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Business & Entrepreneurship

Dr.Babasaheb Ambedkar Udyog Uday Yojana: Assistance for Interest Subsidy (Manufacturing Sector)

The scheme "Dr.Babasaheb Ambedkar Udyog Uday Yojana" aims to support SC/ST entrepreneurs and strengthen MSMEs, making them globally competitive.

Authority

State/ UT

Region

Gujarat

Status

Verified 2026

Updated

March 2026

What you get

Financial Assistance: | Category of Taluka Quantum of Incentive Category I8% on Term Loan with a maximum amount of ₹35,00,000/- per annum for a period of 7 yearsCategory II7% on Term Loan with a maximum amount of ₹30,00,000/- per annum for a period of 6 years Category III & Municipal Corporation Areas6% on Term Loan with a maximum amount of ₹25,00,000/- per annum for a period of 5 years

Who can apply

The firm must be a Micro/Small/Medium enterprise run by SC/ST entrepreneur.; The enterprise must be a manufacturing enterprise.; The enterprise must be engaged in the manufacturing sector.; The term loan should be availed from a recognized bank or financial institution.; The loan must be sanctioned before the enterprise starts commercial production.; If the enterprise installs a solar/renewable energy plant, it must be for captive consumption.; The enterprise must bear a minimum of 2% interest on the term loan.; The application must be submitted within the prescribed timeline.; **SC/ST Enterprise:** SC/ST Enterprise means the enterprise in which contribution of SC/ST entrepreneur is 51% or more.

Required Paperwork

  • Aadhaar Card
  • PAN Card
  • Income Certificate
  • Residence Proof (Domicile)

Common Questions

What is the "Dr. Babasaheb Ambedkar Udyog Uday Yojana"?

It is a special scheme introduced under the Industrial Policy 2020 to provide financial assistance and support to Scheduled Caste (SC) and Scheduled Tribe (ST) entrepreneurs in the MSME sector.

What sectors are prioritized under the Industrial Policy 2020?

The policy prioritizes industries such as Auto and Auto Components, Chemicals and Petrochemicals, Pharmaceuticals, Cement, Textiles, Engineering, Gems and Jewellery, and Ceramics.

How does the scheme promote export competitiveness?

The scheme emphasizes "Vocal for Local to become Global," strengthening integrated value chains and encouraging MSMEs to enhance their export potential.

What is the duration of the scheme?

The scheme is effective from August 7, 2020, and will remain in operation until August 6, 2025.

What is the objective of the component "Assistance for Interest Subsidy (Manufacturing Sector)"?

The component "Assistance for Interest Subsidy (Manufacturing Sector)" provides financial support to enterprises in the manufacturing sector by subsidizing the interest on term loans.

Who is eligible to apply for the interest subsidy?

Enterprises engaged in the manufacturing sector with a valid term loan sanctioned before the commencement of commercial production are eligible to apply.

What is the maximum interest subsidy that an enterprise can receive?

The maximum interest subsidy an enterprise can receive is 8% for Category I Taluka, 7% for Category II Taluka, and 6% for Category III Taluka, including additional benefits.

For how many years will the interest subsidy be provided?

The subsidy will be provided for a period of 5 to 7 years, depending on the category of the taluka where the enterprise is located.

Can an existing manufacturing enterprise apply for the subsidy?

Yes, an existing enterprise can apply, provided it meets the eligibility criteria and has a valid term loan sanctioned before commercial production starts.

What is the minimum interest an enterprise has to bear?

Every enterprise must bear a minimum of 2% interest on the term loan, regardless of the subsidy received.

Can an enterprise apply for the subsidy after starting commercial production?

An enterprise can apply within one year from the first loan disbursement or before commercial production begins, whichever is later.

Can an enterprise avail both State and Central Government interest subsidies?

Yes, but the total interest subsidy from both the State and Central Government cannot exceed the total interest paid to the financial institution.

What happens if an enterprise defaults on loan repayment?

If an enterprise defaults on loan repayment, the default period will be deducted from the subsidy calculation, and the enterprise may lose eligibility.

Can an enterprise receive interest subsidy for installing a solar or renewable energy system?

Yes, existing enterprises that install solar or other renewable energy systems for captive consumption are eligible for an additional interest subsidy.