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> Additional Subsidy: 1% extra interest subsidy for registered startups in the service sector with Udyam/MSME Registration.
Who can apply
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.
Who is eligible to apply for the interest subsidy scheme?
Only new MSMEs in the service sector, as listed in Annexure A and B, are eligible to apply for the interest subsidy scheme.
What type of expenses are covered under the subsidy?
The subsidy covers interest on term loans taken for new machinery, equipment, and furniture/fixtures, excluding land and building.
What is the maximum subsidy amount an enterprise can receive?
The maximum subsidy amount depends on the Taluka category: | Category I: Up to [?]35,00,000/- per annum for 7 years. | Category II: Up to [?]30,00,000/- per annum for 6 years. | Category III & Municipal Corporation Areas: Up to [?]25,00,000/- per annum for 5 years.
Is there any additional benefit for startups?
Yes, registered startups in the service sector with Udyam/MSME registration receive an additional 1% interest subsidy.
Can an enterprise apply for the subsidy if it has already started commercial production?
No, the application must be submitted within one year from the date of loan disbursement or before the commencement of commercial production, whichever is later.
Can an enterprise avail of subsidies from both the Central and State Government?
Yes, an enterprise can avail of both subsidies; however, the total subsidy amount from both sources cannot exceed the total interest paid to the bank or financial institution.
What happens if an enterprise defaults on loan repayment?
If an enterprise defaults on loan repayment as per RBI guidelines, the interest subsidy will not be provided for the default period.
Is there any penalty for late submission of the application?
Yes, late applications will be considered with deductions for the late period from the maximum permissible subsidy.
Is MSME/Udyam registration mandatory for availing the subsidy?
Yes, an enterprise must have MSME/Udyam registration to be eligible for the interest subsidy scheme.
Can an existing business apply for this scheme?
No, only new MSMEs in the service sector are eligible to apply under this scheme.
Will the interest subsidy cover penal interest or other bank charges?
No, the interest subsidy will only cover the standard interest on the term loan and will not include penal interest or any additional bank charges.
When will the subsidy amount be reimbursed?
The subsidy will be reimbursed only after the enterprise has commenced commercial production or started providing services.