Capital Contribution Scheme, 2008 (Goa)

What is the Capital Contribution Scheme, 2008?

Capital Contribution Scheme, 2008 is an industrial incentive of the Directorate of Industries, Trade and Commerce, Government of Goa, notified by the Industries Department at the Secretariat, Porvorim, on 31 December 2008 under reference No. 3/40/2003/IND(Part). It was framed in pursuance of clause 5.9(iii) of the Goa Industrial Policy, 2003.

The scheme is unusual among state incentives because it is not a subsidy. The Government puts capital into the unit, up to Rs 1 crore, alongside an equal or larger contribution from the promoters, holds that position for five years against a guaranteed return of 6 per cent or actual profit, and takes post-dated cheques and collateral security for the repayment.

The introduction states the purpose plainly: "The Scheme is designed to support local entrepreneurs, promote industrial units which venture out, and develop special products based on locally developed technology." Three objectives follow — to give financial support to local entrepreneurs, to support existing functional units to venture out and expand, and to support locally developed technology.

Is the scheme still open?

Clause 1(2) of the notification says the scheme "shall come in force from the date of its publication in the Official Gazette and shall remain in force up to 31st March 2011."

The Directorate of Industries, Trade and Commerce continues to publish the full text of the scheme under Services > Capital Contribution on its website, and lists Capital Contribution among its services alongside Share Capital, Preferential Purchase Incentive, Interest Subsidy, Certification and Patenting, Women Entrepreneurs, Employment Subsidy, Consumption of Local Raw Materials and Export Market Development.

A prospective applicant must therefore confirm with the Directorate whether the 2008 scheme has been extended, re-notified or superseded before building a funding plan around it. The published sunset date is 31 March 2011.

How much does the scheme provide, and on what terms?

The quantum clause has four parts, and all four matter:

1. The quantum of contribution is subject to budgetary provisions, and in the case of sick units, to the revival plan. Applications not considered during a fiscal year lapse, and fresh applications have to be filed in the next financial year.
2. Maximum capital contribution is up to Rs 1 crore per unit, subject to the condition that the promoters' contribution is equal to or more than the capital contribution by the Government. This matching condition does not apply to sick units.
3. The capital contribution is for a period of 5 years as indicated in the sanction order, with a guaranteed return of 6 per cent or actual profit.
4. The beneficiary submits post-dated cheques for repayment as security towards the sanctioned amount. If those cheques are not realised, the beneficiary is liable to be prosecuted under the relevant provisions of the Act.

On top of the cheques, clause 5(5) requires the unit to submit collateral security equal to the quantum of contribution sought, or equal to the amount the unit is eligible for. On failure to repay, that security is forfeited.

Who can and cannot get capital contribution?

A unit can apply if:

• It is a cluster or unit in operation for a period of at least 3 years.
• It is a partnership firm or a private limited concern.
• It is permanently registered with the Directorate of Industries, Trade and Commerce. Clause 4(3) states that only permanently registered units are eligible.
• Its promoters can put in an amount equal to or greater than the capital contribution being sought.
• It can furnish post-dated cheques and collateral security to the value required.

Preference is given to units in the small scale sector, units involved in research and development, technically oriented units, and units run by women entrepreneurs or clusters.

You are not eligible if:

• The unit is covered under the Goa Sick Industrial Unit Revival and Rehabilitation Scheme, 2008, or any such scheme in force during the tenure of this scheme. Clauses 4(1) and 4(2) both carry this exclusion, and clause 7 adds that for units covered under that scheme the application is considered under that notification as a cluster benefit case and shall not be considered under this notification.
• The unit has been in operation for less than 3 years.
• The unit is not permanently registered with the Directorate.
• You are an individual seeking personal capital, a loan or a grant. This is an industrial incentive to firms and companies; individuals cannot apply for a personal benefit under it. Individual entrepreneurs in Goa should look instead at the Chief Minister's Rozgar Yojana route.

How to apply for the Capital Contribution Scheme

1. Confirm the scheme's current status with the Directorate of Industries, Trade and Commerce, given the 31 March 2011 sunset date printed in the notification.
2. Check permanent registration. Only units permanently registered with the Directorate are eligible, so confirm that the registration is current and take a copy of the certificate.
3. Assemble the audited accounts of the preceding 3 years. These also evidence that the unit has been in operation for at least three years.
4. Prepare the project report. The Task Force Committee scrutinises and sanctions benefits on this document, so it should set out the expansion or technology proposal, the promoters' matching contribution and the repayment plan over five years.
5. Arrange the promoters' matching contribution. The Government's contribution cannot exceed what the promoters put in, except for sick units.
6. Arrange the collateral security equal to the contribution sought, and the post-dated cheques for repayment.
7. Apply in the specified format to the Director of Industries, Trade and Commerce, Panaji, Goa, enclosing the permanent registration certificate copy or necessary proof, the three years of audited accounts and the project report.
8. Track the decision timeline. The Directorate scrutinises and considers the application within 3 months from the date of receipt and conveys its decision within 4 months. On approval, the capital contribution is released within 60 days from the date of approval.

