The Investment Promotion Scheme (IPS), specifically its sub-scheme Assistance of Interest Subsidy, is a game-changer for Micro, Small, and Medium Enterprises (MSMEs) operating in the Union Territory (UT) of Dadra & Nagar Haveli and Daman & Diu. Launched on 3rd July 2015 and extended until 19th May 2027, this scheme aims to empower MSMEs by providing financial relief through interest subsidies on term loans. Here’s everything you need to know about this transformative initiative.

Objective of the Investment Promotion Scheme (IPS)

The IPS is designed to;

• Nurture and protect MSMEs from market fluctuations.
• Encourage women’s entrepreneurship and participation in the business sector.
• Reduce unemployment among residents by incentivizing industries to hire resident laborers.
• Promote sustainable industrial growth in the region.

Objective of the Assistance of Interest Subsidy Sub-scheme

This sub-scheme provides eligible MSMEs with a 50% subsidy on the interest charged by banks for term loans taken for equipment, machinery, furniture, and fixtures (excluding land and building). The subsidy is capped at ₹30,00,000 per annum for a maximum of five years or until the loan repayment period, whichever is earlier.

Additional Benefits

• 10% extra subsidy for differently-abled entrepreneurs, women entrepreneurs, and registered startups in manufacturing/service sectors.
• 10% additional subsidy for young entrepreneurs below the age of 35 at the time of term loan sanction.

Eligibility Criteria

To avail the benefits of the Assistance of Interest Subsidy, enterprises must meet the following criteria:

1. Be a new manufacturing/service unit or an existing unit undertaking expansion/diversification under the MSME sector.
2. Have commenced commercial production between 20th May 2022 and 19th May 2027.
3. Be located within the UT of Dadra & Nagar Haveli and Daman & Diu.
4. Remain in production for at least five years from the date of commercial production.
5. Adhere to pollution control measures as per the guidelines issued by the Pollution Control Committee (PCC).
6. Obtain a term loan sanctioned by a bank/financial institution as per RBI guidelines.
7. Apply within one year from the first disbursement of the loan or one year from the date of commencement of commercial production, whichever is earlier.

Exclusions

The following enterprises are not eligible for the scheme;

• Those whose term loans are sanctioned after one year from the commencement of commercial production/services.

How to Apply Online

Follow these simple steps to apply for the Assistance of Interest Subsidy;

Step 1: Registration

1. Visit the official website and navigate to the Registration Page.
2. Fill in the required details and click on Register.
3. Verify your email address using the verification link sent to your inbox (check spam if not received).
4. Complete mobile number verification by entering OTP “111111”.
5. Receive login credentials via email upon successful registration.

Step 2: Application Submission

1. Log in using your registered mobile number and PIN.
2. Navigate to the Departments & Services tab from the left-hand menu.
3. Scroll down to District Industries Centre DD & DNH and click on Click Here to apply for the scheme.
4. Fill out the Common Application Form, upload all mandatory documents, and verify the entered details.
5. Click Submit to complete the process.

Documents Required

Ensure you have the following documents ready for submission;

• Corporate Identification Number (CIN), Taxpayer Identification Number (TIN), Permanent Account Number (PAN), and Goods and Services Tax Number (GST).
• Copy of Udyam Registration/Industrial Entrepreneur Memorandum (as applicable).
• Partnership Deed/Firm Registration Certificate or Memorandum & Articles of Association (for companies).
• Land purchase deed or lease agreement (if applicable).
• Sanction order from the Electricity Department and the latest electricity bill.
• Consent to Operate/Renewal from the PCC.
• Factory license and other relevant certifications.

Frequently Asked Questions (FAQs)

Q1: What happens if a newly established enterprise is sold or transferred within the first five years?

A: If the enterprise is sold or transferred within the first five years, it may lose eligibility for the interest subsidy, and any benefits availed may need to be repaid.

Q2: What is considered Expansion/Diversification?

A: Expansion refers to increasing production capacity, while diversification involves introducing new products or services. Both must align with MSME sector norms.

Q3: Are secondhand machines eligible for benefits?

A: Yes, secondhand types of machinery are eligible, provided they comply with the scheme’s requirements and are certified by a chartered engineer.

Q4: Can an enterprise choose the scheme that offers maximum benefits?

A: Yes, if eligible under multiple schemes, an enterprise can select the one offering the most benefits.

Q5: What are the consequences of delayed loan repayments?

A: Failure to make timely payments may result in penalties, suspension of subsidy benefits, or legal action by the lending institution.

Q6: Who receives the interest subsidy?

A: The subsidy is directly credited to the borrower’s account by the government.

Q7: Is taking a term loan mandatory for solar subsidies?

A: No, taking a term loan is not compulsory, but it is necessary for availing the interest subsidy.

Q8: What is the deadline for submitting applications?

A: Applications must be submitted online within one year from the first loan disbursement or one year from the commencement of commercial production, whichever is earlier.

Q9: Which financial institutions’ loans are eligible?

A: Only loans sanctioned by banks/financial institutions adhering to RBI guidelines are eligible.

Q10: What happens if production stops before five years?

A: If production ceases before five years, the enterprise may be required to repay the capital investment subsidy along with applicable penalties.

Conclusion

The Assistance of Interest Subsidy under the Investment Promotion Scheme (IPS) is a golden opportunity for MSMEs in Dadra & Nagar Haveli and Daman & Diu to reduce financial burdens and scale their operations. By leveraging this scheme, entrepreneurs can focus on innovation, job creation, and sustainable growth.

For technical assistance or queries, contact:

• District Industries Centre: 0260-2260871 / 0260-2260310
• Email ID: [email protected]
• Technical Support: 0260-2231885 / 2231886
• Official Website: Click Here
• Scheme Guidelines

Don’t miss out, apply now and take the first step toward a brighter future for your enterprise!