Scheme for Assistance to Micro, Small and Medium Enterprises (MSME): Assistance for Interest Subsidy (Service Sector)
By Industries and Mines Department, Government of Gujarat
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Quick Answer
Provides interest subsidies on term loans for new Micro, Small, and Medium Enterprises (MSMEs) in the service sector across Gujarat, with an additional 1% for registered startups.
- Funding amount
- ₹1.25Cr – ₹2.45Cr
- Funding type
- Subsidy
- Application deadline
- Rolling
- Location
- Gujarat
- Registrations needed
- Udyam registration
About this subsidy
The "Scheme for Assistance to Micro, Small and Medium Enterprises (MSME)" is a comprehensive initiative by the Industries and Mines Department, Gujarat, designed to bolster the state's vibrant MSME sector. This sector is a crucial pillar of Gujarat's economy, contributing significantly to employment, Gross Domestic Product (GDP), and exports. Launched on August 7th, 2020, and active until August 6th, 2025, the overarching scheme aims to empower entrepreneurs and enhance the global competitiveness of MSMEs within the state.
Specifically, the "Assistance for Interest Subsidy (Service Sector)" component targets new MSMEs in the service industry. It offers a crucial financial incentive by providing subsidies on the interest component of term loans. This support is specifically for capital expenditures such as new machinery, essential equipment, and necessary furniture/fixtures, helping businesses establish or expand their operations without covering land and building costs. The scheme is structured to encourage investment and growth in the service sector, providing tailored financial relief based on the geographical location of the enterprise within Gujarat.
Eligibility
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Full eligibility criteria — entity type, stage, sector, founder profile and registration requirements — plus your fit for this program. Sign up to view.
Subsidy providers
The Industries & Mines Department (IMD) of the Government of Gujarat is the state department that makes industrial and MSME policy. Its executive arm, the Industries Commissionerate, implements those policies, both the state's and the central government's, and runs the Startup…
Learn moreBenefits & Funding
- Amount
- ₹1.25Cr – ₹2.45Cr
What You Get
This scheme offers significant financial assistance through an interest subsidy on term loans. The quantum of incentive varies based on the category of Taluka (district sub-division) where the enterprise is located:
- Category I Talukas: Eligible for an 8% interest subsidy on term loans, with a maximum annual amount of ₹35,00,000/- for a period of 7 years.
- Category II Talukas: Receive a 7% interest subsidy on term loans, capped at ₹30,00,000/- per annum for 6 years.
- Category III Talukas & Municipal Corporation Areas: Provided with a 6% interest subsidy on term loans, up to ₹25,00,000/- per annum for 5 years.
Furthermore, an additional subsidy of 1% is provided on the interest for startups registered with Udyam/MSME, further reducing their financial burden and encouraging innovation within the service sector. This comprehensive financial support helps MSMEs manage their loan repayment costs, freeing up capital for growth and operational efficiencies.
- Disbursement
- Reimbursement
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Selection Process
Applications are processed through the Investor Facilitation Portal, where eligibility is assessed based on the submitted documents and compliance with scheme guidelines. The verification involves ensuring the enterprise meets the criteria for being a new MSME, operating in an eligible service sector, and having a valid term loan from a recognized institution. Applications are screened for completeness and adherence to the scheme's terms, including timely submission within one year of loan disbursement or before commercial production. Final approval for the subsidy is granted upon successful verification of all stipulated conditions.
Application Process
- 1
Register as New Investor
Visit the Investor Facilitation Portal and complete the New Investor Registration form.
You - 2
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How to apply
Four steps from draft to disbursement — one action each.
- 1
See the questions before you start
Download every question this programme's application form asks, so you can prepare your answers offline before opening the portal.
- 2
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
- 3
Submit on the official portal
Use the official application link and verify all details before final submission.
- 4
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Program templates & documents
Files the program publishes for applicants — download these and apply in the prescribed format.
Frequently Asked Questions
What is the primary benefit of this scheme?
The primary benefit is an interest subsidy on term loans obtained for new machinery, equipment, and furniture/fixtures for new Micro, Small, and Medium Enterprises (MSMEs) in the service sector in Gujarat.
Which types of investments are covered by the subsidy?
The subsidy covers investments in new machinery, equipment, and furniture/fixtures. It explicitly excludes investments in land and buildings.
Is there any additional benefit for startups?
Yes, registered startups with Udyam/MSME Registration are eligible for an additional 1% interest subsidy on top of the standard rates applicable to their Taluka category.
How is the subsidy amount determined?
The subsidy amount depends on the category of Taluka where the enterprise is located, offering 6% to 8% interest subsidy on term loans, with maximum annual caps ranging from ₹25 lakh to ₹35 lakh, and for durations of 5 to 7 years.
When must I apply for the interest subsidy?
Enterprises must apply for the interest subsidy within one year of the term loan disbursement date or before the commencement of commercial production, whichever occurs earlier.
What happens if my enterprise ceases operations after receiving the subsidy?
A key eligibility criterion is that the enterprise must remain operational for at least 7 years post-subsidy approval. Failure to meet this condition may result in clawback or other penalties.
Sources
Data on this page is compiled from official program and provider references.
News
- Gujarat offers MSMEs interest aid, power subsidies and support for AI adoptionedexlive.com · 2 weeks ago
- Haryana notifies scheme to subsidise electric cargo vehicles for MSMEsauto.economictimes.indiatimes.com · last month
- Chandigarh Administration rolls out financial assistance plan for MSMEstribuneindia.com · last month
Source: Google News aggregated
