The scheme targets the increasing number of defunct MSME units, including cashew processing units, that have ceased operations for at least 6 months (or without the time limit for those affected by the plastic ban or seeking diversification). Launched during 2020-21 by the Government of Kerala, it aims to revive and rehabilitate these units, which play a vital role in the state economy. The initiative addresses challenges like outdated technology, marketing constraints, intense competition, and high processing costs, particularly in cashew units, by promoting process mechanization as a pathway to recovery.
Objective:
• Provide capital grants and working capital incentives to revive defunct MSMEs in manufacturing, including cashew processing units.
Definitions:
• Defunct MSMEs: Units non-operational for at least 6 months (or with exceptions for plastic ban/diversification cases) that have the potential to be revived.
• Defunct Cashew Processing Units: Cashew units defunct for at least 6 months (irrespective of previous government assistance or bank loans) and in the process of revival.
Benefits
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Entitlement capped at ₹15 Lakhs per applicant unit (one-time benefit).
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Building Renovation: 25% of the total revival project cost (up to ₹2 Lakhs) for repairs, fresh roofing, and waste disposal infrastructure.
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Plant & Machinery and Electrification: 40% of the total revival project cost (up to ₹8 Lakhs) for purchasing new machinery, repairs, and industrial electrification.
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Working Capital (Margin):
• 50% margin of the working capital loan (subject to bank sanction):-
Limited to ₹2 Lakhs for defunct MSMEs
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Limited to ₹5 Lakhs for cashew processing units
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Maximum assistance limits:
• ₹12 Lakhs per unit for defunct MSMEs
• ₹15 Lakhs per unit for defunct cashew processing units
Note 01: A fresh working capital loan from a bank is mandatory for availing the Working Capital (Margin) Assistance, though not required for building renovation or machinery.
Note 02: Assistance is released on a pro-rata basis by the bank.
Eligibility
• All MSMEs in the manufacturing sector that have been defunct for at least 6 months due to genuine issues, including cashew processing enterprises with revival potential, are eligible.
Obligations of Applicant Entrepreneurs:
• Provide accurate details and necessary clarifications as requested by the recommending/sanctioning authority.
• Permit inspection or verification of details, including plant, machinery, and other assets.
• Produce original documents for verification when required.
• Execute a legal agreement on a ₹200 stamp paper upon approval and furnish a signed hard copy to the General Manager, District Industries Centre.
• Utilize the assistance strictly as per the revival project submitted.
• Operate the unit in accordance with the agreement; failure may invoke recovery under the Kerala Revenue Recovery Act.
Application Process
Online
• Step 01: Visit the official website of the Directorate of Industries & Commerce, Government of Kerala.
• Step 02: Select the scheme “Revival and Rehabilitation Scheme for Defunct MSMEs and Cashew Processing Units” from the Online Services on the home page and click on “Apply Now” (redirects to the Login Page).
• Step 03: For new users, complete the Registration process; existing users can simply Login.
• Step 04: After login, select “New Application” and click “Proceed”.
• Step 05: Complete and submit the application form.
Documents Required
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Copy of Identity Proof of the applicant
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Udyog Aadhar/Udyam Registration certificate
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Revival Project Report
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Title Deed of land or Land Tax Receipt (if applicable)
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Ownership Certificate of the building (if applicable)
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Registered Lease Deed or Rent Deed (if applicable)
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Invoice/Bill/Proof of payment for Plant, Machinery, and Electrification
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Valuation report from an Approved Civil Engineer/Chartered Engineer for civil construction
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Sanction Order from the bank for the Working Capital Loan (if any)
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Audited Balance Sheet for the year prior to becoming defunct
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Any additional document as required by the sanctioning authority
Frequently Asked Questions (FAQs)
Q: What are the objectives of the scheme?
A: To provide capital grants and working capital incentives to revive defunct MSMEs and cashew processing units, thereby restoring their contribution to the state economy.
Q: When was the scheme launched?
A: It was launched during the 2020-21 period.
Q: Which department is implementing the scheme?
A: The scheme is implemented by the Government of Kerala, specifically through the Directorate of Industries & Commerce.
Q: What does “Defunct MSME” mean?
A: It refers to MSMEs that have been non-operational for at least 6 months (with exceptions for certain cases) but have revival potential.
Q: What does “Defunct Cashew Processing Unit” mean?
A: It denotes cashew processing units that have been defunct for at least 6 months and are now in the process of revival.
Q: Which units are eligible for the scheme?
A: All manufacturing MSMEs and cashew processing units that meet the defunct criteria and have revival potential are eligible.
Q: What is the benefit provided by the scheme?
A: Assistance includes financial support for building renovation, plant & machinery, electrification, and working capital margin, with varying limits per unit.
Q: How many times can an MSME unit avail the assistance?
A: Each eligible unit can avail of the assistance only once.
Q: How is the assistance disbursed to the applicant unit?
A: The financial assistance is released by the bank on a pro-rata basis as per the approved revival project.
Q: How can an applicant unit apply for the scheme?
A: Applications must be submitted online through the official portal of the Directorate of Industries & Commerce, Government of Kerala.