What you get
- Credit Linked Interest Subsidy: 70% per annum limited to maximum of ₹60,00,000/- lakhs per annum for Five years OR, for the period of repayment of loan whichever is earlier. - Capital investment Subsidy: 15% of the investment upto a maximum of ₹10,00,00,000/-.
Who can apply
Required Paperwork
- Aadhaar Card
- PAN Card
- Income Certificate
- Residence Proof (Domicile)
Common Questions
Are penal interest and other bank charges covered under the subsidy?
No, penal interest and other bank charges are not eligible for the interest subsidy.
What type of investments are eligible for incentives under this policy?
Only Gross Fixed Capital Investment (GFCI) made in new buildings, new plant & machinery, equipment, and machineries (excluding land) are eligible for incentives for manufacturing.
What information must enterprises provide annually?
Enterprises must furnish information regarding production, sales, turnover, and employment, etc., to the concerned District Industries Centre (DIC) before the end of September each year.
What pollution control measures must enterprises follow?
Enterprises must observe pollution control measures as prescribed by the Pollution Control Committee (PCC) or other competent authorities.
How long must an enterprise remain in production to retain the Capital Investment Subsidy?
Enterprises must remain in production for 5 years from the date of commercial production. If an enterprise fails to continue production for 5 years, the amount of the Capital Investment Subsidy disbursed will be recovered as arrears of land revenue.
Are both diversification and expansion activities eligible for subsidy?
Out of diversification and expansion, only one activity will be eligible for subsidy once during the policy period.
What are the eligibility criteria for an enterprise undertaking expansion or diversification?
An existing or new enterprise carrying out an activity of expansion or diversification with an investment more than 50% of the GFCI (with at least 60% of this investment in plant & machinery) will be eligible.
What additional documentation is required for claiming the subsidy?
Enterprises must furnish Chartered Accountant certified bills to claim the subsidy.
Are loans sanctioned by banks or financial institutions eligible for subsidy?
Yes, loans sanctioned by banks or financial institutions in accordance with RBI guidelines for industries located in U.T. are eligible for subsidy under this scheme.
What is the eligibility criteria for Interest Subsidy under this Scheme?
The Enterprise will not be eligible for Interest Subsidy if the term loan is sanctioned after one year from the date of commencement of commercial production.
When does the Interest Subsidy become effective?
Interest subsidy will be eligible either from the date of the first disbursement of the loan or from the date of commencement of commercial production, whichever is later. However, reimbursement of interest subsidy shall be made only after the commencement of commercial production of the enterprise.
What happens if the Enterprise defaults on payment?
If the Enterprise becomes a defaulter in the payment of interest or installment of term loan to the Bank/Financial institution as per the guidelines of RBI and as mentioned in the certificate of the Bank/Financial institution, such default period will be deducted.
What is the scope of the interest subsidy?
The interest subsidy is applicable solely to the interest charged by financial institutions or banks on loans.
Is there a minimum interest rate requirement for eligibility?
Yes, the eligible enterprise must bear a minimum of 2% interest on term loans provided by any bank or financial institution.
How can an enterprise demonstrate compliance with the minimum interest requirement?
The enterprise is required to submit details and an undertaking confirming their compliance with the minimum interest requirement.
How is the interest subsidy disbursed?
The interest subsidy is directly credited to the respective bank or financial institution that provided the loan.
What happens to the benefit of the incentive if a newly setup enterprise is sold or transferred to a new owner within the first five years of its establishment?
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.
What is the definition of Expansion/ Diversification?
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.
What measures are in place to prevent misuse of the subsidy scheme?
Strict guidelines, documentation requirements, and verification procedures are in place to ensure that subsidies are availed by eligible enterprises for genuine purposes only.
What is the operative period of the scheme?
The operative period of scheme is from 20.05.2022 till 5 years that is 19.05.2027.
If an enterprise is established in 2023 and becomes eligible for the scheme what would be the time period in which benefits are applicable?
The enterprise can avail benefit commencing from date of production till 5 years even if that period falls beyond operative period.
How can an eligible unit apply to get the benefits of the scheme?
The eligible unit can apply by visiting 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.