Aatmanirbhar Gujarat Scheme for Assistance to MSMEs: Rehabilitation of Sick Enterprise

What is the Rehabilitation of Sick Enterprise scheme in Gujarat?

The Aatmanirbhar Gujarat Scheme for Assistance to MSMEs is an umbrella package of incentives notified by the Industries and Mines Department, Government of Gujarat, and administered through the MSME Commissionerate and the District Industries Centres. Its "Rehabilitation of Sick Enterprise" component is aimed at one narrow but important problem: a micro, small or medium enterprise that has slipped into sickness usually cannot afford the professional study that a bank will demand before it agrees to any restructuring.

The Rehabilitation of Sick Enterprise component therefore reimburses 50% of the cost of preparing the draft rehabilitation scheme, up to Rs 1,00,000 during the operative period of the scheme. The expenditure covered is the fee of the expert or expert agency that prepares the diagnostic study report and the rehabilitation plan.

The Aatmanirbhar Gujarat MSME scheme is operative from 5 October 2022 to 4 October 2027. The parent Government Resolution and the guidelines are published by the MSME Commissionerate and mirrored on the Industries Commissionerate website.

Two things about this component are widely misunderstood, and both are stated in the scheme's own material. First, it is a reimbursement of a professional fee, not a rescue package: no working capital, no debt waiver and no one-time settlement flows from it. Second, registration as a sick unit is a certification, not an entitlement. The MSME Commissionerate certifies that the enterprise meets the RBI criteria for sickness, which helps in dealings with lenders, but the certificate alone does not release state money.

Who is eligible for the sick enterprise rehabilitation assistance?

An enterprise qualifies if:

• It is a micro, small or medium enterprise as classified under the MSMED framework.
• It holds an acknowledgement or registration from the Ministry of MSME (Udyam Registration or the earlier EM Part-II) or from the Department for Promotion of Industry and Internal Trade, as applicable.
• It is a new manufacturing enterprise, or an existing enterprise undertaking expansion or diversification, that commenced commercial production during the operative period of 5 October 2022 to 4 October 2027.
• It is classified as a sick industrial enterprise as per Reserve Bank of India guidelines, supported by a Chartered Accountant certificate and the last three years of audited accounts.
• The diagnostic report is prepared by a recognised expert or expert agency, on the recommendation of a government department, bank or financial institution.
• The application is submitted during the operative period of the scheme.

Who cannot apply:

• Individuals and households are not eligible. This is an enterprise incentive; there is no personal benefit inside it.
• Enterprises without MSME or DPIIT registration cannot apply, however small or genuinely distressed they may be.
• Trading and pure service units fall outside the manufacturing focus of the component.
• Enterprises that do not meet the RBI sickness test are not eligible, even if they are running at a loss in a given year. Losses alone are not sickness.
• Expenditure incurred before the operative period is not reimbursable, so a study commissioned and paid for before 5 October 2022 cannot be claimed.
• An enterprise cannot claim more than Rs 1,00,000 in total under this component during the whole operative period.

What documents are required?

The documents fall into two bundles. The first bundle establishes that the enterprise is genuinely sick and is used for general purpose registration. The second bundle establishes the cost of the diagnostic study and is used for the claim.

How to apply for the Rehabilitation of Sick Enterprise assistance

1. Get the sickness assessed. Compile the last three years of audited balance sheets and profit and loss accounts, and obtain a Chartered Accountant certificate confirming that the enterprise meets the RBI guidelines for a sick MSME.
2. Apply to the MSME Commissionerate for sick-unit registration, submitting the constitution documents, Udyam Registration or EM Part-II, and the audited accounts. The Commissionerate scrutinises the balance sheets and issues the registration if the criteria are met.
3. Get a written recommendation from the government department, bank or financial institution asking for a diagnostic study report for rehabilitation of the enterprise.
4. Engage a recognised expert or expert agency, obtain a confirmation letter stating the cost of preparing the report, and keep the payment receipt.
5. Register on the Investor Facilitation Portal. Visit ifp.gujarat.gov.in, click New Investor Registration, complete and submit the form, and verify the email link sent to your registered address.
6. Log in and file the claim with the completed diagnostic study report, the recommendation letter, the cost confirmation and the payment receipt attached.
7. Follow up with the District Industries Centre handling your district for scrutiny queries, and keep the acknowledgement number safe for status checks.

How to apply offline

1. Collect the prescribed application form from the District Industries Centre or download it from the Industries Commissionerate website.
2. Attach the general-purpose registration bundle and the diagnostic study bundle, each page signed by the authorised signatory.
3. Submit the file at the District Industries Centre for your district, or at the Office of the MSME Commissioner, Gandhinagar, and collect the acknowledgement.

Offline submission remains available where an online module is not yet operational for a given component, and such applications are processed offline.

How to check the status of a sick enterprise application

1. Log in to the Investor Facilitation Portal at ifp.gujarat.gov.in with the email and password used at registration.
2. Open the application dashboard, where the status of each submitted application under the Aatmanirbhar Gujarat schemes is listed.
3. For offline files, contact the District Industries Centre where the papers were lodged, quoting the acknowledgement number.
4. For portal problems, call the IFP toll-free helpline 1800 233 1847 between 10:30 AM and 6:10 PM on working days.

Why applications get rejected, and how to avoid it

• Sickness not established under RBI criteria. A loss-making year is not enough. The Chartered Accountant certificate must map the enterprise's position onto the RBI guideline.
• No recommendation letter. The scheme requires that the diagnostic study was recommended by a government department, bank or financial institution; a self-commissioned study without that letter is queried.
• Expenditure outside the operative period. Invoices and receipts dated before 5 October 2022 are not reimbursable.
• Missing Udyam Registration, or a Udyam record whose details do not match the applicant enterprise's PAN and constitution documents.
• Incomplete audited accounts. All three years must be filed; a gap year stops the scrutiny.
• Claiming more than the ceiling. The reimbursement is capped at 50% of the cost and at Rs 1,00,000 in total; the balance stays with the enterprise.

What this scheme does not do

The Rehabilitation of Sick Enterprise component sits alongside other MSME components of the Aatmanirbhar Gujarat package — capital subsidy, interest subsidy, quality certification support, technology acquisition support and assistance for saving energy and water. None of them, including this one, is a debt-relief instrument. If an enterprise needs restructuring of its bank liabilities, that is decided by the lender under RBI's own framework for revival and rehabilitation of MSMEs; what the Gujarat scheme does is pay half the professional bill, up to Rs 1,00,000, for the document that process needs.

Help and grievance redressal

• Investor Facilitation Portal helpline: 1800 233 1847, 10:30 AM to 6:10 PM on working days.
• Industries Commissionerate, Udyog Bhavan, Gandhinagar: 079-23252683 / 079-23252617.
• MSME Commissionerate, Gandhinagar: scheme pages, Government Resolutions and guidelines are published at msmec.gujarat.gov.in.
• District Industries Centre: the first point of contact for scrutiny of a district-level file; the district-wise list is on the MSME Commissionerate website.

No fee is payable to any agent for filing under this scheme, and the application forms, checklists and Government Resolution are downloadable free from the Industries Commissionerate and MSME Commissionerate websites.