To be successful in business, especially on a small or medium scale, the government of India offers subsidies and incentives to businesses. For any businessperson operating a start-up or an established firm, it is vital to identify these subsidies and endowments, so that these contributions can be availed of while incurring capital costs to minimize your investment costs, narrow your interest burden, and achieve your goals even faster. Here, we are now providing a note on Must-Know Subsidies for an Indian Administrator.
1. Credit Linked Capital Subsidy Scheme (CLCSS)
Most of the SSI (Small Scale Industries) in India continue to produce goods and products with outdated technology and plant and machinery, due to a lack of awareness about the approach to capital, quality norms, and current technology. However, the liberalization and globalization of advertising have necessitated the upgrading and modernization of equipment to ensure durability and advancement of the unit. Therefore, with the intention of promoting the technology upgrade of SSI in India, the Ministry of Small Scale Industries is implementing a strategy for technology upgrade called the Credit-Linked Capital Subsidy Scheme.
The CLCSS provides fifteen percent capital contributions to SSI units on institutional finance availed of by them for the inauguration of well-organized and enhanced technology in many of the sub-parts/products certified under the scheme, for a credit of up to Rs . 1 crore.
2. Subsidy for Establishing Cold Chain
A powerful and effective food processing sector plays a significant role in the diffusion of perishable agricultural products, increasing the shelf life of feed products, raising the compensation of farmers, and generating a surplus for the export of agro- and processed foods. Therefore, in an attempt to build up an effective food processing industry, the Ministry of Food Processing Industry provides an allowance for establishing a cold chain. This strategy intends to provide economic assistance for integrated cold chain and preservation infrastructure facilities, ensuring no damage from the pasture gate to the consumer.
It involves pre-cooling facilities at construction sites, reefer vans, mobile cooling units, as well as some value-added centers, which include infrastructural facilities such as processing, multi-line processing, and collection centers for cultivation, organic production, coastal, dairy farms, foodstuff, and poultry, among others. Financial compensation of 50% of the sheer cost of plant and appliance and specialized civil works in general sections and 75% for North Eastern region, including Sikkim, Assam, and troublesome areas (Jammu & Kashmir, Himachal Pradesh, and Uttarakhand), object to a peak of Rs.10 crore is added as financial ass under this scenario.
3. Technology Upgradation Fund Scheme (TUFS) – Textile Sector
The Textile sector is the second-largest provider of business after agriculture. It supplies approximately 14% of industrial production, 4% of the GDP, and 17% of India’s export earnings. It provides direct employment opportunities to more than 35 million people, including a significant number of SC/ST and women.
Hence, the Ministry of Textiles, through its flagship project, the Technology Upgradation Fund Scheme (TUFS), has supported the business in scaling new heights and developing technology to meet international standards. Under the TUFS Scheme, an Interest Payment of 5% is added to the interest levied by monetary institutions or banks for weaving fiber technology upgradation projects. In addition, the system also serves as a source of surplus money and a cash subsidy for contributions to various types of textile manufacturing equipment, including power generators, common garment machinery, effluent treatment plants, industrial textile equipment, and handlooms.
4. Subsidy for Acquiring Quality Management System
With an ambitious international market, the implementation of quality measures has become essential for MSMEs to successfully challenge and improve profitability by enhancing internal processes. Therefore, in an attempt to gain approval for quality standards by Indian MSME units, the government of India offers a scheme wherein the cost of achieving ISO Certification, such as ISO 9000 and ISO 14001, is sponsored. The system caters to all groups, involving an SSI Registration to facilitate repayment of charges for achieving ISO-9000/ISO-14001 certifications, up to 75% of the investment, subject to a maximum of Rs. 75,000 in each case.
5. Interest Payment for MSME Units
The Gujarat State Government is attempting to promote industrial investment and make the state shareholder-friendly. It also provides for interest allowances to MSME units that are undertaking a unique investment, existing units that are establishing capacity expansion or diversification, or other units that are supplying equipment for the modernization of appliances to incorporate new technologies. MSMEs are the backbone of any economy, and this grant is designed to position Gujarat as one of the highly industrialized states in India today.
