Gandhinagar, Oct 9 — The Gujarat government has introduced a five-year incentive scheme for micro, small and medium enterprises (MSMEs), offering assistance for capital investment, interest payments, electricity costs, employee provident fund contributions and technology adoption, including artificial intelligence (AI), under its 'Viksit Gujarat Industrial Policy-2026'.
Announced by the Industries and Mines Department under the leadership of Chief Minister Bhupendra Patel and Deputy Chief Minister Harsh Sanghavi, the Assistance Scheme for MSMEs came into effect on June 1, 2026. It will remain operational until May 31, 2031.
The scheme provides for a combination of incentives, with the maximum cumulative assistance capped at 45 per cent of eligible fixed capital investment (EFCI) in Category-A talukas and 35 per cent in Category-B areas.
For identified thrust sectors, the limits have been increased to 50 per cent and 45 per cent, respectively.
Under the scheme, eligible enterprises can receive interest assistance of seven per cent on term loans for five years, along with electricity tariff assistance of up to Rs 2 per unit in Category-A areas and Rs 1 per unit in Category-B areas for the same period.
Capital investment assistance in Category-A areas will be up to 35 per cent of eligible investment for micro enterprises, calculated based on expenditure disbursed in one year, and up to 35 per cent for small and medium enterprises over five years.
The corresponding rate in Category-B areas will be 25 per cent. Women entrepreneurs, registered manufacturing startups and first-generation entrepreneurs will be eligible for an additional one percentage point of interest assistance, within the prescribed limits.
Micro enterprises will receive higher annual incentive limits during their initial years. In Category-A areas, the limit will be up to 37 per cent in the first year, while in Category-B areas it will be up to 27 per cent.
The annual limit in subsequent years will be two per cent for both categories, with more favourable provisions for micro enterprises in identified thrust sectors.
To encourage employment generation, the scheme provides for reimbursement of up to 100 per cent of the employer's Employees' Provident Fund (EPF) contribution for newly recruited employees for five years.
The monthly reimbursement will be capped at the lower of 12 per cent of the employee's basic salary, dearness allowance and retaining allowance, or Rs 1,800 for male employees, Rs 2,500 for female employees and Rs 3,000 for employees with disabilities.
Additional employment generated through expansion or diversification will also qualify. The government has also earmarked assistance for quality certification, digital systems and technology acquisition.
Enterprises installing enterprise resource planning (ERP) systems will be eligible for assistance covering 65 per cent of capital expenditure, up to Rs 1 lakh.
For national and international quality certification, assistance of up to 50 per cent of certification fees and the cost of necessary testing equipment and machinery will be available, subject to a ceiling of Rs 10 lakh.
Assistance of up to Rs 50,000 will be provided for Zero Defect, Zero Effect (ZED) certification, covering up to 50 per cent of the charges remaining after central government assistance.
For information and communication technology infrastructure supporting Industry 4.0 and AI-based systems, eligible enterprises can receive up to 65 per cent of capital expenditure, capped at Rs 5 lakh.
Technology acquired from recognised institutions will attract assistance of up to 65 per cent, capped at Rs 50 lakh for general MSMEs and Rs 1 crore for enterprises in identified thrust sectors.
Patent registration will qualify for assistance of up to 75 per cent of expenditure, capped at Rs 25 lakh per applicant or enterprise.
In identified thrust sectors, support of up to 75 per cent, capped at Rs 1 crore, will cover intellectual property rights, including patents, designs, copyrights, trademarks and geographical indication registrations.
Micro enterprises and artisans in these sectors will also be eligible for reimbursement of up to 80 per cent of AI subscription fees, capped at Rs 1 lakh annually for three years.
For energy and water conservation, the scheme provides assistance of up to 75 per cent of the audit cost, capped at Rs 50,000 for each audit.
A one-time subsidy covering up to 25 per cent of the cost of equipment recommended by the auditor, capped at Rs 20 lakh, will also be available, subject to a minimum 10 per cent saving in energy or water consumption against the average monthly consumption recorded over the preceding 12 months.
MSMEs raising equity through an SME exchange under Securities and Exchange Board of India guidelines can receive one-time assistance covering up to 25 per cent of fundraising expenditure, capped at Rs 5 lakh.
Enterprises obtaining collateral-free term loans under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) framework will be eligible for reimbursement of up to 100 per cent of the annual service fee for five years.
Additional assistance will be available for eligible enterprises outside Gujarat Industrial Development Corporation (GIDC) estates or approved industrial parks.
The scheme provides for reimbursement of up to 35 per cent of charges paid to a distribution licensee for a new electricity connection, additional load or alteration of a connection or service line, capped at Rs 5 lakh.
MSMEs renting or leasing industrial sheds for manufacturing can receive assistance covering up to 65 per cent of rent paid, while enterprises wholly owned by women will be eligible for up to 75 per cent, subject to a maximum of Rs 3 lakh annually for five years.
Identified thrust sectors include sports equipment, toys, footwear, robots and drones. Eligible enterprises in these sectors will receive 100 per cent reimbursement of stamp duty and registration charges paid on the purchase or lease of land.
The package also provides for reimbursement of international certification fees up to Rs 5 crore, employee training assistance of up to Rs 8,000 per employee per month during the first 12 months, and support covering up to 50 per cent of the cost of establishing a creative design studio, capped at Rs 5 crore.
Enterprises availing benefits under the scheme must employ at least 85 per cent of their total workforce from among Gujarat residents.
At least 60 per cent of employees at managerial and supervisory levels must also be residents of the state. The scheme allows eligible asset purchases and payments made from January 1, 2026, to be considered, subject to prescribed conditions.
The eligible investment period will be 12 months from the Date of Commercial Production (DoCP) for plant and machinery investments of up to Rs 50 crore, and 18 months for investments exceeding Rs 50 crore and up to Rs 125 crore.