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Investment Promotion Scheme (IPS) for Cottage Industries: Financial Assistance to MSMEs DNHDD

Arjan Patel 10 mins0

The Investment Promotion Scheme (IPS), launched by the Department of Industries, U.T. Administration of Dadra & Nagar Haveli and Daman & Diu, aims to nurture and empower the Micro, Small, and Medium Enterprises (MSME) sector. Under this umbrella scheme, the sub-scheme “Financial Assistance to Cottage Industries” provides significant incentives such as capital subsidy and interest subsidy to encourage the growth of cottage industries. Launched on 3rd July 2015, the scheme has been extended until 19th May 2027, ensuring continued support for local entrepreneurs, women, Scheduled Castes/ Tribes, and differently-abled individuals.

Key Highlights of the IPS Scheme

Subsidy Benefits

  • Capital Subsidy:
    • 25% of the term loan amount, up to a maximum of ₹5,00,000/-.
    • An additional 10% subsidy for Scheduled Castes/Scheduled Tribes/Women/Differently-abled individuals with 30% or more disability.
  • Interest Subsidy:
    • 50% of the interest charged by banks/NBFCs/cooperative banks will be reimbursed for up to 5 years from the date of commencement of production.

Loan Limit

  • The maximum bank loan eligible for subsidies is ₹20,00,000/-.

Objectives

  • To provide financial assistance to cottage industries and protect them from market challenges.
  • To make the Union Territory a hub for MSMEs.
  • To maximize women’s participation in business and reduce unemployment among residents.
  • To incentivize industries to hire resident laborers.

Who Can Apply?

To be eligible for the Financial Assistance to Cottage Industries scheme, applicants must meet the following criteria;

  1. Age: Must be above 18 years.
  2. Education: Should have passed at least Standard IV (4th grade).
  3. Experience/Training:
    • Completed 1 month of training from a Government of India-recognized institute in the relevant field.
      OR
    • Have 1 year of experience in the same activity.
      OR
    • Be a hereditary craftsperson.
  4. Sector: Must be associated with a cottage industry.

How to Apply?

The application process is conducted online through the official Single Window Portal. Follow these steps to apply;

Step-by-Step Application Process

Stage 1: Registration

  1. Visit the Registration Page: Go to the official Single Window Portal @swp.dddgov.in.
  2. Provide Details: Fill in your details (name, mobile number, email ID, etc.) and click “Register.”
  3. Verify Email: Check your email inbox (or spam folder) for a verification link. Click the link to verify your email address.
  4. Verify Mobile Number: Enter the OTP “111111” to verify your mobile number.
  5. Receive Credentials: After successful registration, you will receive login credentials in your registered email.

Stage 2: Application Submission

  1. Log In: Use your registered mobile number and PIN to log in.
  2. Navigate to Application Form: From the left-hand menu, click on “Departments & Services” > “District Industries Centre DD & DNH” > “Click Here” to apply for the Investment Promotion Scheme (2022-2027).
  3. Fill the Common Application Form: Provide all required details and upload mandatory documents.
  4. Submit Application: Review all details carefully and click “Submit” to complete the application process.

Post-Application Steps

  • Print Acknowledgment: Save or print the acknowledgment receipt for future reference.
  • Contact Helpdesk: For technical assistance, contact the District Industries Centre at 0260-2260871 / 0260-2260310 or email [email protected].

List of Required Documents

  • Corporate Identification Number (CIN) Document
  • Taxpayer Identification Number (TIN) Document
  • Permanent Account Number (PAN) Document
  • Goods and Services Tax Number (GST) Document
  • Other Registrations Document
  • Copy of Udyam Registration/Industrial Entrepreneur Memorandum (as applicable)
  • Partnership Deed/Firm Registration Certificate (for partnership concerns)
  • Memorandum & Articles of Association/Incorporation Certificate (for companies)
  • Land Purchase Deed/Lease Agreement (if applicable)
  • Electricity Department Sanction Order and Latest Bill
  • Consent to Operate/Renewal from PCC
  • Factory License
  • Undertaking
  • Any other document as required

Benefits of the Scheme

  • Financial Support: Provides capital subsidy and interest subsidy, significantly reducing the financial burden on entrepreneurs.
  • Promotes Local Talent: Encourages hereditary craftspersons, women, and marginalized groups to participate in the MSME sector.
  • Extended Support: Interest subsidy is available for up to 5 years, ensuring long-term relief.
  • Women Empowerment: Additional subsidies for women entrepreneurs promote gender equality in business.
  • Economic Growth: Reduces unemployment and fosters economic development in the region.

Frequently Asked Questions (FAQs)

Q1. What is the definition of a Cottage Industry?

A cottage industry refers to small-scale, decentralized manufacturing units typically run from home or small premises, focusing on traditional crafts, handmade goods, or light industrial products.

Q2. What does the scheme provide?

The scheme provides capital subsidy (up to 25%) and interest subsidy (50% of interest charged by banks) for term loans taken to set up cottage industries.

Q3. What is the maximum limit for the bank loan?

The maximum bank loan eligible for subsidies is ₹20,00,000/-.

Q4. What is the rate of capital subsidy?

The capital subsidy is 25% of the term loan amount, up to a maximum of ₹5,00,000/-.

Q5. Is there any additional subsidy for specific groups?

Yes, an additional 10% capital subsidy is provided to Scheduled Castes/Scheduled Tribes/Women/Differently-abled individuals with 30% or more disability.

Q6. Is there any age limit for the applicant?

Yes, the applicant must be above 18 years of age.

Q7. What measures are in place to prevent misuse of the subsidy scheme?

Applicants must submit detailed documentation, including proof of land ownership, training certificates, and consent to operate. Regular audits and verifications ensure transparency and prevent misuse.

Q8. What is the operative period of the scheme?

The scheme is operative from 20th May 2022 to 19th May 2027.

Q9. If an enterprise is established in 2023 and becomes eligible for the scheme, what would be the period during which benefits are applicable?

Benefits such as interest subsidy are applicable for 5 years from the date of commencement of production.

Conclusion

The Investment Promotion Scheme (IPS) and its sub-scheme Financial Assistance to Cottage Industries are transformative initiatives aimed at empowering local entrepreneurs, promoting women’s participation, and fostering inclusive economic growth in Dadra & Nagar Haveli and Daman & Diu. By providing substantial subsidies and incentives, the scheme ensures that cottage industries thrive despite market challenges.

Sources and References

For further assistance, visit the official website or reach out to the nearest District Industries Centre.

Arjan Patel

Arjan Patel is a passionate financial educator and policy researcher with over a decade of experience in rural banking and subsidy-linked credit schemes. As the founder of www.loansubsidy.in, he is committed to simplifying government loan programs and making financial benefits accessible to every citizen. Known for his grassroots insights and clear explanations, Arjan continues to bridge the gap between policy and people through digital outreach and advisory.

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