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Gujarat Interest Subsidy


Gujarat Interest Subsidy

There is a lot of interest among Indian Entrepreneurs, NRIs and Foreign Nationals to start a business in India owing to Gujarat States’ aggressive stance on promoting the industry. In this article, we cover the interest subsidy provided to micro, small and medium enterprises in the State of Gujarat.

Gujarat Interest Subsidy Scheme

The Gujarat Government through the Gujarat State Industries Commissionerate provides interest subsidy to micro, small and medium Enterprises. Under the Gujarat interest subsidy scheme, new unit, expansion of existing units, diversification of existing units, modernization of existing units are eligible to receive interest subsidy on loan taken for the investment in capital assets.

Gujarat Interest Subsidy Scheme Eligibility

To be eligible for the interest subsidy scheme, the unit must be a Micro, Small and Medium Size unit as per the definition under the MSME Act, 2006 of the Government of India, i.e., the unit must have MSME Registration. Further, the Plant & Machinery to be installed should be new with modern state of the art technology and the unit must avail term loan from any bank or financial institution approved by the RBI for the capital investment. The unit must apply for the interest subsidy within one year of loan disbursement.

Quantum of Assistance

Under the Gujarat Interest Subsidy Scheme, the Government provides an interest subsidy of 7% for micro and small enterprises and 5% for medium enterprises. An additional 1% interest subsidy is provided to youth having less than 35 years of age in the case of the first project and Women entrepreneurs are accorded priority. Under the scheme, the maximum amount of interest subsidy will be Rs. 25 lakhs per annum, for a period of five years.

Conditions to be Complied

The following are some of the conditions a unit must comply with while receiving assistance under the Gujarat Interest Subsidy Scheme:

  • The unit must observe pollution control measures as prescribed by the Pollution Control Authorities.
  • The unit must remain in production for at least 5 years from the date of the start of commercial production.
  • The unit will have to furnish information operational and financial information wherever requested by the Gujarat Government.
  • The unit will have to employ at least 85% of the total employment and 60% of the managerial employment from the Gujarat state.
  • Units that are financially sick will not be eligible to receive benefits under this scheme.
  • The unit receiving the interest subsidy must pay all Government dues on time.
  • The unit must file an annual report to the DIC on 31st March every year, detailing annual production, sales, power consumption, and such other details.

Applying for the Gujarat Interest Subsidy Scheme

A unit can apply for the Gujarat Interest Subsidy Scheme online through the Gujarat Industries Commissionarate Portal followed by physical submission of relevant documents. Some of the document that has to be submitted while applying for the Gujarat Interest Subsidy Scheme are:

  • Copy of MSME Registration
  • Partnership Deed / Certificate of Incorporation / MOA & AOA
  • Bank loan sanction letter
  • Bank statement or loan statement as evidence for disbursement of term loan
  • Lease deed of sale deed of the premises
  • Identity and Address Proof of the Promoters
  • Financial statements certified by a Chartered Accountant
  • Affidavit in the prescribed format.

If you have plans for starting a new business in Gujarat, talk to an Business Advisors. can help you obtain bank loans and avail the Gujarat Interest Subsidy scheme.