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Business & Entrepreneurship

Scheme for Assistance to Micro, Small and Medium Enterprises (MSME): Assistance of Capital Investment Subsidy (Manufacturing Sector)

The "Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)" launched by the Industries and Mines Department aims to position Gujarat as a global business hub, promoting sustainable manufacturing, MSME growth, and export competitiveness.

Authority

State/ UT

Region

Gujarat

Status

Verified 2026

Updated

March 2026

What you get

Financial Assistance: | Category of TalukaQuantum of Incentive Category 125% of term loan amount upto ₹35,00,000/-; If the Eligible FCI is over ₹10,00,00,000/-, additional ₹10,00,000/- will be given.Category 220% of term loan amount upto ₹30,00,000/-; If the Eligible FCI is over ₹10,00,00,000/-, additional ₹7,50,000/- will be given.Category 3 & Municipal Corporation Areas10% of term loan amount upto ₹15,00,000/-; If the Eligible FCI is over ₹10,00,00,000/-, additional ₹5,00,000/- will be given.

Who can apply

The firm must be a Micro/Small/Medium enterprise.; The enterprise must be in the manufacturing sector.; The term loan must be sanctioned by a recognized Bank/Financial Institution (excluding NBFCs).; The enterprise must apply within one year of loan disbursement or before the commercial production starts.; The enterprise must remain operational for at least 7 years post-subsidy approval.; The enterprise must comply with pollution control measures.; Only one type of investment (Forward Integration, Backward Integration, Diversification, or Expansion) will be eligible for subsidy.

Required Paperwork

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

Common Questions

What is the "Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)"?

The "Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)" aims to position Gujarat as a global business destination by promoting sustainable manufacturing, inclusive development, and balanced regional growth.

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 of Capital Investment Subsidy"?

The component "Assistance of Capital Investment Subsidy"is a financial support scheme designed to encourage enterprises in the manufacturing sector to invest in capital assets by providing subsidies on term loans.

Who is eligible to apply for the subsidy?

Any enterprise in the manufacturing sector that has availed a term loan from a recognized bank or financial institution and meets the required conditions is eligible to apply for the subsidy.

Can an enterprise apply for the subsidy after commencing production?

Yes, an enterprise can apply after starting production, but the application must be submitted within one year of loan disbursement or before the commencement of commercial production, whichever is later.

What happens if an enterprise does not remain operational for 7 years?

If an enterprise fails to remain in production for at least 7 years, the disbursed capital investment subsidy will be recovered as arrears of land revenue.

Can an enterprise avail subsidies from both State and Central Governments?

Yes, an enterprise can avail subsidies from both the State and Central Governments, but the total subsidy amount cannot exceed the total loan disbursed by the bank or financial institution.

Are there any employment conditions that an enterprise must fulfill?

Yes, an enterprise must ensure that at least 85% of its total employees and 60% of its managerial and supervisory staff are local residents.

Can an enterprise apply if the loan is taken from a Non-Banking Financial Institution (NBFC)?

No, only loans sanctioned and disbursed by recognized banks and financial institutions under RBI guidelines are eligible for the subsidy.

Can an existing enterprise apply for the subsidy?

Yes, an existing enterprise can apply if it is undertaking Forward Integration, Backward Integration, or Diversification, provided that its additional investment is more than 25% of the Gross Fixed Capital Investment (GFCI), with at least 60% of the investment in plant and machinery.

What types of investments qualify for the subsidy?

The subsidy covers investments in new buildings, new plant machinery/equipment, and second-hand imported machinery.

What environmental regulations must an enterprise comply with?

An enterprise must comply with pollution control measures as prescribed by the Gujarat Pollution Control Board (GPCB) or any other competent authority.