About Interest Subsidy (5% To 9%)
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Eligibility Criteria
- Registered Unit
The Enterprise registered as an industrial unit under MSME Development act, 2006 with respective DIC as manufacturing enterprise.
- Commencement during Operative Period
For setting up new enterprise during operative period of the scheme such enterprise has to commence production during the operative period.
- Expansion or Diversification
For carrying out expansion or diversification by existing enterprise with investment in fixed capital more than 50% of its existing gross fixed capital investment as on date of initiation of expansion/diversification. However, such investment should be minimum 60% only in plant and machinery. Such expansion/ Diversification should have been completed and it should commence production during the operative period.
Only one expansion/diversification will be eligible for assistance during the operative period of the scheme.
- Modernization
For carrying out Modernization of existing unit with investment in plant –machinery and equipment by more than 25% of its existing gross fixed capital investment, such modernization should be carried out by way of adopting new technology/ production process and/or improving quality of products.
Only one Modernization will be eligible for assistance during the operative period of the scheme.
- Only New Machinery
Old & second hand machinery will not be eligible for assistance. Only new machinery is eligible for subsidy.
- Service Enterprise Eligibility Criteria
Only New MSME Service Enterprise having an investment in Equipments more than Rs.5 lacs will be eligible for Interest Subsidy.
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Operative Period
Operative period of the Interest Subsidy will be From 01/01/2015 to 31/12/2019.
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Amount of Subsidy
| Area |
Rate of Interest Subsidy |
Maximum limit |
No. of Years |
| Municipal Corporations limit |
5% on Outstanding Term Loan |
Rs. 25 lac Per Year |
5 years |
| Other areas outside Municipal Corporations limit |
7% on Outstanding Term Loan |
Rs. 30 lac Per Year |
5 years |
- 1% additional interest subsidy, if all the promoters of the company having age less than 35 years on the date of sanction of the term loan
- 1% additional interest subsidy, if enterprise is set up by with required equity contribution for the project @100% by SC/ST/Physically Challenged and Woman Entrepreneurs.
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Conditions
- If the enterprise becomes defaulter in payment of Interest or Installments of Term Loan to Bank/Financial Institution as per guideline of RBI, Such default period will be deducted from the period of Five year.
- Enterprise will have to remain in production for 5 years from the date of commercial production.
- In case term loan is sanctioned after one year from the date of commencement of commercial production, such enterprise will not eligible for Interest subsidy under the scheme.
- Late submission of application will be considered subject to deduction of late submission period after commercial production and deduction of proportionate amount of interest subsidy from maximum ceiling.
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