Maharashtra Subsidy and Schemes

The Maharashtra Government provides assistance to entrepreneurs and small scale industries through various subsidies and schemes operated by state government departments or corporations. In this article, we cover three schemes operated by the Maharashtra State, Directorate of Industries, namely the Prime Minister’s Employment Generation Programme (PMEGP), Seed Money Scheme (SMS) and District Industries Center Loan Scheme.

Prime Minister’s Employment Generation Programme

Under the Prime Minister's Employment Generation Programme, a manufacturing project with an investment of up to Rs.25 lakhs and service projects with an investment of up to Rs.10 lakhs are provided financial assistance as loans from public sector banks, regional rural banks or IDBI. Up to 90% of the project cost is provided as loans for most entrepreneurs and entrepreneurs who are SC/ST/OBC/minority/woman/ex-servicemen/physically handicapped are provided a loan of up to 95% of the project cost. Project cost will include capital asset cost + working capital. Any individual above the age of 18 years is eligible for this scheme, provided they have at least passed class VIII standard.

Seed Money Scheme (SMS)

Equity or seed money is provided in the form of soft loans to encourage unemployed persons to become entrepreneurs and meet part of the margin money requirement for availing bank loans. To be eligible for this scheme, an un-employed entrepreneur must have plans for establishing an industry or service business with a project cost of up to Rs.25 lakhs in the state of Maharashtra. In such cases, seed money assistance of 15% of project cost for all Entrepreneurs and seed money assistance of 20% of project cost for Entrepreneurs who are SC/ST or OBT/NT/VT/Handicapped is provided. The maximum amount of seed money provided is Rs.3.75 lakhs, and the rate of interest on the seed money extended is 6% per annum with a holiday period of 3 years. To be eligible for availing seed capital under this scheme, the entrepreneur must be unemployed, domiciled in the state of Maharashtra for the last 15 years, between the age group of 18 to 50 years and passed at least class VII.

District Industries Centre Loan Scheme

The District Industries Center Loan Scheme provides financial assistance in the form of margin/seed money for the promotion of tiny industries in semi-urban and rural areas with a view to generating employment opportunities, including self-employment. Under this scheme, margin money is provided for those units where investment in plant and machinery does not exceed Rs.2 lakhs. All towns and rural areas having a population of less than 1 lac are covered under the Scheme. The assistance of up to 20% of the total investment or a maximum of Rs.40,000 is provided to Entrepreneurs belonging to the general category. In the case of entrepreneur belonging to scheduled caste & scheduled tribe, the assistance of up to 30 % of total fixed capital investment or a maximum of Rs. 60000/- is provided. The assistance provided in the form of a loan must be repaid back to the State Government with a 4% interest rate within 7 years.

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Frequently Asked Questions

Common questions about Maharashtra Subsidies & Schemes for Entrepreneurs.

The Prime Minister's Employment Generation Programme (PMEGP) is a scheme operated by the Maharashtra State Directorate of Industries that provides financial assistance in the form of loans from public sector banks, regional rural banks, or IDBI for manufacturing projects with an investment up to Rs.25 lakhs and service projects with an investment up to Rs.10 lakhs. The loans cover up to 90% of the project cost for most entrepreneurs and up to 95% for entrepreneurs belonging to SC/ST/OBC/minority/woman/ex-servicemen/physically handicapped categories.

To be eligible for the Seed Money Scheme (SMS) in Maharashtra, an unemployed entrepreneur must have plans for establishing an industry or service business with a project cost of up to Rs.25 lakhs in the state. They must be unemployed, domiciled in Maharashtra for the last 15 years, between the age group of 18 to 50 years, and have passed at least class VII.

Under the Seed Money Scheme (SMS), equity or seed money is provided in the form of soft loans to meet part of the margin money requirement for availing bank loans. Seed money assistance of 15% of the project cost is provided for all entrepreneurs, and 20% of the project cost is provided for entrepreneurs belonging to SC/ST or OBT/NT/VT/Handicapped categories, with a maximum amount of Rs.3.75 lakhs.

The District Industries Centre Loan Scheme provides financial assistance in the form of margin/seed money for the promotion of tiny industries in semi-urban and rural areas with a view to generating employment opportunities, including self-employment. It covers towns and rural areas with a population of less than 1 lac.

Under the District Industries Centre Loan Scheme, assistance of up to 20% of the total investment or a maximum of Rs.40,000 is provided to entrepreneurs belonging to the general category. For entrepreneurs belonging to scheduled caste & scheduled tribe, the assistance is up to 30% of the total fixed capital investment or a maximum of Rs. 60,000.

The District Industries Centre Loan Scheme is applicable for tiny industries where the investment in plant and machinery does not exceed Rs.2 lakhs. The units must be located in towns and rural areas with a population of less than 1 lac.

The financial assistance provided under the District Industries Centre Loan Scheme is in the form of a loan that must be repaid back to the State Government with a 4% interest rate within 7 years.

Under the Prime Minister's Employment Generation Programme (PMEGP), the maximum project cost eligible for financial assistance is Rs.25 lakhs for manufacturing projects and Rs.10 lakhs for service projects. Under the Seed Money Scheme (SMS), the maximum eligible project cost is Rs.25 lakhs.

For the Prime Minister's Employment Generation Programme (PMEGP), the minimum educational qualification required is passing class VIII standard.

Under the Seed Money Scheme (SMS), the financial assistance provided as a soft loan has a holiday period of 3 years and an interest rate of 6% per annum.