Maharashtra Subsidy & Schemes for MSMEs

The Maharashtra Government provides assistance to entrepreneurs and small scale industries through various subsidies and schemes operated by state government departments or corporations. In this article, we cover three schemes operated by the Maharashtra State, Directorate of Industries namely the Prime Minister’s Employment Generation Programme (PMEGP), Seed Money Scheme (SMS) and District Industries Center Loan Scheme.

Prime Minister’s Employment Generation Programme

Under the Prime Minister’s Employment Generation Programme, manufacturing project with an investment of upto Rs.25 lakhs and service projects with an investment of upto Rs.10 lakhs are provided financial assistance as loans from public sector banks, regional rural banks or IDBI. Upto 90% of project cost is provided as loan for most entrepreneurs and entrepreneurs who are SC/ST/OBC/minority/woman/ex-servicemen/physically handicapped are provided loan of upto 95% of project cost. Project cost will include capital asset cost + working capital. Any individual above the age of 18 years is eligible for this scheme, provided they have atleast passed class VIII standard.

Seed Money Scheme (SMS)

Equity or seed money is provided in the form of soft loans to encourage unemployed persons to become entrepreneurs and meet part of the margin money requirement for availing bank loan. To be eligible for this scheme, an un-employed entrepreneur must have plans for establishing an industry or service business with a project cost of upto Rs.25 lakhs in the state of Maharashtra. In such cases, seed money assistance of 15% of project cost for all Entrepreneurs and seed money assistance of 20% of project cost for Entrepreneurs who are SC/ST or OBT/NT/VT/Handicapped is provided. The maximum amount of seed money provided is Rs.3.75 lakhs and the rate of interest on the seed money extended is 6% per annum with a holiday period of 3 years. To be eligible for availing seed capital under this scheme, the entrepreneur must be unemployed, domiciled in the state of Maharashtra for the last 15 years, between the age group of 18 to 50 years and passed atleast class VII.

District Industries Centre Loan Scheme

The District Industries Center Loan Scheme provides financial assistance in the form of margin/seed money for the promotion of tiny industries in semi-urban and rural areas with a view to generate employment opportunities including self employment. Under this scheme, margin money is provided for those units where investment in plant and machinery does not exceed Rs.2 lakhs. All towns and rural areas having population of less than 1 lac are covered under the Scheme. Assistance of upto 20% of the total investment or a maximum of Rs.40,000 is provided to Entrepreneurs belonging to the general category. In case of entrepreneur belonging to scheduled caste & scheduled tribe, assistance of upto 30 % of total fixed capital investment or a maximum of Rs. 60000/- is provided. The assistance provided in the form of loan must be repaid back to the State Government with a 4% interest rate within 7 years.

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