Dr.Babasaheb Ambedkar Udyog Uday Yojana: Assistance for Interest Subsidy (Manufacturing Sector)
8% interest subsidy up to ₹35L/year · SC/ST manufacturing MSMEs · Gujarat 7 years
Dr. Babasaheb Ambedkar Udyog Uday Yojana gives SC/ST-owned manufacturing MSMEs in Gujarat an interest subsidy of up to 8% on term loans (max ₹35 lakh/year for 7 years) — significantly cutting borrowing costs for new factories in priority talukas.
About This Scheme
Dr. Babasaheb Ambedkar Udyog Uday Yojana gives SC/ST-owned manufacturing MSMEs in Gujarat an interest subsidy of up to 8% on term loans (max ₹35 lakh/year for 7 years) — significantly cutting borrowing costs for new factories in priority talukas.
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 (Manufacturing Sector)" provides financial relief to enterprises in the manufacturing sector by offering an interest subsidy on term loans. Additional benefits are available for women entrepreneurs, differently-abled entrepreneurs, startups, and young entrepreneurs below 35 years of age.
Benefits
Interest subsidy on term loans (SC/ST manufacturing 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
At 8% interest subsidy — even higher than the general MSME scheme's 7% — this is Gujarat's strongest incentive for SC/ST manufacturers. On a ₹1 crore term loan in a Category 1 taluka, that's ₹8 lakh back annually for 7 years, nearly ₹56 lakh in total support.
Who Can Apply (Eligibility)
MSME owned and run by SC/ST entrepreneur, engaged in manufacturing, located in Gujarat. New unit must have commenced commercial production after the scheme's start date.
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 click "New Investor Registration".
- Complete registration and log in.
- 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 — reimbursement follows after verification.
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.
What is the objective of the component "Assistance for Interest Subsidy (Manufacturing Sector)"?
The component "Assistance for Interest Subsidy (Manufacturing Sector)" provides financial support to enterprises in the manufacturing sector by subsidizing the interest on term loans.
Who is eligible to apply for the interest subsidy?
Enterprises engaged in the manufacturing sector with a valid term loan sanctioned before the commencement of commercial production are eligible to apply.
What is the maximum interest subsidy that an enterprise can receive?
The maximum interest subsidy an enterprise can receive is 8% for Category I Taluka, 7% for Category II Taluka, and 6% for Category III Taluka, including additional benefits.
For how many years will the interest subsidy be provided?
The subsidy will be provided for a period of 5 to 7 years, depending on the category of the taluka where the enterprise is located.
Can an existing manufacturing enterprise apply for the subsidy?
Yes, an existing enterprise can apply, provided it meets the eligibility criteria and has a valid term loan sanctioned before commercial production starts.
What is the minimum interest an enterprise has to bear?
Every enterprise must bear a minimum of 2% interest on the term loan, regardless of the subsidy received.
Can an enterprise apply for the subsidy after starting commercial production?
An enterprise can apply within one year from the first loan disbursement or before commercial production begins, whichever is later.
Can an enterprise avail both State and Central Government interest subsidies?
Yes, but the total interest subsidy from both the State and Central Government cannot exceed the total interest paid to the financial institution.
What happens if an enterprise defaults on loan repayment?
If an enterprise defaults on loan repayment, the default period will be deducted from the subsidy calculation, and the enterprise may lose eligibility.
Can an enterprise receive interest subsidy for installing a solar or renewable energy system?
Yes, existing enterprises that install solar or other renewable energy systems for captive consumption are eligible for an additional interest subsidy.
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