Motivation of Entrepreneurs and Financial Assistance for Rehabilitation of Sick Industries
By Industries and Commerce Department, Government of Puducherry
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Quick Answer
Puducherry scheme giving sick MSME units subsidies and reimbursements for diagnostic studies, expert advice and interest on rehabilitation finance.
- Funding amount
- ₹50,000 – ₹10L
- Funding type
- Subsidy
- Application deadline
- Rolling
- Location
- Puducherry
- Registrations needed
- Udyam registration
About this subsidy
Sick MSME units in Puducherry can get subsidies and reimbursements to help them recover. The scheme, Motivation of Entrepreneurs and Financial Assistance for Rehabilitation of Sick Industries, is run by the Industries and Commerce Department of the Union Territory of Puducherry.
It pays for three things. A 50% subsidy on the cost of diagnostic studies by technical institutions, up to ₹50,000. A 50% reimbursement of fees for expert suggestions on technology, marketing and finance, up to ₹50,000 per unit. An interest subsidy of 5% per annum on additional finance from banks and financial institutions for rehabilitation, up to ₹3,00,000 per year for three years.
You need an MSME unit with UAM, EM(Part-II) or Permanent Registration that counts as sick. Other firms taking over a sick unit for rehabilitation can also apply.
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
Benefits & Funding
- Amount
- ₹50,000 – ₹10L
What You Get
The scheme offers robust financial support designed to facilitate the rehabilitation of sick industrial units. Key benefits include:
- A 50% subsidy on the cost of diagnostic studies conducted by technical institutions, with a maximum cap of ₹50,000. These studies are crucial for identifying the root causes of sickness and are often initiated through financial institutions, banks, or government bodies.
- A 50% reimbursement of fees, also capped at ₹50,000 per unit, for implementing expert suggestions in technology, marketing, and finance. This encourages sick units to engage professional consultants to devise and execute recovery strategies.
- An interest subsidy of 5% per annum, limited to ₹3,00,000 per year for three years, on additional finance disbursed by banks and financial institutions for rehabilitation purposes. This significantly reduces the borrowing cost for units undertaking revival efforts, making new credit more accessible and sustainable. The total maximum interest subsidy over three years could reach ₹9,00,000. These financial incentives collectively provide a substantial boost, helping enterprises to stabilize, modernize, and regain profitability.
- Disbursement
- Reimbursement
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Selection Process
The selection process involves a thorough review by a dedicated State Level Committee. This committee evaluates the merits of each application, taking into consideration the unit's "sickness" status, the proposed rehabilitation plan, and its potential for recovery and sustained operation. The decision to grant financial assistance is based on a comprehensive assessment of these factors, ensuring that support is directed towards units with a viable path to rehabilitation.
Application Process
- 1
Obtain Application Form
Download and print the prescribed application form from the Directorate's website.
You - 2
- 3
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- 5
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.
Frequently Asked Questions
Who is eligible to apply for this scheme?
The scheme is open to MSME units registered with UAM/EM(Part-II)/Permanent Registration that are classified as "Sick" Industrial Enterprises. Firms taking over a sick unit for rehabilitation are also eligible.
How is "sickness" defined under this scheme?
"Sickness" is currently defined by a continuous decline in gross output over the previous two financial years, delay in loan repayment for more than 12 months, or erosion of net worth by 50% due to accumulated losses in the previous accounting year. These guidelines may be revised as per RBI norms.
What is the maximum financial assistance available?
The scheme offers up to ₹50,000 each for diagnostic study subsidies and expert advice reimbursements, plus an interest subsidy of up to ₹3,00,000 per year for three years, totaling a maximum potential benefit of ₹10,00,000 (₹10 lakh).
Is the application process online or offline?
The application process is strictly offline. Applicants need to download the form, fill it, attach documents, and submit it either in person or by post to the Directorate of Industries and Commerce, Puducherry.
What types of financial institutions are involved in the interest subsidy?
Financial institutions for the interest subsidy include PIPDIC, other Government Corporations, Scheduled Banks, and Co-operative Banks. The interest subsidy itself will be disbursed through these financial institutions.
Can I apply if my business is not yet incorporated?
No, the scheme specifically targets existing MSME units that have obtained UAM/EM(Part-II)/Permanent Registration, indicating an incorporated or formally registered business entity. Pre-incorporation entities are not eligible.
