Different Subsidies that You Can Avail for MSME
Do you own an MSME firm/company? Are you looking for government subsidies that can support your business? The Indian government has been offering subsidies to the MSME (Micro, Small, and Medium Enterprises) firms for a long time. Subsidies are available for various types of MSMEs. Staying connected with the latest news regarding government subsidies helps us in taking advantage of the schemes.
The Ministry of MSME is responsible for launching various subsidies that aim to improve MSMEs across pan India. They also provide subsidies for supporting the processes involved in an MSME. Read on to know more about various subsidies that you can get for MSME in India.
1. Prime Minister's Employment Generation Programme (PMEGP)
This scheme aims at providing subsidies to rural and urban micro-enterprises and thus, creating employment opportunities. This scheme was made by merging two of the earlier schemes, namely PMRY (Prime Minister's Rojgar Yojana) and REGP (Rural Employment Generation Programme). Any individual above 18 years of age can open an MSME and can take advantage of this scheme. Various MSME profiles like bakery products, curled coir production, ayurvedic tablets, etc. fall under the PMEGP scheme. This scheme will provide subsidy only for setting an MSME above 10 lakhs in the manufacturing sector and above 5 lakhs in the service sector. The subsidies and financial assistance provided to the MSMEs under this scheme are as follows:
• 10% beneficiary contribution will have to be provided by the general category MSME individuals and 5% beneficiary contribution of the total project cost is to be given by special category MSME owners. The special category includes SC, ST, OBC, NER areas, women, etc.
• The rate of subsidy provided on the project cost for the general category in rural areas is 15%, and that for urban areas is 25%.
• The rate of subsidy provided on the total project cost for the special category in rural areas is 25%, and that for urban areas is 35%.
2. Science and Technology Scheme
The Science and Technology Scheme of the Coir Board has been running for many years. In its eleventh plan, the coir board has recast the scheme's objectives without changing the nature of the scheme much. This scheme aims to assist in developing better processes in the coir industry. The government will provide funding in developing better services for MSMEs in the coir industry. The assistance which will be received under this scheme are:
• The production process in coir MSMEs will be modernised under this scheme.
• Assistance in developing machinery & equipment for MSMEs in the coir industry.
• Assistance in developing sustainable technologies & product diversification.
• Incubation, testing, and service facilities will also be provided to MSMEs in the coir industry.
3. Udyog Aadhaar
It is a twelve-digit unique identification number provided to MSMEs by Indian MSME Ministry. Micro industries up to ₹ 25 lakhs in the manufacturing sector & up to ₹ 10 lakhs in the service sector qualify for the Udyog Aadhar registration. You will also be eligible for receiving benefits from many other MSME schemes by attaining the UDYOG Aadhar registration. Small and medium enterprises under the defined industry-size criterion can also receive the subsidies/benefits of Udyog Aadhar. It not only helps in regulating the MSMEs in India but also aids in solving the unemployment scenario. The key benefits of attaining Udyog Aadhar registration are as follows:
• The fees regarding filling patent & trademarks will be reduced to half of the registered MSMEs.
• Various subsidies will be provided to boost the company revenue, including exemptions provided in government tenders and excise.
• Subsidies in the electricity bill of registered MSMEs.
• Loans will be available to MSMEs at lower interest rates.
• Registered MSMEs can gain protection from delayed payments & will receive financial aid from the government for participating in foreign business exposure.
4. Micro & Small Enterprises Cluster Development (MSE-CDP)
This scheme provides financial assistance in incorporating CFCs (Common Facility Centres) for R&D, material depot, testing centre, training centre, etc. Clusters and industrial associations can apply for the benefits of this scheme. The key subsidies and financial assistance received under this scheme are:
• 70% financial assistance in setting up CFCs with projects cost up to ₹ 15 crores. This assistance increases to 90% for setting CFCs in special states and clusters with more than 50% women, village, SC, or ST units.
• 60% financial assistance in infrastructure development of existing industries with a maximum budget of ₹ 10 crores. This assistance increases to 80% for the industries in special category states or clusters with more than 50% SC, ST, micro, or women units.
You can send your offline application through the state government or can apply online by visiting - https://cluster.dcmsme.gov.in/. The steering committee of MSE-CDP reviews all the applications and regulates this scheme.
5. Procurement and Marketing Support Scheme (P&MS)
This scheme focuses on developing domestic markets and creating awareness about the latest market techniques/trades. All the MSEs registered under the Udyog Aadhar scheme are eligible for this scheme. All the individual MSEs in the manufacturing or services sector can apply under this scheme. The key subsidies provided under this scheme are as follows:
• 80% subsidy on rent paid for industries operating on built-up space. This subsidy increases to 100% (free rent for industries operating on rented industrial space) for SC, ST, women, NER, PH, or aspirational district units.
• Subsidies for train travel will be provided to one unit from each MSE. Freight charges of 12/KM will be paid to local participants up to 50 KM.
• ₹1.50 lakhs financial aid for participating in an enterprise event for MSEs of a Metro/A-Class city. ₹1 lakhs aid is provided for participating in an enterprise event to MSEs of B-Class cities.
• ₹0.80 lakhs are provided to MSEs of other cities for participating in an enterprise event and ₹1 lakhs for MSEs in J&K, NER, or hilly areas. All the aforementioned financial aid provided under this scheme is inclusive of all taxes.
6. Entrepreneurship and Skill Development Programme (ESDP)
This scheme focuses on nurturing the young talent in the country and teaching them about the processes involved in setting up an MSE. The subsidy will be provided in the fees of educational/training programmes. Various ESDPs are conducted to nurture young entrepreneurs' skills in ITIs, polytechnics, and other tech-institutions. Young entrepreneurs are motivated to be self-dependent with the help of ESDPs. The main benefit provided under ESDP are:
ESDPs conducted for various young talents across the country with 20% of ESDPs specially conducted for SC, ST, women, or PH candidates with a monthly stipend of INR 500.
7. Assistance to Training Institutions (ATI)
This scheme is also a part of the Entrepreneurship and Skill Development Programme regulated by the Ministry of MSME. It provides financial assistance to MSEs in infrastructure development and for conducting entrepreneurship development programmes. Training institutes registered with the Ministry of MSME and state-level EDIs are eligible for this scheme's benefits.
Maximum financial assistance provided to training institutes under this scheme will be ₹2.5 crores for infrastructure development. The subsidies for conducting skill development programmes will also be provided to registered MSMEs at prescribed rates. Organisations interested in receiving financial assistance under this scheme can send their applications to the Ministry of MSME head office.
In a Nutshell
The recent COVID pandemic has adversely affected the growth of MSMEs in the country. India's government is providing subsidies on various fronts like infrastructure development, electricity concessions, training programmes, etc. MSME owners should apply for the schemes mentioned above before the applications are full. There are subsidies for MSMEs provided by the Ministry of MSME under various other scheme sets like credit support schemes, technology upgrade, quality certification, marketing promotion schemes, policy research schemes, etc. You can visit the Ministry of MSME's official website, i.e. https://msme.gov.in/, to know more about the latest subsidies/schemes.
Also read:
1) MSME – Industries that form a Foundation for a Robust Economy
2) How is the Government helping Small Businesses & Startups fight the financial crisis?
3) All About Small & Medium-Sized Enterprises (SMEs)
4) How to get your business listed on the Stock Exchange?