Scheme By The Gujarat Government For MSMEs!

Gujarat is the fifth-largest state in terms of area and lies on the Western coast of India. In terms of population, the state ranks ninth, having a population of 16.4 billion. Gandhinagar is its capital. The state has the third-largest economy. Gujarat is the manufacturing hub of India. The government of Gujarat aims to make the state a globally innovative and industrial destination that would promote sustainable growth and development. To make Gujarat an attractive business destination MSMEs would play an essential role.

With this view many scheme are being offered to micro small and medium enterprises of Gujarat they are as under:-

  • The assistance of Capital and Interest Subsidy for MSMEs

This scheme of the Gujarat government is launched to help the MSMEs but is not applicable for service sector enterprises. Gujarat Industries Commissionerate is entrusted to administer and implement this scheme. By way of Interest Subsidy financial assistance is provided to the MSMEs. The main objective of this scheme are as under:-

    1. To upgrade the infrastructural facilities of both new and existing industrial areas by providing financial assistance to the MSMEs.
    2. To increase the fixed assets in Micro, Small and Medium Business.
    3. To improve the growth of Micro, Small, Medium enterprises by developing their technology, skills, quality, increasing their market and making easy access to the capital.
    4.  Forming self-help groups and up-gradation of associations to boost the potential of the MSMEs.
    5.  For the testing, raw material depot, training center, effluent treatment and for complementing the production processes facility centers are to be built.

The enterprise that has Entrepreneurs Memorandum or Udyog Aadhaar and are manufactured under the MSME Development Act, 2006 with the respective Director of Industries Commerce as a manufacturing enterprise is eligible for applying for financial help under this scheme. This scheme can be subdivided into to two parts they are as under:-

1. Capital Investment subsidy for Manufacturing Unit

This scheme is eligible on the amount of term loan that is disbursed during the operating period by the Financial Institution.

 Investment up to Rs.50 lakhs in Plant and Machinery

Financial Institutions would disburse capital Investment Subsidy at the rate of 15% of the term loan amount with and a maximum of upto Rs. 15 lakhs in Municipal Corporations areas. Whereas in the case of areas outside municipal corporations banks would disburse capital  Investment Subsidy at a rate of 20% of the term loan amount maximum upto Rs. 25 lakhs.

Investment above Rs. 50 Lakhs to Rs.2 Crore in Plant and Machineries

Capital Investment Subsidy would be disbursed at 12 % of the term loan amount and maximum upto Rs.15 lakhs in Municipal Corporations area by the financial institutions.

In areas other than municipal corporation it would be disbursed at 17 % of the term loan amount and the maximum amount is Rs.25 lakhs.

Investment above Rs.2 crore to Rs.10 crore in Plant and Machinery

10 % of the loan amount will be disbursed and a maximum grant of Rs.15lakhs in the Municipal Corporation areas.

Capital Investment Subsidy at 15 % of the loan amount by the financial institution would be disbursed and the maximum amount is Rs.25 lakhs in other areas outside the municipal corporation.

2. Interest subsidy for Manufacturing Enterprise

An enterprise that has gained its first disbursement during the operative period of this scheme would get assistance under the scheme. After the repayment of the term loan and interest to the Financial Institution interest subsidy will be reimbursed.


Area Rate of Interest of Subsidy Max Limit No.of years

Municipal corporation area

5% p.a. 25 lakh 5 yrs
Other areas outside municipal



7% p.a. 30 lakh 5 yrs


  • Reimbursement of fees to small enterprises owned by women entrepreneurs under Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

To encourage women to establish their own start-up such a scheme was launched. Under this scheme, 100% of annual service fees paid to banks or Financial institutions for collateral-free term loans would be reimbursed for a term of five years. The eligibility create a to apply for the same are as under:-

    1. The business should be operated by women.
    2. The organization should be registered as an industrial unit under the MSME Development Act, 2006 with respective DIC as a manufacturing enterprise.

Collateral-free term loan upto Rs.1 Crores can be availed from financial institutions or banks under the CGTMSE scheme.

  • Assistance in rent to MSEs

For the past few years the price of land and building are increasing but Micro and Small Enterprises have limited financial resources which cause a conference in manufacturing. To overcome this problem the government of the state had launched a scheme to assist in rent for shed and plot.

    1. The Government provides financial assistance to  Private Developers for developing ready-made sheds in Mini Estate under this scheme.
    2.  Financial Assistance in rent is also provided to MSEs.

Certain Conditions of the scheme are:-

  1. Around 50 Square Meters should be the size of the shed.
  2. The maximum size of the mini Estate should be 2 hectares.
  3. The land should be in the industrial zone or commercial zone in the Municipal Corporation Authority.
  4. Within two years the private Developer has to develop all the infrastructures for the project.
  5. Assistance will be provided to the private Developer that provides plug and play the advantage of infrastructure facilities
  6.  Operation and maintenance have to be handed over to the members of the estate by the developer.

The assistance at the rate of  50% of rent paid or Rs 50,000 p.a. whichever is less in Municipal Corporation area while the area under the Urban Development Authority assistance of 50% of rent paid or Rs 25,000p.a least of the two would be provided.

  • Schemes for Assistance Labor Intensive Industries

Separate provisions for the promotion of labor intensive industries would be created under this scheme which would help in the development of the state.

Assistance will be given to both new and existing enterprises for one-time expansion. Whereas the payroll assistance will be provided at a rate of 1200 per person & an additional  300 per women employment. In case of expansion, this payroll assistance will be provided only for additional domicile employees and it won’t be provided for re-employed persons who had been relieved by the enterprise within one year before the commencement of production of expansion.

Interest Subsidy is given at a rate of 7% and a maximum of up to  1 crore per annum for 5 years.

Only 70% of eligible fixed capital investment of an eligible unit will be considered for reimbursement under VAT related incentives. The eligible unit can reimburse up to 1/5th of the eligible limit in a year.

These schemes would not only improve the standard of living and prospective of the people of Gujarat but also would significantly contribute to the overall economic growth of the country.

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