Investment Promotion Scheme (IPS) for MSME Sector: Assistance of Interest Subsidy

The “Assistance of Interest Subsidy” is a sub-scheme under the Investment Promotion Scheme (IPS) for the MSME Sector in Dadra & Nagar Haveli and Daman & Diu. Initially launched on 3rd July 2015 for a period of five years by the Dept. of Industries, U.T. Administration of Dadra & Nagar Haveli and Daman & Diu, the scheme was extended from 20th May 2022 and is now operative until 19th May 2027. This scheme provides eligible industries with an interest subsidy on term loans taken for equipment, machinery, and furniture/fixtures (excluding land and building), thereby reducing the financial burden on enterprises.

Key Objectives

MSME Support: Provide incentives and assistance to nurture MSMEs, helping them overcome market challenges and remain competitive.
Promote Local Employment: Maximize women’s participation and reduce unemployment among local residents by incentivizing the use of resident labor.
Enhance Competitiveness: Ensure that MSMEs are able to access affordable financing through interest subsidies on term loans, thus encouraging capital investment in modern technology.

Objective of the Sub-scheme

The sub-scheme offers eligible industries an interest subsidy on term loans taken from banks or financial institutions (sanctioned as per RBI guidelines) for investment in equipment, machinery, and furniture/fixtures (excluding land and building). Additional benefits include:

A 10% additional interest subsidy for differently abled entrepreneurs, women entrepreneurs, and registered start-ups in the manufacturing/service sector.
A 10% additional subsidy for young entrepreneurs below the age of 35 at the time of sanction of the term loan.

Benefits

Subsidy Rate: 50% subsidy on the interest charged by the bank, subject to an upper ceiling of ₹30,00,000 per annum.
Duration: The subsidy is provided for a period of 5 years or for the period of repayment of the loan, whichever is earlier.
Additional Incentives: Extra 10% interest subsidy for qualifying differently abled, women, and young entrepreneurs.

Eligibility

Unit Type: Open to new manufacturing/service units or existing units undertaking expansion or diversification in the MSME sector.
Production Commencement: The unit must commence commercial production between 20th May 2022 and 19th May 2027.
Location: The unit should be located in the U.T. of Dadra & Nagar Haveli and Daman & Diu.
Production Commitment: The enterprise must remain in production for 5 years from the date of commercial production.
Pollution Control Compliance: Enterprises must adhere to the pollution control measures prescribed by PCC or other competent authorities (as per Notification No. PCC/DMN/13(PART IV)/2020-2021/448 dated 25/01/2021).
Loan Sanction: The term loan must be sanctioned by a bank or financial institution in accordance with RBI guidelines.
Application Timing: The application must be submitted within one year from the date of the first disbursement of the loan or on or before one year from the date of commencement of commercial production.

Exclusions

Enterprises are not eligible for the interest subsidy if the term loan is sanctioned after one year from the date of commencement of commercial production or rendering services.

Application Process

Online Registration and Application:

Registration Process:

Visit the Registration page on the Official Website.
Provide the required information and click “Register.”
Verify your email using the verification link sent (check the spam folder if necessary).
Complete account verification by clicking the link or pasting the URL in your browser.
Enter “111111” as the OTP to verify your mobile number. The mobile number and PIN will be sent to your registered email.
Upon successful registration, login credentials will be received via email.

Application Submission:

Visit the user Login page on the Official Website.
Enter your registered Mobile Number along with the PIN received via email and click “Log In.”
From the left-side menu, click on the “Departments & Services” tab.
Scroll down to “District Industries Centre DD & DNH” and click on the “Click Here” button to apply for “Investment Promotion Scheme: 2022 to 2027 (20 May 2022 to 19 May 2027).”
Complete the “Common Application Form” by entering all required details and uploading all mandatory documents.
Verify the entered information and click “Submit” to complete the application process.

