till 5 years that is 19.05.2027.

The enterprise can avail benefit commencing from date of production till 5 years even if that period falls beyond operative period.

The timeline to make application is within one year of first disbursement of loan or within one year of production whichever is later. the application submitted after one year will not be entitled to capital and interest subsidy.

The eligible unit can apply by visiting the single window portal website which is "swp.dddgov.in", and once page pops-up the user have to go to departments tab and select district industries tab under which the user have to click on apply for investment promotion scheme: 2022 to 2027.

In case of Manufacturing Sector, Gross Fixed Capital Investment means the investment made in building, plant and machinery, utilities, tools and equipment, and other assets (excluding Land) required for manufacturing the end product. In case of Service Sector, the Gross Fixed Capital Investment means the investment made in plant and machinery, utilities, tools and equipment, and other assets (excluding land and building) required for the services provided.

No, only new machineries shall be eligible for the benefits under the scheme. However, the existing second hand machineries can be considered for ascertaining the expansion criteria as per scheme.

Yes. The unit can select any one scheme to avail benefits if it comes under the eligibility of more than one scheme. However, units cannot apply for benefits for the similar subsidy in multiple schemes and can apply in schemes which are complementary in nature.

Gross Fixed Capital Investment in new machinery, building and new equipment as done in other schemes are considered as allowable Gross Fixed Capital Investment to avail benefits of furniture sector incentives.

A qualified person who is certified by or member of the Indian Institution of Engineers (IIE).

Dedicated industrial parks are mentioned in food processing incentives where an additional 10% will be accorded to food processing units setup in industrial parks having only food processing industries.

Existing gfci includes building, machines, equipments, or any other capex directly used for manufacturing. Criteria for expansion shall be as per the scheme.

Enterprise will have to remain in production for 5 years from the date of commercial production and if it fails to continue production for 5 years, the amount of subsidy disbursed will be recovered as arrears of land revenue.

Enterprise will have to remain in production for 5 years from the date of commercial production and if it fails to continue production for five years then the amount of capital investment subsidy disbursed will be recovered as arrears of land revenue.

If enterprise is availing Capital Subsidy under Scheme of Central Government then total quantum of Capital Subsidy from U.T. and Central, in any case shall not exceed 35% of GFCI amount disbursed by Bank / Financial institution and should submit affidavit in this regard containing details of subsidy received from GOI or any other agencies.

The enterprise shall have to submit the application through online portal within one year from the date of the first disbursement of loan or on or before one year from the date of commencement of commercial production whichever is later. The application submitted after one year will not be entitled to Capital Subsidy.

Loan sanctioned and disbursed by Bank or Financial institution as per RBI guidelines will be eligible for incentive under the Scheme. Loan sanctioned by Non-Banking Financial Institutes will not be eligible for incentive under this resolution.

Existing or New Enterprise carrying out an activity of Diversification or Expansion with an investment more than 50% (out of which minimum 60% investment should be in Plant & machinery) of GFCI will be eligible.