Who decides on the application?

A Task Force Committee constituted for this scheme scrutinises and sanctions the benefits. Its composition is set out in the notification:

• General Manager (DIC), Directorate of Industries, Trade and Commerce, as Chairman
• Assistant Director (Administration), Directorate of Industries, Trade and Commerce, as Member
• Under Secretary (Finance) / (Expenditure), as Member
• One person nominated by the Government from the Goa Chamber of Commerce and Industry
• One person nominated by the Government from the Goa State Industries Association

The Committee may co-opt additional members from financial institutions or associations if it considers it necessary.

What are the common reasons an application fails?

• Less than three years in operation. The three-year operating history is a hard gate, and the three years of audited accounts are what prove it.
• Registration that is not permanent. Provisional or lapsed registration with the Directorate does not qualify.
• Promoters' contribution below the Government's. The matching condition is the core of the scheme's design and cannot be waived except for sick units.
• Being a sick unit under the 2008 revival scheme. Such units are routed to the Goa Sick Industrial Unit Revival and Rehabilitation Scheme, 2008 and expressly excluded here.
• Collateral or post-dated cheques not arranged. Both are conditions of sanction, not post-disbursal formalities.
• Applying too late in the fiscal year. Applications not considered during the fiscal year lapse, and a fresh application must be filed next year.

Where do I contact the Directorate?

The Directorate of Industries, Trade and Commerce, Government of Goa, names the Deputy Director (Administration) as its Public Grievance Officer, on 0832-2420787, email dir-indu.goa@nic.in. The same office holds the State Public Information Officer roles for the establishment, accounts, statistical, development and IT sections, and for the development, registration, HPCC/IPB cell, MSME Council, online registration and ease-of-doing-business functions.

Key facts to remember

• Capital Contribution Scheme, 2008 was notified by the Industries Department, Government of Goa on 31 December 2008 under the Goa Industrial Policy, 2003.
• Maximum capital contribution is Rs 1 crore per unit.
• Promoters must contribute an amount equal to or more than the Government's, except for sick units.
• Contribution runs 5 years with a guaranteed return of 6 per cent or actual profit to the Government.
• Post-dated cheques and collateral security equal to the contribution are required; collateral is forfeited on default.
• Only clusters and units in operation for 3 years and permanently registered with the Directorate are eligible.
• Preference for small scale, R&D, technically oriented and women-run units.
• Decision within 4 months; release within 60 days of approval.
• The notification's stated tenure ended 31 March 2011 to confirm current status with the Directorate.

How to check your application status

The Capital Contribution Scheme, 2008 is processed on paper by the Directorate of Industries, Trade and Commerce, Panaji, and there is no separate online tracking portal for this particular scheme. Applicants have to follow up directly with the Directorate rather than checking a status page.

1. Keep your acknowledgement reference. When the application is submitted to the Director of Industries, Trade and Commerce, note the date of receipt and any file or diary number given at the counter. The notification's own timelines (scrutiny within 3 months, decision within 4 months, release within 60 days of approval) are measured from this date, so you need it to judge whether your file is on schedule or overdue.

2. Call or write to the Directorate for a status update. The Directorate's contact number is 0832-2420787 and its email is dir-indu.goa@nic.in. Quote the file number, the unit's name and the date of application when you call or write, since the office handles several incentive schemes (Share Capital, Preferential Purchase Incentive, Interest Subsidy and others) through the same establishment.

3. Ask specifically where the file stands in the Task Force Committee process. Because sanction is not automatic but depends on scrutiny and approval by the Task Force Committee headed by the General Manager (DIC), a useful status question is whether the file has been placed before the Committee yet, or is still under scrutiny at the desk level.

4. Escalate to the Public Grievance Officer if there is no response. The Deputy Director (Administration) at the Directorate holds the Public Grievance Officer role for the establishment. If routine follow-up calls do not get a clear answer on where the application stands, a written grievance to this officer, referencing the same file number, is the next step before the fiscal year closes and the application lapses.

5. Watch the fiscal-year cutoff. Since applications not considered within the financial year lapse and must be refiled afresh, applicants should track status closely as the year-end approaches rather than assuming an unresolved file will simply carry over.

6. After sanction, track the 60-day release timeline separately. Approval and disbursal are two different events: once the Committee sanctions the contribution, the notified timeline for actually releasing the funds is 60 days from the date of approval, so a sanctioned but undisbursed file is a distinct status to follow up on with the same office.