Helpdesk Contacts:

District Industries Centre:
Contact No.: 0260-2260871 / 0260-2260310
Email: [email protected]
Technical Assistance (Single Window Portal – https://investdd.in):
Contact No.: 0260-2231885 / 0260-2231886
Email: [email protected]

Documents Required

Corporate Identification Number (CIN) document.
Taxpayer Identification Number (TIN) document.
Permanent Account Number (PAN) document.
Goods and Services Tax (GST) document.
Other registration documents.
Copy of Udyam Registration/Industrial Entrepreneur Memorandum, as applicable.
For partnerships: Copy of Partnership Deed and Firm Registration Certificate; for companies: Copy of Memorandum & Articles of Association and Date of Incorporation Certificate.
Copy of the land purchase deed (if operating on own land).
Copy of a registered lease agreement (minimum period of 5 years from the commencement of production) if operating on leased premises.
Copy of the sanction order from the Electricity Department along with the latest bill.
Authorization letter.
Copy of Consent to Operate/Renewal from PCC, DNH & DD (as applicable per Notification No. PCC/DMN/13(PART VI)/2020-21/448 dated 25/01/2021).
Copy of Factory License.
Undertaking as required.

Frequently Asked Questions (FAQs)

What happens to the benefit if a newly set-up enterprise is sold or transferred to a new owner within the first five years?
Refer to the detailed scheme guidelines for provisions regarding transfer of benefits.
What is the definition of Expansion/Diversification?
The official guidelines provide a comprehensive definition of expansion/diversification for MSMEs.
What measures are in place to prevent misuse of the subsidy scheme?
Strict eligibility checks, document verification, and monitoring by the Dept. of Industries help prevent misuse.
What is the operative period of the scheme?
The scheme is operative from 20th May 2022 to 19th May 2027.
If an enterprise is established in 2023, what is the benefit period?
The benefit is applicable as per the scheme’s terms, considering the date of commencement of commercial production and the stipulated production period.
What is the timeline for submitting the application?
The application must be submitted within one year from the date of the first disbursement of the loan or from the commencement of commercial production, whichever is earlier.
How can an eligible unit apply for the benefits of the scheme?
Eligible units must apply online through the Official Website following the registration and application process detailed above.
Are secondhand machineries eligible for the benefits?
The guidelines specify eligibility criteria for equipment; generally, the subsidy is intended for new investments.
Can an enterprise eligible under more than one scheme select the one offering the highest benefits?
Refer to the official guidelines; typically, an enterprise must comply with the specific conditions of each scheme.
What are the consequences if an enterprise fails to make timely interest or installment payments?
Non-compliance may result in the withdrawal of subsidy benefits and other penalties as per the scheme guidelines.
What is the minimum interest rate that must be borne on a term loan?
The scheme adheres to RBI guidelines; refer to the guidelines for detailed rate requirements.
Who directly receives the interest subsidy: the Bank/Financial Institution or the borrower?
Typically, the subsidy is credited to the loan account of the enterprise through the lending institution.
Is it compulsory to take a term loan for solar subsidy?
Solar subsidy provisions are separate; this scheme is focused on term loans for equipment, machinery, and furniture/fixtures.
Which chartered engineer can certify for building, self-fabricated machinery, or solar certificates?
The guidelines will detail the requirements for certification; consult the scheme documents for specifics.
What are dedicated industrial parks?
Dedicated industrial parks refer to designated areas for industrial development; details are provided in the official guidelines.
What is the deadline for an enterprise to submit the online application?
Applications must be submitted within one year from the date of the first disbursement of the loan or from the commencement of commercial production, as applicable.
Which types of financial institution loans are eligible under the scheme per RBI guidelines?
Eligible loans are those sanctioned by banks or financial institutions that comply with RBI guidelines. Refer to the guidelines for any exclusions.
What conditions must an enterprise meet regarding production duration to avoid repayment of the subsidy?
The enterprise must remain in production for 5 years from the date of commercial production. Failure to meet this condition may result in repayment of the subsidy as stipulated in the guidelines.