Objective
The objective of the scheme is to assist deserving entrepreneurs in setting up small-scale industrial units by way of providing soft loan to raise the required equity insisted by the financing institutions.
Eligibility
Only newly registered SSI units are eligible for this scheme. Preference is given to tiny sectors, units owned by technocrats, women, handicapped persons, ex-service men and persons belonging to scheduled castes/tribes
Limit
Margin Money Loan is given for both term loan and working capital loan. It is limited to 20% of the cost of project or of the total working capital requirement or 50% of the margin stipulated by the financing institution either for term loan or working capital loan, whichever is less. The maximum limit of margin money loan is Rs .25 million. The interest rate is 9% per annum.
Repayment
The loan must be repaid in 16 equal quarterly instalments. In the case of term loan the first instalment of repayment is due on three months after the date on which the last instalment of the term loan falls due / 51st month of the disbursement of the margin money loan whichever is earlier. In the case of working capital loan first instalment of repayment is due on completion of the 51st month from the date of disbursement.
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An investment subsidy of 10% limited to Rs. 5.00 lakhs will be payable on the fixed capital investment; of all industrial units set up in the State except those in the Negative List.
All new units, tiny, small, medium or large included under thrust sector shall be eligible for investment subsidy at the rate of 15% of fixed capital investment subject to a ceiling of Rs. 15.00. Thrust industries are: -
Rubber based Industries, Information Technology, Agro based business, including food processing., Readymade Garments, Ayurvedic medicines, Mining, Marine products, Light Engineering, Bio Technology, 100% Export Oriented Units.
The investment subsidy for Information Technology industries will be 20% of fixed capital investment subject to a maximum of Rs. 25.00 lakhs
In the case of Industrial Units set up in Idukki, Wayanad and notified industrial areas like industrial growth centres and Industrial Parks the eligible subsidy shall be 10% of fixed capital investment subject to a ceiling of Rs. 10.00 lakhs and all thrust sector units mentioned above set up in Idukki and Wayanad districts shall be paid investment subsidy of 25% of fixed capital investment subject to a maximum of Rs. 25.00 lakhs.
An additional investment subsidy of 5% of the value of fixed capital investment subject to a ceiling of Rs. 1.00 lakh will be payable for tiny and SSI units established by entrepreneurs belonging to any one of the following categories provided the proprietor/ proprietrix, all the partners or Directors must belong the respective category.
a) Scheduled Castes and Scheduled Tribes, b) Women, c) Physically handicapped persons, d) Ex-servicemen
Industrial Units both new and existing in the tiny and SSI sectors which install equipment for renewable source of energy shall be eligible for an additional investment subsidy at 15% on such investment subject to a maximum of Rs. 5.00 lakhs per unit over and above the normal subsidies. Additional subsidy of 10% subject to maximum of Rs. 25,000/- will be provided for installation of pollution control devices in diesel generators.
Units undertaking expansion, diversification and modernisation shall also be eligible for investment subsidy at the revised rates applicable to each sector. Expansion, diversification to be eligible for investment subsidy should be different from routine replacement. ‘Modernisation’ refers to replacement of existing machinery with new machinery partially or fully with the same make or with different make. The expansion, diversification and modernisation should have been carried out as per a definite project report, over a predefined period of time. While expansion, diversification and modernisation must result in at least 25% increase in plant and machinery in Gross Block terms, expansion must also result in at least 25% increase in capacity.
The principal elements of Fixed Capital investment such as land, building, plant and machinery, electrification costs, testing equipment, generator and pollution control equipments shall be admitted to investment subsidy.
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Objective
This scheme is intended to provide financial assistance to women industrial units engaged in small scale and cottage industries and to attract more women entrepreneurs to industrial sector.
Women industrial units
These are industrial units owned/organised by women and engaged in small scale and cottage industries. Co-operative societies, joint stock companies, charitable institutions, proprietory and partnership concerns registered as SSI or cottage industrial units are also come under this category. In both the above cases 80% of the total workers employed should be women.
Eligibility for grant
Units which are registered under Women’s Industries Programme are eligible.
