Launched on 1st January 2022 by the Department of Micro, Small & Medium Enterprises and Textiles, Government of West Bengal, the “Interest Subsidy on Term Loan” sub-scheme is part of the broader Incentive Scheme for MSMEs in the Powerloom Sector. The scheme is valid until 31st December 2024 and is designed to assist eligible micro, small, and medium enterprises by providing an interest subsidy on the annual interest liability of term loans. The term loans must be borrowed from approved financial institutions such as Commercial Banks, Cooperative Banks, Scheduled Banks approved by RBI, RRBs, or other recognized financial institutions for the implementation of the approved project.
Key Objectives
- Fiscal Incentives: Extend financial support to enhance the production capacity and quality in the textile sector through the adoption of modern shuttleless powerlooms.
- Resource Optimization: Create a sustainable ecosystem for MSMEs by maximizing resource utilization, generating employment, and expanding operational capabilities.
- Competitive Edge: Position West Bengal as a leader in the powerloom sector by supporting enterprises with cost-effective financial solutions.
Benefits
For Micro & Small Enterprises:
- Zone A & B: 55% of the interest liability subsidized for a period of 5 years.
- Zone C, D & E: 70% of the interest liability subsidized for a period of 5 years.
For Medium Enterprises:
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Zone B, C, D & E: 25% of the total term loan interest paid by the enterprise for 5 years, subject to a ceiling of ₹1,75,00,000/- per year.
Note: The interest subsidy is payable annually subject to submission of a statement/certificate (as per Annexure-II) from the lending Bank/Financial Institution, confirming timely payment of interest without any defaults.
Eligibility Criteria
To qualify for this sub-scheme, enterprises must meet the following conditions:
- Sector & Type: Open to all micro, small, and medium enterprises in the powerloom sector.
- Production Commencement: Enterprises must have started production between 01.01.2022 and 31.12.2024.
- Four-Party Agreement: An agreement must have been executed with the Directorate of Textiles, the financial institution, and Tantuja.
- Unit Types: Eligible units include private, cooperative, and joint sector undertakings, as well as companies/undertakings owned and managed by the State Government and Industrial Self Help Groups (SHGs).
- Project Feasibility: The project should be supported by a detailed feasibility report or project report.
- Financial Sanction: The project must have been approved and sanctioned by a Central Financial Institution, Commercial Bank, or State Financial Institution.
Exclusions
The subsidy is not available to enterprises:
- For which eligibility certificates have already been issued, or incentives have been sanctioned and/or disbursed under the respective state scheme.
- That have been registered and issued an eligibility certificate under the state scheme without any sanctioned or disbursed incentive.
- That commenced production before 31.12.2021 and applied for incentives within the stipulated period (such claims will be governed by the respective state scheme).
Application Process
Offline Submission:
After commencing production, an eligible enterprise must submit an application in the prescribed format (Form-A2) along with all the required documents to the Directorate of Textiles.
Time Frame:
The first application must be submitted within 12 months from the date of commencement of commercial production (for enterprises starting production between 01.01.2022 and 31.12.2024).
Submission Address:
Directorate of Textiles, Handlooms, Spinning Mills, Silk Weaving & Handloom Based Handicrafts Division
New Secretariat Buildings,
1, K. S. Roy Road, 5th Floor, ‘B’ Block,
Kolkata 700001.
Tel: 033-2248 4537 / 2248 6271 (Ext. 215)
Fax: 033-2248 4537
Documents Required
- A copy of the Memorandum of Association and Articles of Association authenticated by the Registrar of Companies or partnership deed (wherever applicable).
- A statement on the names and addresses of the Directors, Partners, Owners, or Members of Cooperative or Self Help Groups.
- Copy of the approved project report.
- Loan sanction letter and disbursement letter issued by the financial institution/bank.
- Copy of the agreement.
- Audited balance sheets for the last 2 years (where applicable).
- Details of existing manufacturing activities in West Bengal, including items produced, annual approved capacity, and annual production figures for the last three years (in quantity and value in Rs. Lakh), if applicable.
- Copy of the land deed (or, in the case of rented/leasehold properties, the rent agreement and receipt/lease agreement).
- Copy of mutation and conversion certificate of the land/building.
- Copy of the valid consent to operate certificate from the WBPCB.
- Copies of SGST documents.
- Copy of the trade licence.
- Copy of the first electricity bill (wherever applicable).
- Copy of the acknowledgement of Udyam Registration.
- Copy of SC/ST certificate (where applicable).
- Copy of any other statutory licenses/certificates, if necessary.
- “Self declaration” as per para 7.1(vi) of the Official Scheme Guidelines.
- A certificate from the Bank/Financial Institution as per Annexure-II.
Frequently Asked Questions (FAQs)
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What areas are classified under “Zone A” for the purpose of determining incentives?
The Official Scheme Guidelines specify the criteria for classifying certain areas as Zone A. Please refer to the guidelines or contact the Directorate of Textiles for the detailed list. -
Which districts fall under “Zone B” for incentive classification?
The districts included in Zone B are outlined in the Official Scheme Guidelines. Applicants should review these guidelines for the most updated list. -
What is the primary eligibility criteria for incentives under the “Incentive Scheme for MSMEs in Powerloom Sector”?
The enterprise must be a micro, small, or medium unit in the powerloom sector that started production between 01.01.2022 and 31.12.2024, with an approved project supported by a detailed feasibility report. -
How does the Directorate of Textiles scrutinize and conduct physical inspection of the enterprise upon receiving its application for incentives?
The Directorate conducts thorough verification by reviewing all submitted documents and carrying out physical inspections to ensure compliance with the scheme’s requirements. -
What is the procedure for claiming the Subsidy?
Eligible enterprises must submit Form-A2 along with the required documents to the Directorate of Textiles within 12 months of commencing production. Upon verification, the interest subsidy is provided annually based on the stipulated percentages and time frames. -
What is the significance of the classification of areas into different zones for the scheme?
Zone classification helps tailor the incentive structure based on local conditions and infrastructural development, ensuring that benefits are equitably distributed and targeted where needed. -
Would an eligible enterprise that has availed of incentives or subsidies under any other state government incentive scheme be eligible for benefits under this scheme?
No, enterprises that have already received eligibility certificates or disbursed incentives under another state scheme are not eligible for additional benefits under the Incentive Scheme for MSMEs in the Powerloom Sector. -
How does the Directorate of Textiles determine the eligibility of enterprises for projects financed from their own resources?
Eligibility is determined based on the detailed project report or feasibility study, along with adherence to the financial and operational criteria set out in the Official Scheme Guidelines. -
What is an “Approved project”?
An approved project is one that has been sanctioned and financed by a recognized financial institution after meeting all the necessary criteria outlined in the scheme’s guidelines. -
What measures are in place to prevent misuse of the subsidy scheme?
The scheme includes stringent document verification, mandatory submission of supporting certificates, and physical inspections to prevent duplicate benefits and ensure proper fund utilization. -
What action will the Directorate of Textiles take if an application is determined to be ineligible?
If an application is found ineligible, the Directorate will notify the enterprise and may take further administrative or legal action as per the Official Scheme Guidelines to enforce compliance and prevent misuse.