To promote a vibrant business community and generate employment, the Government of India provides a host of subsidies and incentives for business. For any entrepreneur managing a startup or an established business, it is important to know about these subsidies and incentives – so that these subsidies are availed while incurring capital expenditure to reduce capital cost, lessen interest burden and achieve break-even faster. We now present a list of 7 Must Know Subsidies for an Indian Entrepreneur.
Credit Linked Capital Subsidy Scheme [CLCSS]
Many of the Small Scale Industries (SSI) in India continue to manufacture goods and products with outdated technology and plant & machinery due to the lack of awareness about access to capital, quality standards and modern technology. However, the globalization and liberalization of the market, has necessitated upgradation and modernization of equipment to ensure survival and growth of the unit. Therefore in an effort to facilitate the technology upgradation of SSI in India, the Ministry of Small Scale Industries is operating a scheme for technology upgradation called the Credit Linked Capital Subsidy Scheme.
The CLCSS provides 15% capital subsidy to SSI units on institutional finance availed by them for the induction of well established and improved technology in many of the sub-sectors/products approved under the scheme for a loan of upto Rs.1 crore. Click here to view Credit Linked Capital Subsidy Scheme Guidelines.
Subsidy for Establishing Cold Chain
A strong and dynamic food processing sector plays a vital role in reduction in the wastage of perishable agricultural produce, enhancing shelf life of food products, enhancing income of farmers and creating surplus for the export of agro & processed foods. Therefore, in an effort to develop a strong food processing industry, the Ministry of Food Processing Industry provides a subsidy for establishing cold chain.The objective of this scheme is to provide financial assistance for integrated cold chain and preservation infrastructure facilities without any break from the farm gate to the consumer. It covers pre-cooling facilities at production sites, reefer vans, mobile cooling units as well as value addition centres which includes infrastructural facilities like processing/multi-line processing/collection centres, etc. for horticulture, organic produce, marine, dairy, meat and poultry etc. Financial assistance (grant-in-aid) of 50% the total cost of plant and machinery and technical civil works in general areas and 75% for NE region including Sikkim and difficult areas (J&K, Himachal Pradesh and Uttarakhand), subject to a maximum of Rs.10 crore is provided as financial ass under this scheme. Click here to know more about MOFPI Cold Chain Subsidy Guidelines.
Technology Upgradation Fund Scheme (TUFS) – Textile Sector
The Textiles sector is the second largest provider of employment after agriculture. It contributes about 14% to industrial production, 4% to the GDP, and 17% to the country’s export earnings. It provides direct employment to over 35 million people, which includes a substantial number of SC/ST, and women. Therefore, the Ministry of Textiles through its flagship scheme, the Technology Upgradation Fund Scheme(TUFS) has helped the industry scale new heights and improve technology to match global standards.Under the TUFS Scheme, Interest Reimbursement of 5% is provided on interest charged by the financial institutions or banks for textile technology upgradation projects. In addition, the scheme also provides for margin money and/or capital subsidy for investment in many types of textiles manufacturing equipment like powerlooms, common effluent treatment plants, garmenting machinery, machinery for technical textiles, handlooms, etc., Click here to know more about TUFS Scheme Guidelines.
Subsidy for Acquiring Quality Management System
With a competitive global market, implementation of quality standard has become mandatory for MSME units to successfully compete and improve profitability by optimizing internal processes. Therefore, in an effort to increase the adoption of quality standards by Indian MSME units, the Government of India provides a subsidy, wherein the cost of acquiring ISO Certifications like.
ISO 9000 and ISO 14001 is subsidized.
The scheme provides for all units having an SSI Registration to have reimbursement of charges of acquiring ISO-9000/ISO-14001 certifications to the extent of 75% of the expenditure subject to a maximum of Rs.75,000/- in each case. Click here to know more about Subdidy for Technology Quality Upgradation.
Interest Subsidy for MSME Units in Gujarat
The Gujarat State Government in an effort to boost industrial investment and make the state more investor friendly provides for interest subsidies to MSME units that are making new investment or existing units that are investing in capacity addition or diversification or existing units that are investing in modernization of machinery to newer technology. MSME’s are the backbone of any economy and this subsidy is setup to make Gujarat among the highly industrialized state in the country today.
Through this scheme, an interest subsidy of upto 7% for micro enterprises and 5% for small and medium enterprises is provided. An additional 1% interest subsidy is provided to youth having less than 35 years of age in case of first project. Woman entrepreneurs are also accorded priority. The maximum amount of interest subsidy provided per annum is Rs.25 lakhs for upto a period of 5 years. Click here to know more about Gujarat Interest Subsidy Scheme for MSME’s.
Capital Subsidy for Solar Lighting and Small Capacity PV Systems
The Government of India has launched the Jawaharlal Nehru National Solar Mission (JNNSM) to promote sustainable energy generation and support the growing need for energy in India while addressing India’s energy security challenge. The JNNSM provides a host of subsidies and soft loans for the promotion and penetration of solar energy generation in the nation.
Through the capital subsidy for solar lighting and small capacity PV systems, the JNNSM provides capital subsidy of upto 40% of the approved unit cost (benchmark cost) for solar lighting systems and small capacity Photovoltaic systems. Capital subsidy of 90% of the benchmark cost, would be available for special category states, viz. NE, Sikkim, J&K, Himachal Pradesh and Uttarakhand.
Support for International Patent Protection in Electronics & IT
Department of Information Technology, MCIT, GOI has started a scheme to provide financial support to SMEs and Technology Start-Up units for international patent filing so as to encourage indigenous innovation and to recognize the value and capabilities of global IP and capture growth opportunities in the area of information technology and electronics.
Through this scheme, all patent processing costs including Attorneys’ Fees, Patent Office filing fees, Examination Fees, Patent Search cost, Additional cost for entering National Phase upto grant/issue is subsidized. The scheme provides reimbursement of upto 50% of the total patent cost. Support will be limited to Rs.15 lakhs or 50% of the total expenses incurred on filing each invention whichever is less. Click here to know more about subsidy for International Patent Protection.