Through this plan, an interest allowance of up to 7% is offered for micro-programs and 5% for small and medium-sized enterprises. A new 1% interest allowance is presented to youth less than 35 years of age in a trial of the first project. Female entrepreneurs are likewise given priority. The maximum annual interest subsidy is Rs. 25 lakhs for a course duration of up to 5 years.
6. Capital Subsidy for Solar Lighting and Small-Capacity PV Systems
The Government of India has introduced the Jawaharlal Nehru National Solar Mission (JNNSM) to develop sustainable energy generation and meet the growing demand for power in India, while addressing the country’s energy security needs. The JNNSM offers a presentation of grants and easy credits for promoting and expanding solar energy generation nationwide.
Through the investment subsidy for solar lighting and limited-capacity PV systems, the JNNSM provides a capital contribution of up to 40% of the recommended unit cost (standard cost) for solar lighting techniques and limited-capacity photovoltaic systems. Capital contribution of 90% of the standard price would be convenient for special category states (North Eastern), Sikkim, Jammu & Kashmir, Uttarakhand & Himachal Pradesh.
7. Aid for International Patent Protection in Electronics & IT
Department of Science Technology, MCIT, GOI has introduced a program to bring economic assistance to SMEs and TechnologyStartupp groups for foreign patent filing so as to promote domestic innovation and to appreciate the significance and skills of international IP and capture advancement spaces in the field of science technology and electronics.
Through this practice, all license processing costs, including Attorneys’ Fees, License(patent) Office filing fees, Study Fees, License (patent) Search costs, and Supplementary costs for introducing the National phase-up to grant/release, are sponsored. The proposal is for up to 50% of the absolute patent cost. Support will be limited to Rs. 15 lakhs or 50% of the entire sum incurred upon entering each invention, whichever is less.
8. The Credit Guarantee Fund Scheme for Micro and Small Enterprises
The Credit Guarantee Fund Program for Micro and Small Enterprises (CGFMSME) was initiated by the Government of India to provide interest-free loans to Indian MSMEs. Both the present and the new projects are designated for the plan. The Ministry of Micro, Small and Medium Enterprises, in collaboration with the Small Industries Development Bank of India (SIDBI), established a corporation named the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement the system.
The program gives credit facilities as term benefits and a working capital office of up to Rs. 100 lakh for every acquiring entity. The volume is strengthened by the Government and SIDBI at the rate of 4:1, independently. The system also offers recovery aid to impaired units insured under the word policy.
9. Integrated Development of the Leather Sector – Scheme for the Leather Industry
The plan is extended to empower existing tanneries, the shoe and footwear segments, and leather product groups to achieve profitability gains, optimize capacity utilization, reduce costs, and conduct research and development, while also encouraging business visionaries to establish and set up new units. Recently qualified units would be assisted under the program, based on the compromise of replicating all the enforced enlistment, NOCs from all concerned Government Agencies for setting up the group, and when the plant architecture is ready for the formation of the plant and hardware.
10. Mini Tools Room and Training Centre Scheme
To encourage state governments to establish Mini Tool Rooms and Training Centers, the Government of India provides financial support in the form of a one-time allocation-in-aid. The monetary help corresponds to 90% of the value of the material for the Mini Tool Room that has been made and 75% of the cost, in fact, for an obtainable room to be developed. The primary objective of this project is to extend the tool room facility. Necessarily, the government needs to provide technical assistance and guidance facilities in machine manufacturing and design to develop qualified employees, managers, engineers, and other professionals.
11. Government Subsidy for Small Business from NSIC
NSIC offers two significant subsidies. Such as natural material support and advertising support. The Raw Material Assistance Scheme aims to help Small-Scale Industries by subsidizing the pickup of Raw Materials. This presents an opportunity for SSI to showcase its superior manufacturing capabilities. Beneath the proposal, the hold-up is extended to Micro, Small, and Medium Enterprises through the National Small Industries Corporation (NSIC) to strengthen the marketability and competitiveness of their commodities.
