Best Government Subsidy for Small Business in India

Best Government Subsidy for Small Business in India

For efficient functioning of small sector industries, government subsidy programs can be considered as a life line for entrepreneurs. For development and growth in the small scale industry sector the central and state government on regular basis implements new incentives. These are provided for MSME in general. In this article we have provided with a complete list of such subsidies that can offer entrepreneurs with relief from the government sector.

Best subsidy programs offered by the government

1          Credit Guarantee Fund Yojana – MSME

• The CGMSME (Credit Guaranteed Micro and small enterprise) fund scheme was officially launched by the central government. Under this scheme the government aims at offering with credit free of collateral for MSME’s within the country.
• The scheme is valid to offer benefit to new and old establishments alike. To effectively implement the scheme within the country the central government formed a fund trust termed as CGFT (Credit guarantee fund trust).
• The trust ensures best implementation of the scheme in coordination with MSME’s and Development Bank of India for small industries (SIDBI).
• A credit limit for loan and capital is provided by the government under this scheme. The government provides with credit limit of Rs 100 crore to the beneficiary. The contribution is made in the ratio 1:4 by SIDBI and central government.
• A financial assistance is provided to the sick firms by the government for rehabilitating them to reestablish again.

2             Organic farming subsidy for small business

• The scheme is introduced by the government at national level in the form of subsidy program. Under this scheme the government provides with financial assistance for funding organic farms, organic fertilizers, bio-fertilizers and commercial production.
• The subsidy amount shall be released by NCDC and NABARD after approval by DAC depending on the future requirements.
• Under the subsidy the government will offer with 50 percent coverage amount that shall be disbursed to the relevant bank as reserve funds to be invested as subsidy. This amount shall be given away to the borrower by the bank.

3             Textile Industry – Technology Upgrading fund (TUFS) scheme

• This scheme was implemented by the Textile Ministry and is being used for upgrading technology. The scheme is also implemented for benefiting the jute industry alike.
• Implemented in 1999 April, the scheme is aimed at improvising state of art machine technology in this sector. Under the scheme the beneficiaries are getting around 5 percent reimbursement of interest amount.
• This reimbursement is offered by the government over the regular interest rate. Apart from this, 5 percent is offered on fluctuation rate for interest calculation valid on FCL base rate.
• Besides, additional 15 percent capital linked credit subsidy is offered for SSI sectors, and power loom sectors are offered with 20 percent credit link.
• For processing machinery an additional of 10 percent and 5 percent offered on capital and interest reimbursement subsidy.

4             Scheme for Modernization, Establishment and Upgradation of Food processing sectors

• This scheme is implemented for offering assistance for modernization, expansion and establishment of industries in food processing. It covers industries in meat, poultry, fruits, fishery, food, agricultural and milk industries.
• It also includes enhancement of spices, flavors, colors, mushrooms etc. food products for better quality.
• The government offers with relief in plant and machinery of 25 percent, to a financial assistance of Rs 50 lakh to 75 lakhs, depending on area.

5             Leather industry development scheme

• Under this scheme the benefit is provided to tanneries, foot wear industry, leather industry and other foot wear accessories manufacturers.
• Beneficiaries can avail benefit under this scheme to help develop their already established units, set up new units or relieve from burden of manufacturing expenses.
• To set up new units, entrepreneurs have to submit a copy of their registration issued by various government departments along with other documents including NOC.
• The government will offer benefit only for already established and installed units. The candidate has to provide with proper documents related to established units.

6             Technology upgradation and capital linked scheme for availing credit (CLCSS)

• For the survival of any SME’s technological advancement and upgradation is one important factor. This helps in reducing cost of manufacturing and establishing their foot in the already competitive market.
• The scheme is regulated by SSI Ministry (Small Scale Industries) so they can take the benefit of upgrading their already established units. This will help in improving their overall production.
• The assistance is offered in the form of Capital credit to the entrepreneurs (CLCSS) along with a set subsidy equivalent to around 15 percent and a maximum limitation of around Rs 15 lakhs.
• The entrepreneurs can make use of this amount for upgrading their plant and machinery. All big and small private sector or limited companies are eligible for taking benefit under this scheme.

