Investment Promotion Scheme (IPS) For Cottage Industries: Financial Assistance To Cottage Industries

Description
The scheme “Financial Assistance To Cottage Industries” is a sub scheme under the “Investment Promotion Scheme IPS ” for Cottage Industries. It was launched on 3rd July, 2015 for a period of five years by the Dept. of Industries, U.T. Administration Of Dadra & Nagar Haveli And Daman & Diu. Now it has been extended further from 20th May, 2022 and shall be operative till 19th May, 2027. Objective of the "Investment Promotion Scheme IPS ”: The scheme envisages to provide incentives and assistance to the MSME Sector in order to nurture them and protect them from market vagaries thereby making them vibrant and successful. therefore making the U.T. a Special Hub for the MSME sector; maximize Women participation in the business sector, reduce unemployment among the local residents and incentivize the industries to employ resident laborers etc. Objective of the "Financial Assistance To Cottage Industries" Sub-scheme: Under this scheme, financial assistance shall be provided to Cottage Industries on the term loan taken through Nationalized Banks, Cooperative banks, Public sector Banks or Private Banks.

Exclusions
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Benefits
• **Rate of Capital Subsidy:** 25% of the term loan amount for setting up of the Cottage Industry up to a maximum of ₹5,00,000/-.
• **Rate of Interest Subsidy:** 50% of the Interest charged by Bank or NBFC or Cooperative Bank shall be reimbursed up to a period of 5 years from the date of commencement of Production.
• **Note:**
• 10% additional capital subsidy shall be provided to Scheduled Castes/ Scheduled Tribes / Women/ Differently abled having 30% or more disability.
• Maximum limit of the Bank Loan should be ₹20,00,000/-.

Eligibility Criteria
1. - The applicant should be associated with Cottage Industry.
2. - The applicant should be above 18 years of age.
3. - The applicant should have passed minimum standard Four (IV).
4. - The applicant should have undergone training for minimum one month from Government of India recognized Institutes, in the area of the proposed business.
5. Or,
6. The applicant should have experience of minimum 1 year in the same activity
7. Or
8. The applicant should be hereditary craftsperson.

Required Documents
• Corporate Identification Number (CIN) Document.
• Taxpayer Identification Number (TIN) Document.
• Permanent Account Number (PAN) Document.*
• Goods and Services Tax Number (GST) Document.
• Other Registrations Document.
• Copy of Udyam Registration /Industrial Entrepreneur Memorandum, as applicable.
• Copy of Partnership Deed and Firm Registration Certificate in case of partnership concern or Memorandum & Articles of Association and Date of Incorporation Certificate in case of Public/Private Limited companies.
• Copy of land purchase deed duly signed by the applicant (If the Enterprise is functioning in its own land).
• Copy of registered lease agreement for a minimum period of 5 years from the date of commencement of commercial production (If the Enterprise is functioning in a leased land/ building).
• Copy of sanction order from Electricity Department for power supply with copy of the latest bill.
• Authorization letter.
• Copy of Consent to Operate / Renewal from PCC, DNH & DD (as applicable for Notification No. PCC/DMN/13(PART VI)/2020-21/448 DATED 25/01/2021).
• Copy of Factory licensee.
• Undertaking.
• Any other document as required.

Frequently Asked Questions
Q: What is the definition of Cottage Industry?
A: Cottage industry is a business or manufacturing activity carried on in people's homes at very low scales as a small-scale, unorganized/ decentralized manufacturing business using simple hand-operated tools. Examples include Smithy, Carpentry, weaving, Pottery, Blanket making, Stone Carving, Textiles, Ceramics, Handmade Jewelry, etc.

Q: What does the scheme provide?
A: The scheme provides financial assistance to Cottage Industries through term loans taken from Nationalized Banks, Cooperative Banks, Public Sector Banks, or Private Banks.

Q: What is the maximum limit for the bank loan?
A: The maximum limit for the bank loan is [?]20,00,000/-.

Q: What is the rate of capital subsidy?
A: Beneficiaries can avail a maximum subsidy of 25% of the term loan amount for setting up the Cottage Industry, up to a maximum of [?]5,00,000/-.

Q: Is there any additional subsidy for specific groups?
A: Yes, an additional 10% subsidy is provided to Scheduled Castes, Scheduled Tribes, Women, and Differently abled individuals with 30% or more disability.

Q: What is the rate of capital subsidy?
A: Beneficiaries can avail a maximum subsidy of 25% of the term loan amount for setting up the Cottage Industry, up to a maximum of [?]5,00,000/-.

Q: Is there any age limit for the applicant?
A: Yes, the applicant must be above 18 years of age.

Q: What measures are in place to prevent misuse of the subsidy scheme?
A: Strict guidelines, documentation requirements, and verification procedures are in place to ensure that subsidies are availed by eligible enterprises for genuine purposes only.

Q: What is the operative period of the scheme?
A: The operative period of scheme is from 20.05.2022 till 5 years that is 19.05.2027.

Q: If an enterprise is established in 2023 and becomes eligible for the scheme what would be the time period in which benefits are applicable?
A: The enterprise can avail benefit commencing from date of production till 5 years even if that period falls beyond operative period.

Q: How can an eligible unit apply to get the benefits of the scheme?
A: The eligible unit can apply by visiting single window portal website which is "swp.dddgov.in", and once page pops-up the user have to go to departments tab and select district industries tab under which the user have to click on apply for investment promotion scheme: 2022 to 2027.