Gujarat State Business & Entrepreneurship

Dr.Babasaheb Ambedkar Udyog Uday Yojana: Assistance for Interest Subsidy (Service Sector)

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.

Industries and Mines Department For: Infra Official Source

About This Scheme

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

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

Enterprises whose term loan is sanctioned after one year from the commencement of commercial production.
Enterprises defaulting on loan repayments as per RBI and bank guidelines.
Enterprises seeking reimbursement for penal interest or other bank charges.
Enterprises availing interest subsidy under any Central Government scheme where the total subsidy exceeds the total interest paid.

How to Apply

Online

Registration Process:

Step-1: Visit the Investor Facilitation Portal (IFP) portal. Click on "New Investor Registration" to access the registration form. Step-2: Fill in the Registration Form. Click on "Submit". Step-3: Verify the E-mail ID using the link sent on your registered E-mail ID. Step-4: After verification, you will be registered successfully.

Post-Registration Process:

Step-1: Visit the Investor Facilitation Portal (IFP) portal. Click on "Login". Step-2: Enter the email address and password you used during registration. Step-3: Click the "Login" button to access your account. Step-4: Now fill in the required details and mandatory documents about your business to complete the application process.

Helpdesk: Contact

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.in

Documents Required

Printed copy of the application along with declaration and undertaking in the application form signed by an authorized person, including their designation and name with the enterprise's stamp.
Copy of acknowledgment of Udyog Aadhaar / Udyam Registration.
Copy of term loan sanction letter.
Copy of term loan account statement / bank certification of first disbursement certificate.
Copy of the constitution of the enterprise (registered partnership deed for partnerships).
Copy of DPR of the enterprise (for projects up to ₹5 crores); for projects above ₹5 crores, DIC will ask for a bank appraisal report.
Shop & Establishment Certificate (for service sector enterprises in municipal corporations).
Copy of GST registration (if applicable).
Copy of PAN card of the enterprise.
Copy of ITR for the last financial year showing plant & machinery value (new enterprises must submit a self-declaration for the first time).
Copy of birth certificate/school leaving certificate (for entrepreneurs under 35 years as of the bank loan sanction date).
Copy of caste certificate from a competent authority.
Copy of certificate for differently abled persons from a competent authority.
Copy of CTE issued by the GPCB (if applicable).
Self-certified/certified copy of documents such as 7/12 Utara, Namuna 6, copy of index, property card, etc. (any one).
NA permission (if applicable).
Copy of notarized rent deed (agreement) with the owner's proof/affidavit for ownership of land/property.
Copy of lease deed (agreement) with the owner's proof of ownership of land/property.
Copy of the property tax receipt (for service activities).
Board resolution for signing authority (in case of partnerships, LLPs, Pvt. Ltd., or Limited Companies).
Declaration and undertaking regarding other investments in Gujarat.
Annexure of the balance sheet showing the gross fixed capital investment of the previous financial year.
CA certificate showing the gross fixed capital investment before initiating expansion/diversification/forward or backward integration.