Investment Promotion Scheme (IPS) 2022 — Industrial Subsidy Scheme of Dadra and Nagar Haveli and Daman and Diu

What is the DNH industrial subsidy scheme?

Investment Promotion Scheme (IPS) 2022 is the industrial subsidy scheme of the U.T. Administration of Dadra and Nagar Haveli and Daman and Diu, run by the Department of Industries through the District Industries Centres. It was notified on 7 May 2022 under order No. DIC/5(519)/IPS-2021/2021/316 and published in the Official Gazette of DNH and DD, Series II No. 19, dated 20 May 2022. It is the successor to the Investment Promotion Scheme 2015, which had been in force since 3 July 2015, and it is the scheme people in Silvassa and Daman usually mean when they talk about the "DNH industrial subsidy scheme".

According to the gazette notification, the U.T. Administration has been providing incentives and assistance to new industrial units and to the expansion, diversification and modernisation of existing units in the MSME and textile sectors, as well as for skill development of the industrial workforce. IPS 2022 carries that forward and adds a set of thrust sectors; furniture, marble, IT and ITeS, electric vehicles and spare parts, toys and semi-conductors, medical equipment and accessories, medical diagnostics and AYUSH products, vaccine manufacturing, food processing and marine products.

Structure of the scheme

How much subsidy does IPS 2022 give?

Capital investment subsidy (Scheme A.1). Capital investment subsidy is paid at 15% of the investment made in gross fixed capital investment (GFCI), with an upper ceiling of Rs 15 lakh for micro industries, Rs 30 lakh for small industries and Rs 35 lakh for medium industries. Where the eligible GFCI exceeds Rs 10 crore, an additional Rs 10 lakh is given. First-generation women and differently abled entrepreneurs setting up new units get an additional subsidy equal to 10% of GFCI, capped at Rs 15 lakh.

Interest subsidy (Scheme A.2). Interest subsidy runs at 50% of the interest charged by the bank, with an upper ceiling of Rs 30 lakh a year for 5 years or the loan repayment period, whichever is earlier. A further 10% is added for differently abled entrepreneurs, women entrepreneurs and registered start-ups, and another 10% for young entrepreneurs below 35 years on the date of the term loan sanction. The eligible enterprise must itself bear a minimum of 2% of the interest levied.

Stamp duty reimbursement (Scheme D.1). Stamp duty paid on acquiring land is reimbursed at 50% for the MSME sector, 25% for units other than MSMEs and 100% for industrial complexes dedicated only to thrust-sector units. Units located inside industrial parks get 50% of the stamp duty paid on the plot. Reimbursement follows the purchase of the total required land and development of at least 25% of the infrastructure.

Other Scheme A incentives, each with its own ceiling, include quality certification (up to Rs 10 lakh), patent and trade mark registration (up to Rs 25 lakh per applicant, with attorney fees capped at Rs 50,000 for domestic and Rs 2 lakh per country for international patents), ZED certification (up to Rs 1 lakh), energy and water saving measures (Rs 1 lakh for the audit, up to Rs 20 lakh one-time assistance), skill development (75% of course fee up to Rs 1,50,000 per course for up to 20 persons), raising capital through the SME Exchange (up to Rs 5 lakh), incentives for doubling export values (up to Rs 20 lakh, and Rs 30 lakh in the higher slab), FOB reimbursement (20% of FOB value up to Rs 20 lakh), solar power capital investment (up to Rs 50 lakh), participation in industrial exhibitions abroad (50% of space rent up to Rs 2 lakh), local employment (a one-time Rs 3 lakh per 20 local persons with a U.T. domicile certificate, up to Rs 15 lakh per unit) and MSME awards of Rs 2 lakh with a trophy.

Scheme D.2 gives up to Rs 30 lakh or 25% of capital cost, whichever is less, for a Zero Liquid Discharge facility or hazardous waste treatment, storage and disposal facility.

Scheme E, for artisans, gives a handloom or handicraft artisan 50% subsidy on machinery up to Rs 2 lakh and 50% on a working capital loan up to Rs 2 lakh, with an extra 10% for SC, ST, women and persons with 30% or more disability. Cottage industries get 25% capital subsidy on a term loan up to Rs 5 lakh against a maximum bank loan of Rs 20 lakh, plus 50% interest subsidy for five years. Scheme E.2 provides toolkits, costed between Rs 10,000 and Rs 50,000, to persons in 27 listed trades; masonry, tailoring, pottery, plumbing, welding, carpentry, mobile repairing and others; whose annual income is up to Rs 2 lakh in rural areas and Rs 2.5 lakh in urban areas.

Who is eligible for IPS 2022?

Your unit can apply if:

• It is a new manufacturing or service unit, or an existing unit undertaking expansion or diversification.
• It commences commercial production during the operative period of the scheme.
• It is located in the U.T. of Dadra and Nagar Haveli and Daman and Diu.
• For MSME incentives, it holds an Udyam Registration acknowledgement.
• For the artisan schemes, the applicant is above 18 and, for cottage industries, has passed at least standard four and has one month's training from a Government of India recognised institute, one year's experience, or hereditary craft skills.