7             Market development scheme for MSME’s

• This scheme offers with financial assistance to MSME’s for participating in Exhibitions and International trade fairs.
• The scheme offers with assistance to entrepreneurs for participating in international export promotions fairs, industry associations and Indian export organizations by MSME’s.
• The central government provides with registration fee and annual fee reimbursement of 75 percent. On behalf of the beneficiary this is paid to the GSI by the government. Reimbursement is provided for a period of 3 years.

8             quality and technology upgrading support scheme for MSME’s

• Under this scheme the government offers with subsidy for improving the standard and quality within the MSME sectors.
• Under regulations the subsidy is provided to MSME or registering under ISO certification (ISO9000 – HACCP, ISO14001).
• The subsidy offered by the government aims at increasing the overall productivity, conserving energy and upgrading technology along with expansion of their products within the local and global market.

9             Training center and Tool room scheme

• This scheme has been set up by the government to offer assistance to the state owned training centers and tool rooms.
• Government offers with financial assistance to the beneficiaries as one time grant for their establishments. A subsidy amount of Rs 9 crore or 90 percent is offered by the government under this scheme.
• The subsidy is also offered for upgrading already existing tool room that is equivalent to around Rs 7.50 crore (75 percent of the overall cost).
• Under this scheme the government aims at developing better tool room facilities within the states that will help in offering technical assistance to medium and small scale industries.
• This will also offer with assistance to help create better job opportunities for skilled and unskilled laborers, engineers and designers.

10          small business government subsidy from NSIC

• Under this scheme the NSIC offer with two distinct subsidies for marketing and material. The government provides with financial assistance to the small scale industries for purchasing raw materials.
• The fund can be used by the entrepreneurs for imports of raw materials as well as indigenous so that they can focus on manufacturing better grade product.
• For product marketing the government offers with support through NSIC to micro, small and medium grade units.

11          cold chain subsidy for small scale industry

• With an aim to help cold chain industries upgrade their units and cover more number of consumers in the market the government provides with full financial support. The amount can be used by them for improving and developing their infrastructure.
• This assistance is offered to upgrade facilities including pre-coolers, cooling units (mobile types), reefer vans and production sites.
• The government provides with financial support for organic produce industry, processing units, marine product industries, collection centers, meat produce and poultry product industries and horticulture industry.
• Apart from this various SHC, NGO, FPO, groups and organizations are also eligible to take financial assistance under this scheme.

12          Scheme for coconut producing units (TMOC) for technology advancement

• Assistance under this scheme is provided by the coconut development board as technology mission on coconut (TMOC).
• The scheme is open for any individual who wants to set up or establish coconut product based industry.
• The board offers with assistance to the candidate in exchange for transfer fee for technology.
• The government provides with assistance to candidates who want to set up food business, coconut oil manufacturing, coconut power and dry milk product and tender coconut water industry.

13          Agro-Marine processing SAMPADA scheme

• SAMPADA is a scheme for agro processing centers and marine products processing and development. It aims at providing with support to food processing units both old and new.
• Under the scheme the government offers with a set budget of Rs 6000 crore that is used for helping farmers double their income and reducing food wastage.

14          Dairy Farming – Government subsidy

• The scheme aims at improving the dairy farm sector under the NABARD subsidy scheme. The scheme also focuses on animal yields including milk and organic manure.
• The government offers with subsidy for units involved in producing animal feeds, animal produce and gobar gas along with agricultural products.

15          Horticulture subsidy scheme for small business

• NHB was established in 1984 with main objective to implement technology advancement for horticulture and harvest management.
• The government offers subsidy for setting up better infrastructure, promotion, market development and management of horticulture products.

We have provided with 15 government subsidies in this article that are run by the government for MSME’s advancement. You just need to be aware of the type of subsidy you need for your business to help get established.

Other Schemes

1. Uttar Pradesh Free “O” Level Computer Training Scheme 
2. Mukhyamantri Kanya Abhibhavak Pension Yojana MP