Icon MSME FAQs (Frequently Asked Questions)

MSME facilitation Desk is an initiative of Government of Gujarat. The desk is set up to provide hand holding
support, financial guidance, knowledge support and to assist the process of setting up a business unit till its
commissioning.

MSME is an abbreviation for Micro, small, Medium Enterprises (MSME). The classification of MSME is given in
the table below.

Hand Holding:

  • Investor facilitation / interaction
  • Guidance for filling forms, schemes, policies, incentives, etc.
  • Handling investors’ queries
  • Inter-departmental co-ordination

Financial Guidance:

  • Guidance for financial availability
  • Assistance for knowledge dissemination workshops / Seminars
  • Information related to financial incentives through government schemes

Knowledge Support:

  • Collaterals / brochures for the current policies & schemes
  • Rebates/ subsidies available from central & state government
  • Knowledge Repository

Assistance in setting up of Enterprise:

  • Assistance for setting up MSMEs
  • Sector specific knowledge & guidance
  • Guidance on government procedures / approvals / clearances

MSME is an abbreviation for Micro, small, Medium Enterprises (MSME). The classification of MSME is given in
the table below.

Manufacturing Sector
Enterprises Investment in plant & machinery
Micro Enterprises Up to Rs. 25 Lakh
Small Enterprises More than Rs. 25 lakh up to Rs. 5 crore
Medium Enterprises More than Rs. 5 crore up to Rs. 10 crore
Service Sector
Enterprises Investment in plant & machinery
Micro Enterprises Up to Rs. 10 Lakh
Small Enterprises More than Rs. 10 lakh up to Rs. 2 crore
Medium Enterprises More than Rs. 2 crore up to Rs. 5 crore

UAM also referred as ‘Udyog Adhaar Memorandum’ is a new initiative started in India (18-09-2015) that issues
unique identity number to MSMEs. The registration can be done through online Udyog Aadhaar (UA) Portal
(http://udyogaadhaar.gov.in) by enterprises located anywhere in the country. The process of obtaining Udyog
Aadhaar Number is free-of cost, paperless and results in instant registration.

MSME Registration has a range of benefits implemented as subsidies, schemes and incentives. Enterprises
registered with the MSMED Act (MSME Development Act) enjoy interest rate concession and their borrowing
is classified under Priority Sector Lending. Enterprises registered with the MSME act are also allowed to avail a
number of subsidies and schemes floated by the State and Central Government. Some of them include,
subsidy for ISO registration, subsidy for obtaining International patents, subsidy for participating in tradeshow,
subsidy for implementing barcode on Products, etc.

The registration of MSME can be done online at Udyog Aadhaar (UA) Portal (http://udyogaadhaar.gov.in). The
documents required for filling in the online form are

  • Aadhaar Card (Number and Name in the Aadhaar Card)
  • Name of the enterprise and the Address of the enterprises
  • Bank Account Number and IFSC Code
  • An email address

This scheme provides self-employment opportunity to educated unemployed and artisans. The scheme
provides loan for assistance for enterprise development and employment generation through individuals. The
maximum amount of loan available to an individual under this scheme is Rs. 8 lakh for Industry, Rs. 6 lakh for
services and Rs. 3 lakh for Business. Subsidy under this scheme ranges from 20% to 40% depending upon the
category of beneficiary. The upper limit of subsidy is Rs. 1,25,000 for Industry, Rs. 1,00,000 for Services and Rs.
80,000 for Business. At present, 395 project profiles are prepared for starting up small business under Shri
Vajpayee Bankable Yojana. The project profiles are available at
http://www.cottage.gujarat.gov.in/eng/?page_id=336

Age Limit: Age between 18 to 65 years.

Educational Qualification: Std. 4 Pass / have undergone training concerned business for about 3 months / One
year experience of concerned business/traditional artisan or having 1 month training in related business from
Government recognised institute.

Family Income: No income limit.

