Launched on 1st January 2022 by the Department of Micro, Small & Medium Enterprises and Textiles, Government of West Bengal, the “State Capital Investment Subsidy” is a sub-scheme under the “Incentive Scheme for MSMEs in Powerloom Sector”. The scheme remains valid until 31st December 2024 and is designed to offer fiscal incentives for micro, small, and medium enterprises in the powerloom sector. It specifically targets the capital investment on plant and machinery—particularly new age shuttleless powerlooms—thereby fostering enhanced production capacity and quality in the textile industry.
Key Objectives
- Boost Production & Quality: Enhance the production of high-quality fabrics by facilitating the installation of modern powerlooms.
- Sustainable Ecosystem: Create a supportive ecosystem for MSMEs by maximizing resource utilization and generating new employment opportunities.
- State Leadership: Enable West Bengal to emerge as a leader in the powerloom sector by offering competitive fiscal incentives.
Objective of the Sub-scheme
The “State Capital Investment Subsidy” entitles an eligible enterprise—irrespective of area or zone—to a subsidy on the approved project’s fixed capital investment for plant and machinery (specifically new age shuttleless powerlooms).
Benefits
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Subsidy Rate: 20% of the fixed capital investment on plant and machinery is provided as a subsidy.
Eligibility Criteria
- Sector & Enterprise Type: The scheme is applicable to all micro, small, and medium enterprises (MSMEs) operating in the powerloom sector.
- Production Commencement: Enterprises must have started production between 01.01.2022 and 31.12.2024.
- Four-Party Agreement: Enterprises should have executed an agreement with the Directorate of Textiles, a 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 must be covered by a detailed feasibility report or project report.
- Financial Sanction: The project should have been approved and sanctioned by a Central Financial Institution, Commercial Bank, or State Financial Institution.
Exclusions
- Enterprises for which eligibility certificates have already been issued or where incentives have been sanctioned and/or disbursed under the respective state scheme.
- Enterprises that received an eligibility certificate under the state scheme without any sanctioned or disbursed incentive.
- Enterprises 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).
Note:
The cost of plant and machinery is calculated based solely on the cost of powerlooms purchased and installed as per the technical specifications in the approved project. Exclusions from this calculation include:
- Equipment such as tools, jigs, dies, moulds, spare parts, and consumable stores.
- Installation charges for plant and machinery.
- Research and development equipment and pollution control equipment.
- Power generation sets and extra transformers (subject to power utility regulations).
- Bank charges and service charges to National/State Small Industries Corporations.
- Procurement or installation of cables, wiring, bus bars, electrical control panels (not mounted on individual machines), oil circuit breakers, or miniature circuit breakers for safety measures.
- Gas producer plant.
- Transportation charges for indigenous machinery from the manufacturer’s location to the enterprise site.
- Charges for technical know-how for the erection of plant and machinery.
- Storage tanks not linked with the manufacturing process.
- Fire fighting equipment.
Application Process
Offline Submission:
A micro, small, or medium enterprise in the powerloom segment must apply in the prescribed format (Form-A1) to the Directorate of Textiles before any investment in plant and machinery (new age shuttleless powerloom) is made.
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
- Copy of the Memorandum of Association and Articles of Association authenticated by the Registrar of Companies or a partnership deed (wherever applicable).
- Statement with 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 from the financial institution or bank.
- Copy of the agreement.
- Audited balance sheets for the last 2 years (if 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; for rented/leasehold properties, a copy of the rent agreement and receipt/lease agreement.
- Copy of mutation and conversion certificate of land/building.
- Copy of a valid consent to operate certificate from the WBPCB.
- Copies regarding SGST.
- Copy of the Trade Licence.
- Copy of the first electricity bill (if applicable).
- Copy of the acknowledgement of Udyam Registration.
- Copy of SC/ST certificate (if applicable).
- Copy of other statutory licenses/certificates, if necessary.
- “Self declaration” as per para 7.1(vi) of the Official Scheme Guidelines.
- Self certification on fixed assets as per Annexure-I.
Frequently Asked Questions (FAQs)
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What is the primary eligibility criteria for incentives under the “Incentive Scheme for MSMEs in Powerloom Sector”?
Eligible enterprises must be micro, small, or medium units 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 inspections upon receiving an application?
The Directorate conducts a thorough verification process, reviewing all submitted documents and performing physical inspections to ensure compliance with the scheme’s requirements. -
How is the Capital Investment Subsidy released by the Directorate of Textiles to the Bank/Financial Institution, and what requisites are necessary?
The subsidy is released to the lending institution after verification of the enterprise’s eligibility and adherence to the approved project details. Required documentation includes the self-certified fixed asset details (Annexure-I) and other relevant certificates. -
What is the procedure for claiming the Subsidy?
Eligible enterprises must submit Form-A1 along with all required documents to the Directorate of Textiles before making any investment in plant and machinery. After verification, the subsidy (20% of the fixed capital investment) is processed accordingly. -
What is the significance of the classification of areas into different zones for the scheme?
Unlike other sub-schemes, the State Capital Investment Subsidy is applicable irrespective of the area or zone, ensuring that all eligible enterprises benefit uniformly. -
Would an enterprise that has availed incentives under another state government scheme be eligible for benefits under this scheme?
No, enterprises that have already received eligibility certificates or disbursed incentives under another state government incentive scheme are excluded. -
How does the Directorate of Textiles determine the eligibility of projects financed from the enterprise’s own resources?
Eligibility is assessed based on the detailed project report or feasibility study, along with adherence to the financial and operational criteria specified in the Official Scheme Guidelines. -
What is the definition of “Fixed Capital Investment”?
Fixed Capital Investment refers to the expenditure incurred on plant and machinery (specifically new age shuttleless powerlooms) installed at the approved location, excluding costs such as installation charges, consumable stores, and other excluded items as specified in the scheme. -
What is an “Approved project”?
An approved project is one that has been sanctioned and financed by a recognized financial institution after fulfilling all the criteria outlined in the scheme’s guidelines. -
What measures are in place to prevent misuse of the subsidy scheme?
The scheme includes rigorous document verification, mandatory self-certification on fixed assets, and strict adherence to exclusion criteria to prevent duplicate benefits and ensure the proper utilization of funds. -
What action will the Directorate of Textiles take if an application is determined to be ineligible?
Ineligible applications will be notified, and further administrative or legal action may be taken as per the Official Scheme Guidelines to enforce compliance and prevent misuse.