7 Subsidies of Entrepreneurs
Government of India provides financial support to the economic sectors in form of subsidies to various departments in the country for upliftment of the particular section. One such section for which the government provides subsidies is that of the new and upcoming entrepreneurs. The motive behind providing subsidy for the same is to encourage the investment of the new entrepreneurs so that it adds up to the economic growth of the country. Enterprises are business which can be categorized into two types i.e. one which manufactures and produces goods pertaining to a particular kind of industry and the other that is engaged in production of services. Since starting a business is a risk taken, these subsidies provide for security which can be counted on by the risk taker. It helps the entrepreneurs to develop their business and thereafter provide services to the country like increasing employment, providing goods to the market. There are various kinds of inputs required to start a company some of which can be classified as, raw material, land, machinery, management, capital etc. The government therefore provides subsidies in the aforementioned criteria so that the entrepreneur can use them to set up their new business. There are a few subsidies that must be known by the new entrepreneurs in order to obtain the benefits from the same. Following are the subsidies that must be known to the upcoming businessmen.
- Credit Linked Capital Subsidy Scheme
Small Scale Industries (hereinafter referred to as SSI) manufacture and produce their products with outdated technology as they are not well aware of the latest technology due to shortage of capital therefore this scheme aims to provide the latest technology so that the output is within the norms of the fast changing world as is required by the global market. The Ministry of Small Scale Industries therefore came up with the particular scheme which provides 15% capital subsidy to the SSI units on institutional finance availed by them for the induction of well-established and improved technology approved under the scheme for a loan of up to Rs. 1 crore.
To get MSME/SSI/Udyog Aadhar Registration click here.
- Textile Industry
In this country textile is the industry which provides maximum number of employment to the people after agriculture. It is a whole sector in its own as it provides livelihood to many live from various sects of the country. Since textile industry is very much dependent on technology, the Ministry of Textiles through its Technology up gradation fund provides financial aid to the textile industry for up gradation in its technology. Up gradation in the technology makes the output accepted and eligible for competition in global market. The scheme provides for various benefits in matters of interest reimbursement, credit linked capital subsidy etc. ISBI, SIDBI and IFCI were the nodal agencies for providing the subsidies, however, w.e.f. 1st October 2005 additional nodal banks have been appointed under TUFS for determining eligibility and releasing subsidy for the cases.
- Patent
The department of IT, MCIT and the government started a scheme to provide subsidy to the various SME and technology start-ups for international patent filing to encourage their innovation and capture growth opportunities in areas of IT. The scheme provide for subsidy of 50% of the patent cost incurred by the industry, encouraging them to get the invention patented.
To apply for Patent click here.
- Subsidy to Acquire Quality Management System
With the increasing global market, there is a need for quality standards for MSME units to compete in the market, therefore in order to encourage the same, subsidy is provided by the government to adopt quality standards in the Indian MSME units by subsidizing the cost of acquiring ISO certificates like ISO 9000 and ISO 14001. This scheme provides reimbursement of charges of acquiring ISO-9000/ ISO-14001 certifications to all industries registered as SSI, upto an extent of 75% of expenditure subject to max. of Rs 75,000/-.
To get MSME/SSI/Udyog Aadhar Registration click here.
- Market Development Assistance Schemes for MSME and Assistance on Bar Code
This scheme offers funding for participation and representation of MSME in international trade fairs where subsidy is given for air fares, and space rental charges.
Also in order to promote the system of Bar code and increase competition there is financial assistance given to the MSE by providing one time registration fee and annual recurring fee for the first 3 years.
- Cold Chain subsidy
The main source of employment in the country is always considered to be agriculture i.e. the food processing sector. This sector plays a vital role in enhancing the shelf-life of food products, thereby securing the income of the farmers. If the food are stored properly then it leads to surplus allowing export of agro and processed food. In order to do the same the Ministry of Food Processing Industry provides a subsidy to establish a cold chain. This particular subsidy provides for proper cooling and storing of the food products i.e. providing infrastructure facilities without any mediators from the farmers to the consumers. This way the scheme covers pre-cooling facilities at production sites allowing no wastage of the food before value is added to that product. Financial assistance of 50% is provided from the total cost of plant and machinery & technical civil works in all areas except in North Eastern Region including the difficult areas where a maximum of Rs. 10 crores is provided as financial assessment under this scheme.
- Jawaharlal Nehru National Solar Mission
The Government of India after launching the aforementioned scheme promotes sustainable energy generation and provides subsidy and soft loans for promotion of solar energy generation in the nation. The JNNSM provides for capital subsidy of up to 40% of the approved unit cost for solar lighting systems, whereas in special categorized states capital subsidy of 90% would be allowed.
Some of the extra subsidies that one should be aware about is that of Integrated Development of Leather Sector where the scheme aims at up gradation of the existing tanneries, footwear components and leather products by granting 30% of cost of plant to SSI and 20% to the other units. Another such industry is that of coir industry where the coir board runs subsidy schemes for the improvement in the same sector.
Furthermore there are various schemes that are being set up to encourage new entrepreneurs to come together and solve their problems. Thereafter Rajiv Gandhi Udyami Mitra Yojana aims at facilitating technology up gradation by providing capital subsidy to SSI units, including tiny, khadi, village and coir industrial units, on institutional credit availed of by them for modernization of their production equipment. With every scheme there is an opportunity to avail the same and uplift the country in the global economy.
Author: This blog is written by Ms. Anmol Srivastava, a passionate blogger & intern at Aapka Consultant.
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