Procedure for registration/inclusion under WIP
The unit has to submit the application in the prescribed form to the General Manager District Industries Centre concerned.
Purpose of grant
· To meet the cost of equipments
· To meet the cost of construction of building directly related to production
· To meet the rent of the building
· To meet the salary of the following functionaries of the unit, namely, Managing Director, Secretary, Technical Expert, Manager, Stipend of trainees.
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Objectives
Objectives of the scheme is to encourage Small Scale Units to upgrade the level of technology or to use modern technology to increase productivity/increase quality of product by providing credit capital subsidy.
Scope of the scheme.
To begin with, the scheme would cover the following products/sub-sectors in the SSI.
Rubber and latex based
Clay based
Rubber wood based
Silica based
Handicrafts
Bio-technology
Rice & paddy
Chemical based
Ayurvedic products
Information technology (Software development)
Plastic based
Agro based
Waste recycling and upgradation
Oil based industries
Cash crops (coconut, spices, oleoresins etc.)
Wood based industries
Textile & garments
Electrical industries
Food processing industries
Type of units to come under the scheme.
1. |
Existing SSI units registered with the Directorate of Industries & Commerce which upgrade with State-of-the-art technology with or without expansion. |
2. |
New SSI units which are provisionally registered with the Directorate of Industries & Commerce to set up with proven technology approved by MTAB. |
Definitions of technology upgradation
Technology upgradation would ordinarily mean the induction of the state-of-the-art or near-state-of-the-art technology. Technology upgradation would mean to change the present level of technology to a higher one which results in improved productivity or/and improvement in the quality of the product or/and reduction in cost of production and/or improved environmental conditions including work environment of the units. It would also include adoption of improved packaging technologies, pollution reduction measures and energy conservation techniques.
If the new unit set up with the modern technology, create improvement in productivity or/and in product quality or/and in reduction of cost of production, and/or environmental conditions/work environment the existing technology it can also be treated as technology upgradation.
Terms & Conditions
Subsidy @ 12% of loan amount sanctioned and disbursed by FI will be given.
1. |
Cost of know-how, process technology, design and drawings. |
2. |
Setting up of in-house R&D facility for effective absorption and adoption of the acquired technology, carrying out further improvement and generation of know-why capabilities. |
3. |
Plant and machinery and equipment for upgradation |
4. |
Machinery and equipment for package improvement. |
5. |
Machinery and equipment for energy conservation. |
6. |
Machinery and equipment for pollution control/pollution reduction. |
Capital subsidy @ 12% of the loan amount sanctioned and disbursed by F.I. will be given. But maximum eligibility would be 12 % of the loan amount indicated below:
S.No. |
Existing investment limit |
Maximum ceiling of loan eligible for support |
1. |
SSI units with investment in plant and machinery less than 10 lakhs |
Rs.9 lakhs |
2. |
SSI units with investment in plant and machinery between 10 lakhs – 25 lakhs |
Rs.22 lakhs |
3. |
SSI units with investment in plant and machinery less than 50 lakhs |
Rs.45 lakhs |
4. |
SSI units with investment in plant and machinery above 50 lakhs |
Rs.90 lakhs |
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Objective
The objective of this scheme is to assist technically qualified Non-Resident Keralites to start industrial units in Kerala in the field in which they have acquired technical know-how and experience while working in industrial units in other states in India and abroad
Eligibility
This loan is given to technically qualified Non-Resident Keralites and is given for both term loan and working capital loan.
Limit
Margin money loan shall be limited to 20% of the cost of project or of the working capital requirement. The maximum limit under this scheme is Rs 0.5 million. The rate of interest shall be 9% per annum.
Repayment
The loan shall be paid back in 24 equal quarterly instalments. In the case of term loan the first instalment of repayment is due on three months after the date on which the last instalment of the term loan falls due/51st month of the disbursement of the margin money loan whichever is earlier. In the case of working capital loan the first instalment of repayment is due on completion of the 51st month from the date of disbursement.
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Two types of assistances are contemplated under this scheme. 15% Margin Money loan on working capital and 15% Investment subsidy on fixed investment.