Financial assistance are provided under this scheme from 20% to 40%

  • For General Category, 20% subsidy in urban area and 25% in rural area with maximum subsidy up to Rs. 1.25 lakh for Industry, Rs. 1 Lakh for Service and Rs. 80,000 for Business.
  • For SC/ST/Ex-service Man/Woman/40% or more Blind or PH 30% subsidy in urban and 40% subsidy in rural area with maximum subsidy up to Rs. 1.25 lakh for Industry, Rs. 1 Lakh for Service and Rs. 80,000 for Business.

The maximum amount of loan available to an individual under this scheme is Rs. 8 lakh for Industry, Rs. 6 lakh
for services and Rs. 3 lakh for Business. Subsidy under this scheme ranges from 20% to 40% depending upon
the category of beneficiary. The upper limit of subsidy is Rs. 1,25,000 for Industry, Rs. 1,00,000 for Services and
Rs. 80,000 for Business.

The application form is available at Concerned District Industries Centre. It is also available online at

http://www.cottage.gujarat.gov.in/wp-content/uploads/2012/12/VBY.pdf

Prime Minister’s Employment Generation Programme (PMEGP) is a credit linked subsidy programme from
Central Govt. to generate employment opportunities, bring together widely dispersed traditional artisans,
increase the wage earning capacity of artisans and to provide continuous and sustainable employment to large
segment of traditional and prospective artisans.

  • Any individual, above 18 years of age
  • No income ceiling for assistance for setting up projects under PMEGP
  • For setting up of project costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business /service sector, the beneficiaries should possess at least VIII standard pass educational qualification.
  • Assistance under the Scheme is available only for new projects sanctioned specifically under the PMEGP.
  • Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme) are also eligible for assistance under PMEGP.
  • Institutions registered under Societies Registration Act,1860;
  • Production Co-operative Societies, and
  • Charitable Trusts.
  • Existing Units (under PMRY, REGP or any other scheme of Government of India or State Government) and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are not eligible.

Start Up / Innovation Scheme is a Govt. of Gujarat Scheme to facilitate innovative ideas till its development.
Under this scheme 18 Nodal institutes are selected for mentorship. Any individual/group of individuals can
apply under this scheme.

The support available is –

  • Institution will support to the innovator by providing mentor services
  • Institution will allow the innovator to use facilities available in the institution for start ups
  • Rs. 10000/- per month will be provided to the innovator as sustenance allowance for one year
  • Up to Rs. 10.00 Lakhs assistance will be provided for Cost of Raw Material/Components & other related equipment required for the innovative process for the new product development
  • Govt. will support selected innovator to get free access to University/Libraries/Govt. Laboratories/SDCs(GIDC)/CoE/PSUs to have more clarity on his innovative ideas/concept
  • Marketing/publicity assistance of up to Rs. 10.00 lakhs will be provided for the introduction of innovated product in the market
  • VAT incentives

All Petty Food Manufacturer whose annual turnover not exceeding Rs 12 lakhs and/or whose production
capacity of food (other than milk and milk products and meat and meat products) does not exceed 100 kg/ltr.
per day or procurement or handling and collection of milk up to 500 litres of milk per day or slaughtering

capacity is 2 large animals or 10 small animals or 50 poultry birds per day or less shall register their business as
per Form A of FSSAI. Form A is available at https://foodlicensing.fssai.gov.in/pdf/Form_A.pdf
For all other Food Manufacturer licence is mandatory in Form B. The Form B is available at
https://foodlicensing.fssai.gov.in/pdf/form_b.pdf

Several Govt. organizations require NSIC Registration apart from UAM (MSME Registration) to be eligible to bid
for tenders. This applies to MSMEs who are in manufacturing. Please refer the tender document for
documentation require for that particular tender.

Under the government stores Purchase Programme, Government of India has been extending various facilities
as given below to the SSI units registered with NSIC under its single Point registration scheme:

  • Issue of tender sets free of cost;
  • Exemption from payment of Earnest Money;
  • Waiver of Security Deposit up to the Monetary Limit for which at the unit is registered
  • Price Preference up to 15% over the quotation of large-scale units
  • In addition to the above, 358 items are also reserved for exclusive purchase from SSI sector. Recently 20 items are removed from the reservation list.

