Incentive Scheme for MSMEs in Powerloom Sector: Interest Subsidy on Term Loan

Incentive Scheme for MSMEs in Powerloom Sector: Interest Subsidy on Term Loan

The “Interest Subsidy on Term Loan” initiative, part of the “Incentive Scheme for MSMEs in Powerloom Sector,” is a significant program launched by the Department of Micro, Small & Medium Enterprises and Textiles in West Bengal. This scheme is designed to support small businesses by providing financial assistance to reduce their interest burden on loans taken from approved financial institutions for the development of powerloom projects. The scheme commenced on January 1, 2022, and will continue until December 31, 2024.

Overview of the Scheme

The “Interest Subsidy on Term Loan” is specifically tailored to encourage micro, small, and medium enterprises (MSMEs) in the powerloom sector. This initiative aims to promote the installation of modern shuttleless powerlooms, enhancing fabric production quality while fostering a sustainable ecosystem for MSMEs. By doing so, it seeks to optimize resource utilization, create employment opportunities, and position West Bengal as a leader in the powerloom industry across India.

Key Objectives

• To provide financial incentives for MSMEs installing new shuttleless powerlooms.
• To enhance the production quality of textiles.
• To establish a sustainable ecosystem that maximizes resource utilization.
• To generate new employment opportunities within the sector.
• To expand the operational scope of MSMEs in West Bengal.

Interest Subsidy Benefits

Eligible enterprises can benefit from the interest subsidy as follows:

• For Micro & Small Enterprises:
• Zone A & B: 55% of the annual interest liability for a duration of 5 years.
• Zone C, D & E: 70% of the annual interest liability for a duration of 5 years.
• For Medium Enterprises:
• Zone B, C, D & E: 25% of the total interest paid on the Term Loan for 5 years, with a cap of ₹1,75,00,000 per year.

It is essential to note that the interest subsidy is disbursed annually, contingent upon the submission of a statement or certificate from the lending institution, confirming timely interest payments without defaults.

Eligibility Criteria

The following criteria must be met for eligibility under this scheme:

• Applicable to all micro, small, and medium enterprises within the powerloom sector.
• Production must have commenced between January 1, 2022, and December 31, 2024.
• A Four-party agreement must be executed involving the Directorate of Textiles, a financial institution, and Tantuja.
• The enterprise should be a private sector, cooperative sector, or joint sector entity, including those managed by the State Government or Industrial Self-Help Groups (SHGs).
• A detailed feasibility report or project plan must be prepared.
• The project must receive approval and sanction from a Central Financial Institution, Commercial Bank, or State Financial Institution.

Exclusions

The following entities are not eligible for the scheme:

• Enterprises that have already received eligibility certificates and incentives under other state schemes.
• Enterprises that have received eligibility certificates but have not had incentives sanctioned or disbursed.
• Entities that began production before December 31, 2021, and applied for incentives within the designated timeframe.

Application Process

To apply for the subsidy, enterprises must follow these steps:

• Submit an offline application in the prescribed format (Form-A2) along with necessary documents to the Directorate of Textiles after production begins.
• The first application must be submitted within 12 months from the date of starting commercial production (between January 1, 2022, and December 31, 2024).

Contact Information

Applications should be sent to:

Geographical Zones

The scheme categorizes regions into different zones, each eligible for varying subsidy rates:

For further details, visit the official website: myScheme.gov.in.