Your unit is not eligible, and cannot apply, if:

• It has bought second-hand machinery. The FAQ states only new machinery qualifies, though existing second-hand machinery may count towards the expansion criterion.
• The term loan was sanctioned more than one year after commercial production began.
• The application is made more than one year after the first loan disbursement or the start of commercial production, whichever is later.
• It has already availed a similar incentive under another U.T. Administration scheme. A similar incentive from a central government scheme is allowed, subject to the 35% cap.
• It cannot remain in production for 5 years from commercial production — the subsidy is then recovered as arrears of land revenue.
• It does not operate pollution control measures approved by the competent authority.
• An individual seeking a personal welfare benefit: IPS 2022 is an enterprise incentive scheme, not a personal entitlement.

How to apply for the IPS 2022 industrial subsidy

1. Set up the unit and obtain Udyam Registration, then start commercial production in the union territory during the operative period.
2. Open swp.dddgov.in, the Single Window Portal of the Department of Industries, and register or log in as an investor.
3. Go to the Departments tab, select District Industries Centre, and click Apply for Investment Promotion Scheme: 2022 to 2027.
4. Fill the application and upload the supporting documents: Udyam Registration, the term loan sanction letter, CA-certified bills of investment, the Chartered Engineer certificate where building, self-fabricated machinery or solar claims are involved, proof of commencement of commercial production, and the list of persons employed.
5. Submit within one year of the first disbursement of the loan or one year of commencing commercial production, whichever is later.
6. Cooperate with the District Industries Centre during scrutiny, which includes a physical verification of the enterprise and its fixed assets at site.
7. Track the sanction. The DIC places the proposal before the Investment Promotion Council, which grants in-principle clearance; after the approval of the Secretary (Industries), the General Manager, DIC issues the sanction order.

How is the money paid?

The eligible subsidy amount is credited by RTGS or NEFT into the loan or cash credit account of the applicant after the Secretary (Industries) approves it. Interest subsidy is credited to the bank or financial institution every six months of the financial year, on 30 September and 31 March. Capital investment subsidy is paid only after commercial production has commenced.

Key dates

• 20 May 2022, notification published in the Official Gazette; the operative period begins.
• 19 May 2027, end of the five-year operative period, confirmed in the Department's own FAQ document.
• A unit established during the period can continue to draw benefits for five years from its date of production even if that runs beyond 19 May 2027.
• Units eligible under IPS 2015 had to apply within 2 months of the IPS 2022 notification to claim under the earlier scheme.

Common reasons claims fail, and the fix

• Late application. The one-year window is strict, and the gazette states an application submitted after one year is not entitled to capital subsidy. Diary the date of first disbursement.
• Second-hand plant claimed. Only new machinery qualifies.
• Bills not CA-certified. The enterprise must furnish Chartered Accountant certified bills.
• Combined subsidy over 35% of GFCI. File the affidavit and reduce the claim to fit the cap.
• Default on the term loan. The default period is deducted from the interest subsidy, though a moratorium period is not treated as default.
• Annual returns not filed. The unit must give production and employment information to the General Manager, DIC within 60 days of the close of each financial year, and thrust-sector units before the end of September each year.
• Local employees retrenched after claiming the employment incentive without the Industries Department's permission, which triggers recovery.

Grievance redressal and contact

The gazette names the grievance contact directly:

• General Manager, District Industries Centre, Department of Industries
• Email: dic-dnh@nic.in
• Phone: 0260-2643122 and 0260-2642367

The Single Window Portal at swp.dddgov.in also carries a query and grievance redressal facility with online tracking, and an Investor Facilitation Centre whose working procedure is published on the same portal. The U.T. Administration reserves the right to change, withdraw or modify the scheme fully or partially at any stage, so confirm the current position on the portal before committing investment on the strength of an incentive.

How to check your IPS 2022 application status

1. Log in to the Single Window Portal. Go to swp.dddgov.in with the same investor login used to file the application, open the Departments tab and select District Industries Centre to view the application you submitted for the Investment Promotion Scheme.
2. Read the stage shown against your application. A proposal moves through distinct, checkable stages: scrutiny at the District Industries Centre (including the physical verification of the enterprise and its fixed assets), placement before the Investment Promotion Council for in-principle clearance, approval by the Secretary (Industries), and finally issue of the sanction order by the General Manager, DIC. The portal reflects whichever of these stages your file has reached.
3. Use the portal's own tracking facility. The Single Window Portal carries a query and grievance redressal module with online tracking built in; raise a query there against your application reference if the status has not moved for some time.
4. Call or email the District Industries Centre directly if the portal status is unclear or has been static for weeks: 0260-2643122 or 0260-2642367, or write to dic-dnh@nic.in, quoting your application reference and the date of submission.
5. Watch your bank account, not just the portal, for the payout stage. Once approved, the subsidy is credited by RTGS or NEFT straight into the loan or cash credit account you gave in the application, so the disbursal itself is confirmed by a bank credit entry rather than a portal message. Interest subsidy is released twice a year, on 30 September and 31 March, so check your loan account around those two dates rather than expecting a month-by-month update.
6. Visit the Investor Facilitation Centre in person as a last resort if online and phone follow-up do not resolve the query; its working procedure is published on the same portal.