The scheme is intended to provide finance to organisations for marketing SSI products of the State particularly in the area of setting up of show rooms, expenditure towards installing improved packaging machineries, quality certification expenditure (HACCP etc.), expenditure towards marketing consultancy services etc., NGOs, Industrial cluster Consortiums, Co-operative Societies (especially those managed by women) and individuals.
Eligibility criteria
a) Non Governmental Organisations (NGOs)
i) |
Should be registered under Society Registration Act 1860 / Indian Trust Act 1883 / Charitable and religious Act 1920 or Travancore Kochi Literary Scientific Charitable Society registration Act 1955. NGOs should have its registered office in Kerala. |
ii) |
Should have worked at least 3 years preceding the date of application. |
iii) |
Should have proven track record in business transactions, marketing, industrial retail business |
iv) |
Should have audited financial accounts for the preceding 3 years. Financial soundness to be proved to the satisfaction of the sanctioning authority. |
v) |
Marketing activity should be one of the clauses incorporated in the bye-law of the NGO. |
vi) |
The products to be marketed shall be procured from SSI units of Kerala. |
b) Co-operative Societies
i) |
preference will be given to Industrial Cooperative Societies registered under Industries Department owned and managed by women. |
ii) |
Should have worked at least 3 years preceding the date of application. |
iii) |
Should have proven track record in business transactions, marketing, industrial retail business Marketing activity should be one of the clauses incorporated in the bye-law of the Society. |
iv) |
The products to be marketed shall be procured from SSI units of Kerala. |
c) Individuals
i) |
Should have proven track record in business transactions, marketing, industrial retail business. |
ii) |
Shall be financially sound. |
iii) |
Shall be credit worthy. |
An investment Subsidy of 15% limited to Rs. 10 Lakhs will be payable on the fixed capital Investment of all Marketing Outlets set up in the State for the Marketing of SSI products.
The Principal elements of Fixed Capital Investment eligible for Investment Subsidy are:- Land, Building, Marketing Infrastructure, improved packing machine, quality certification expenses, market consultancy expenses, electrification costs, equipments, etc. on actual basis.
Marketing Outlets receiving investment subsidy will be under obligation to remain working for minimum 5 years from the date of receipt of the subsidy and shall submit quarterly sales report to GM, DIC.
The scheme intended to provide Margin Money assistance to organisations marketing SSI products of the State, who availed term loan and working capital for financial institutions. NGOs, Co-operatives (especially managed by women) Industrial clusters and individuals are eligible for assistance under this scheme.
1. All new institutions / individuals / Organisations approved by DI&C shall be eligible for Margin Money Loan (MML) from Government under this scheme.
2. Margin Money Loan will be given to working capital loan availed form Financial Institution. 15% of Margin Money Loan on total working capital with a ceiling of Rs.5 Lakhs will be admissible based on the project report approved by the Financial Institutions.
3. The promoter however will have to take a minimum of 10% of the working Capital.
The MML sanctioned under the scheme shall carry an interest of 9% per annum. Penal interest in defaulted payment will be charged as provided in Para II. All payments made by the loanee will first adjusted against penal interest of defaulted principal and / or interest, if any, and then against Principal.
Margin Money Loan granted under this scheme is to be repaid by the loanee in 16 equal quarterly installments. The first installment shall fall due 3 months after the date in which the first installment of the working capital loan is released. |
Interest in the above cases will be paid in a quarterly basis from the 90th day of the disbursement of MML by the General Manager DIC & DI&C. |
There will be a penal interest of 3% for any defaulted payment of either Principal or interest. Any payment not made within 7 days from the date it fell due will attract the penal interest of 3% per annum for the entire arrears.
No collateral Security or charge on assets of the entity during the pendency of loan by the entity to financial institutions or banks is required for the MML. But the Government shall have a charge on the assets.
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Grant Assistance to Cluster Development Activity
The grant shall be utilised for giving training to cluster members, awareness creation to stake-holders, participation in national and international Trade Fairs and Exhibitions, study tours field visits etc. The grant assistance will be limited to 50% of the actual expenditure subject to a maximum of 50,000/- per cluster per year for the activities like:-awareness creation to stake-holders, participation in national and international Trade Fairs and Exhibitions, study tours field visits etc. Total grant eligible for all activities will be limited to 2.00 Lakhs per cluster.