The capital investment subsidy for new enterprise in Municipal Corporation areas is 10% of term loan amount
disbursed by the bank/ Financial Institution with maximum amount of Rs.15 lakhs. Area Outside Municipal
Corporation, the subsidy is 15% of term loan amount disbursed by the bank/ Financial Institution maximum
amount of Rs.25 lakhs.

The interest subsidy is 5% on the outstanding amount maximum up to Rs. 25 lakh per year for new enterprise
in Municipal Corporation areas for five years. The interest subsidy for enterprises outside Municipal
Corporation is 7% on the outstanding amount maximum up to Rs. 30 lakh per year for five years.

The capital investment and interest subsidy can be applied online at the ifp.gujarat.gov.in You would require to
do the following: Create Login/Password> Add Project Detail> On project dashboard go to approvals> Select
subsidy

Centre for Entrepreneurship Development (CED) has training centres across state and provide courses of
varied duration. CED has training for both new as well as existing entrepreneurs. Entrepreneurial training is
also provided by MSME Development Institute at respective states.

The generalised steps are as follows: Draft a deed >Get the partnership deed notarized > Register your firm
(Optional)
Registration of a partnership firm is optional and can be done at Office of Registrar of Firm

No, office/land/shed can be anywhere in the state to qualify for GoG subsidy. The quantum of subsidy differ
when office/land/shed is in Municipal area vis-a-vis when it is outside Municipal area. Note that, for the
scheme for “Assistance in Rent to SMEs” the enterprise should be either in Industrial Estate or Commercial
Area.

The Micro Units Development & Refinance Agency (MUDRA) Ltd, is a financial institution being set up by
Government of India for development and refinancing micro units/enterprises. It was announced by the
Hon’ble Finance Minister while presenting the Union Budget for FY 2016. The purpose of MUDRA is to provide
funding to the non-corporate small business sector through various Last Mile Financial Institutions like Banks,
NBFCs and MFIs.
Under the aegis of Pradhan Mantri MUDRA Yojana (PMMY), MUDRA has already created its initial products /
schemes. The interventions have been named ‘Shishu’, ‘Kishor’ and ‘Tarun’ to signify the stage of growth /
development and funding needs of the beneficiary micro unit / entrepreneur and also to provide a reference
point for the next phase of graduation / growth to look forward to. The financial limit for these schemes are:-


a. Shishu: covering loans up to Rs. 50,000. This stage would cater to entrepreneurs who are either in their
primitive state or require lesser funds in order to get their businesses started. Under this state the applicant
would be eligible to get up to Rs. 50,000 credit.


b. Kishor: covering loans above Rs. 50,000 and up to Rs. 5 lakh. This stage would cater to entrepreneurs who
have already started their business and want additional funds to expand the business or those who simply
require this much of money to start up their business.


c. Tarun: covering loans above Rs. 5 lakh to Rs. 10 lakh. If an entrepreneur meets the required eligibility
conditions he/she could apply for a loan up to Rs. 10 lakh. This would be the highest level of amount that an
entrepreneur could apply for a start-up loan.

Any Indian Citizen who has a business plan for a non-farm income generating activity such as manufacturing,
processing, trading or service sector whose credit need is less than Rs. 10 lakh can approach either a Bank, MFI
or NBFC for availing of MUDRA loans under PMMY.

  • Individuals
  • Proprietary concern
  • Partnership Firm
  • Private Ltd. Company
  • Public Company
  • Any other legal forms

The applicant should not be defaulter to any bank or financial institution and should have a satisfactory credit
track record. The individual borrowers may be required to possess the necessary skills/experience/ knowledge
to undertake the proposed activity. The need for educational qualification, if any, need to be assessed based
on the nature of the proposed activity, and its requirement.