Dr.Babasaheb Ambedkar Udyog Uday Yojana: Assistance for Interest Subsidy (Service Sector)
8% interest subsidy up to ₹35L/year · SC/ST service sector MSMEs · Gujarat 7 years
Dr. Babasaheb Ambedkar Udyog Uday Yojana provides SC/ST-owned service sector MSMEs in Gujarat an interest subsidy of up to 8% on term loans (max ₹35 lakh/year) — helping new service businesses reduce their loan repayment burden.
About This Scheme
Dr. Babasaheb Ambedkar Udyog Uday Yojana provides SC/ST-owned service sector MSMEs in Gujarat an interest subsidy of up to 8% on term loans (max ₹35 lakh/year) — helping new service businesses reduce their loan repayment burden.
Full official description
The scheme "Dr.Babasaheb Ambedkar Udyog Uday Yojana" is an umbrella scheme launched by the Industries and Mines Department, Gujarat. It aims to empower the state's dynamic MSME sector, which significantly contributes to employment, GDP, and exports. Effective from August 7th, 2020 to August 6th, 2025, this initiative supports SC/ST entrepreneurs and strengthens MSMEs, making them globally competitive. The component "Assistance for Interest Subsidy (Service Sector)" provides an interest subsidy on the term loan to support micro-enterprises in the service sector.
Benefits
Interest subsidy on term loans (SC/ST service sector MSMEs):
| Taluka Category | Subsidy Rate | Max per year | Duration |
|---|---|---|---|
| Category I | 8% | ₹35,00,000 | 7 years |
| Category II | 6% | ₹30,00,000 | 6 years |
| Category III | 5% | ₹25,00,000 | 5 years |
💡 Why Startups Should Care
Service-sector businesses — consultancies, IT firms, logistics — rarely get manufacturing-style capital subsidies, but this scheme's 8% interest subsidy applies equally to services. For an SC/ST founder running a service business with a term loan, that's real savings on working capital cost.
Who Can Apply (Eligibility)
MSME in the service sector owned and run by SC/ST entrepreneur, as per Annexure A and B of the scheme. New unit in Gujarat that has commenced commercial operations.
Exclusions
- Not available if the term loan is sanctioned more than one year after commencement of commercial production
- Not available to enterprises defaulting on loan repayment
How to Apply
- Visit ifp.gujarat.gov.in/DIGIGOV/ and register as a new investor.
- Log in and select this scheme under Dr. Babasaheb Ambedkar Udyog Uday Yojana.
- Fill in enterprise, investment, and banking details.
- Upload the signed application form, Udyog Aadhaar/Udyam certificate, and supporting documents.
- Submit and note your Reference Number for tracking.
Frequently Asked Questions
What is the "Dr. Babasaheb Ambedkar Udyog Uday Yojana"?
It is a special scheme introduced under the Industrial Policy 2020 to provide financial assistance and support to Scheduled Caste (SC) and Scheduled Tribe (ST) entrepreneurs in the MSME sector.
What sectors are prioritized under the Industrial Policy 2020?
The policy prioritizes industries such as Auto and Auto Components, Chemicals and Petrochemicals, Pharmaceuticals, Cement, Textiles, Engineering, Gems and Jewellery, and Ceramics.
How does the scheme promote export competitiveness?
The scheme emphasizes "Vocal for Local to become Global," strengthening integrated value chains and encouraging MSMEs to enhance their export potential.
What is the duration of the scheme?
The scheme is effective from August 7, 2020, and will remain in operation until August 6, 2025.
Who is eligible to apply for the interest subsidy scheme?
Only new MSMEs in the service sector, as listed in Annexure A and B, are eligible to apply for the interest subsidy scheme.
What type of expenses are covered under the subsidy?
The subsidy covers interest on term loans taken for new machinery, equipment, and furniture/fixtures, excluding land and building.
What is the maximum subsidy amount an enterprise can receive?
The maximum subsidy amount depends on the Taluka category: Category I: Up to [?]35,00,000/- per annum for 7 years. Category II: Up to [?]30,00,000/- per annum for 6 years. Category III & Municipal Corporation Areas: Up to [?]25,00,000/- per annum for 5 years.
Is there any additional benefit for startups?
Yes, registered startups in the service sector with Udyam/MSME registration receive an additional 1% interest subsidy.
Can an enterprise apply for the subsidy if it has already started commercial production?
No, the application must be submitted within one year from the date of loan disbursement or before the commencement of commercial production, whichever is later.
Can an enterprise avail of subsidies from both the Central and State Government?
Yes, an enterprise can avail of both subsidies; however, the total subsidy amount from both sources cannot exceed the total interest paid to the bank or financial institution.
What happens if an enterprise defaults on loan repayment?
If an enterprise defaults on loan repayment as per RBI guidelines, the interest subsidy will not be provided for the default period.
Is there any penalty for late submission of the application?
Yes, late applications will be considered with deductions for the late period from the maximum permissible subsidy.
Is MSME/Udyam registration mandatory for availing the subsidy?
Yes, an enterprise must have MSME/Udyam registration to be eligible for the interest subsidy scheme.
Can an existing business apply for this scheme?
No, only new MSMEs in the service sector are eligible to apply under this scheme.
Will the interest subsidy cover penal interest or other bank charges?
No, the interest subsidy will only cover the standard interest on the term loan and will not include penal interest or any additional bank charges.
When will the subsidy amount be reimbursed?
The subsidy will be reimbursed only after the enterprise has commenced commercial production or started providing services.
Ready to apply?
Visit the official government portal to apply for this scheme.
Apply on myScheme.gov.inDocuments Required
- Printed application form with declaration (signed by authorised person with stamp)
- Copy of Udyog Aadhaar / Udyam registration certificate
- Term loan sanction letter
- Bank statement / repayment schedule
- CA certificate for fixed capital investment
- Constitution of enterprise