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Cluster Development involves the creation of Common Corporate entities, which serve the needs of cluster and are owned by them. Such entities can take up activities like sourcing of raw material, mutual credit guarantee for sourcing loans, common brand creation, marketing, setting of common Facility Service Centres, Quality testing facilities etc.
For these activities fixed assets and working capital is required. Margin money loan @ 20% as applicable under this scheme for cluster development activities subject to a maximum of Rs. 5 lakhs
Rules and conditions for providing Margin Money Loan
Margin Money Loan for Cluster Development Activities will be given for both term loan and working capital loan. MML for term loan shall be computed as the difference between the cost of project approved by the Financing Agency and the term loan extended by them to the Cluster Development.
1. Common Corporate entity shall form a consortium registered as a private Ltd. company under the Companies Act and approved by the Director of Industries & Commerce.
2. Cost of the project will include-
i) Cost of land and its development including documentation charges.
ii) Building.
iii) Plant and Machinery including all accessories / tools / jigs / fixtures / essential office equipments and furniture / lab equipments / effluent treatment plants or equipments.
iv) Electrification both industrial and building
v) Preliminary and pre-operatives expenses which shall include Registration charges of the firm, engineering drawings, cost of. the project report, Technical know-how, cost of technical supervisors during the implementation period. However this preliminary and post operative expenses shall not exceed 10% of the cost of project.
In the case of working capital the margin will be treated as the difference between the total working capital requirement as assessed by the Financing Agency and the loan made available to the entity .In case any margin money loan is sanctioned by any term loan lending institution towards working capital it shall be deducted from the total margin stipulated by the institution lending the working capital loan before computing the eligibility for margin money loans for working capital.
3. Rs 5 lakhs will be the maximum limit of this scheme for MML under term loan and working capital put together. MML shall be limited to 20% of the cost of the project in the case of MML for term loan and 20% of the total for working capital requirement in the case of MML for working capital loan.
4. The consortium/Entity however will have to take a minimum of 10% of the cost of project and working capital put together. MML shall not exceed 50% of the margin stipulated by the Financing Institution either for term loan or working capital loan.
5. The Margin Money Loan sanctioned under this scheme shall, carry an interest of 9% p.a.
6. 10. Margin Money loan granted under this scheme is to be repaid by the loanee in 16 equal quarterly installments. The .first installment shall fall due 3 months after the date on which the last installment of term loan falls due as scheduled by the Bank/financing institution originally or on completion of the 51st month of the disbursement of MML whichever is earlier.
7. In the Case of MML for working capital the principal shall be paid back in 16 Quarterly installments on completion of the 51st month from the date of disbursement.
8. No-collateral security or charge on assets of the CCE during the pendency of loan by the CCE to the financial institutions or banks is required for the MML. But the Government shall have a charge on the assets of the CCE once the term loan liabilities are serviced.
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Exemption from the payment of income tax
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Duty free import of capital goods, raw materials etc
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Exemption from the Central excise duties for the indigenous inputs
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Exemption from import license
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Domestic Tariff Area
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DTA sale of 25% generally and up to 50% on specified items of production permitted
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Reimbursement of Central sales tax
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Deemed export benefits to suppliers
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Exemption from State sales tax
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Exemption from stamp duty, registration and property taxes
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No restriction of foreign share holding
More Incentives under liberalized trade regime
Units may be engaged in the manufacture of horticulture, agriculture, floriculture, pisciculture, sericulture, poultry, animal husbandry etc. Foreigners, NRIs can freely invest in the equity of the Indian company. Fully owned Foreign companies are also allowed with provision for expatriation of dividends. Payment abroad towards capital goods import can be adjusted out of foreign/NRI equity. Import of second hand capital goods allowed. Foreign exchange realized on exports can be converted into convertible currency at market rates. Third party exports ie. Export through Export House, Star trading house, merchant exporter etc. allowed. Sub-contracting of parts of production for job work to units in domestic tariff area allowed. |
