Capital Investment Subsidy under Industrial Policy 2020 to MSMEs in Gujarat
Gujarat has established itself as a manufacturing powerhouse for sectors such as Auto and Auto Components, Chemicals and Petrochemicals, Drugs and Pharmaceuticals, Cement, Textiles, Engineering, Gems and Jwellery and Ceramics. The Industrial Policy 2020 incorporates specific interventions for development of MSMEs. All the new enterprise which has filled Udyog Aadhar / Udyam Registration and commences commercial production during the operative period will be eligible for Capital Investment Subsidy. The operative period of the scheme shall be Five year from the date 07/08/2020 to 06/08/2025.
An existing enterprise which has commenced commercial production before the date of announcement of the scheme i.e. 07/08/2020 and increases its investment in gross fixed capital by at least 50% (out of which at least 60% of investment is made in plant and machinery for which expansion is carried out) of its existing gross fixed capital investment on the date of initiating expansion and compared with the date of commencing production during the operative period of the scheme i.e. 07/08/2020 to 06/08/2025.
Out of Forward Integration, Backward Integration, Diversification and Expansion, only one activity will be eligible for subsidy during the policy period. Existing or new enterprise carrying out an activity of Forward Integration, Backward Integration and Diversification with an investment more than 25% (out of which minimum 60% investment should be in Plant & Machinery) of GFCI will be eligible.
The Capital Investment Subsidy is available to Manufacturing unit which has started its commercial production in operative period which is 07/08/2020 to 06/08/2025. The percentage of Capital Investment Subsidy on the basis of category of taluka in which enterprise is located with maximum limit of subsidy amount is as under.
|Taluka Category||Capital Subsidy|
|Category 1||@25 % of eligible Term Loan Amount subject to a maximum amount of Rs. 35 lakhs;
If the Eligible FCI is over 10 Crores, additional INR 10 lakhs will be given
|Category 2||@20 % of eligible Term Loan Amount subject to a maximum amount of Rs. 30 lakhs;
If the Eligible FCI is over 10 Crores, additional INR 7.5 lakhs will be given
|Category 3 (including Municipal Corporation areas)||@10 % of eligible Term Loan Amount subject to a maximum amount of Rs.10 lakhs;
If the Eligible FCI is over 10 Crores, additional INR 5 lakhs will be given
Frequently asked Questions:
Q1. What is time limit to apply Capital Investment Subsidy?
Ans. Enterprise shall have to apply at online portal within one year from the date of first disbursement of loan, or on or before the date of commencement of commercial production whichever is later. The application submitted after one year will not be entitled for Capital Subsidy. The enterprise will not be eligible for capital investment subsidy under this scheme if, term loan is sanctioned after one year from the date of commencement of commercial production.
Q2. When Capital Investment Subsidy can be paid ?
Ans. It will be paid only after commencement of commercial production of the enterprise.
Q3. Is Capital Investment Subsidy available on Term Loan taken from all Banks ?
Ans. Capital Investment Subsidy is available only on term loan sanctioned by the financial institution/ Bank but term loan sanctioned by Non – Banking Financial Institutes (NBFC) will not be eligible for incentives / Capital Investment Subsidy.
Q4. Can we apply for Capital Investment Subsidy from both State and Central Governments?
Ans. Yes, enterprise can apply but, if enterprise is availing Capital subsidy under scheme of Central government then total quantum of capital subsidy from State and Central, in any case shall not exceed the total loan amount disbursed by Bank / Financial institution.
Q5. Whether Capital Investment Subsidy is available on term loan taken for all assets ?
Ans. Term loan taken for acquisition of Building, plant and machinery, utilities, tools and equipment, and other assets (excluding land) required manufacturing the end product is eligible for Capital Investment Subsidy. But only new Building, new plant machinery / equipment and second hand imported machinery will be eligible for incentives.
Q6. Any regular return to be file to concerned departments after taking subsidy ?
Ans. Yes, Enterprise shall have to furnish information regarding production, sales, turnover, and employment etc. annually to concerned DIC before end of September each year.
Q7. What are employment criteria?
Ans. Enterprise will have to employ at least 85% of the total employment and 60% of supervisory and managerial staff from local persons.
Q8. What happen for early closer of unit’s activity?
Ans. Enterprise will have to remain in production for 7 years from the date of commercial production and if it fails to continue production for 7 years, the amount of capital investment subsidy disbursed will be recovered as arrears of land revenue.
Q9. What if unit is located on more than one Talukas?
Ans. If an enterprise is located in the geographical limit of more than one taluka, then the taluka in which the enterprise has the largest percentage of land area will be considered as the eligible category.
Q10. What is Gross Fixed Capital Investment (GFCI)?
Ans. Gross Fixed Capital Investment means the investment made in Building, plant and machinery, utilities, tools and equipment, and other assets (excluding land) required manufacturing the end product.