Interest Subsidy Scheme, 2008

What was the Interest Subsidy Scheme, 2008?

Interest Subsidy Scheme, 2008 was an industrial incentive of the Industries Department, Government of Goa, administered by the Directorate of Industries, Trade and Commerce. It was notified on 31 December 2008 under notification No. 3/40/2003/IND(Part), framed in pursuance of clause 5.9(iii) of the Goa Industrial Policy, 2003, and issued with the concurrence of the Finance (Expenditure) Department under U.O. No. 1650 dated 26 June 2008.

The introduction set out the reasoning: to boost economic growth in the state, the Government of Goa proposed to provide subsidies to micro and small enterprises on the interest payable by them, described as an attractive incentive to investors who could then invest more and seek better returns for themselves and the state.

Three objectives were listed, to give a boost to micro and small enterprises in the state, to provide incentives to small investors to make their enterprises financially viable, and to promote industrial growth and create an optimistic environment for the small investor and local entrepreneurs to invest.

Status. Clause 1(2) of the notification stated that the scheme would come into force from the date of its publication in the Official Gazette and would remain in force up to 31st March 2011. It has been superseded for manufacturing MSMEs by the Interest Subsidy Scheme, 2017. This page records the 2008 terms accurately and points readers to the current scheme.

Who was eligible for the 2008 interest subsidy?

A unit could claim if:

• It was a new micro or small enterprise that went into commercial production after the commencement of the scheme. The date of commencement of production as recorded by the Directorate of Industries, Trade and Commerce was the date that counted.
• It was permanently registered, or acknowledged with Entrepreneur Memorandum II, by the Directorate of Industries, Trade and Commerce.
• Its industry fell within the list of industries specified under the scheme.
• It had availed term loans or working capital from a nationalised bank, a scheduled bank, a co-operative bank, the Economic Development Corporation Ltd, or any other financial institution notified by the Government of Goa.

A unit was not eligible if:

• It was an existing enterprise already in commercial production before the scheme commenced. The scheme covered only new units.
• It was covered under Orange II B, which the notification expressly excluded.
• It was a unit under a revival plan as defined under the sick unit revival policy.
• It was a medium or large enterprise, since the scheme was confined to micro and small enterprises.

Individuals could not claim under this scheme. The applicant was always a registered enterprise.

How much did the scheme pay?

The quantum clause set two tests and a ceiling. Incentives were given to eligible units to the extent of:

• 1.5% of the total net turnover, or
• 30% of the interest paid by the unit,

whichever was less, subject to a ceiling of Rs 5 lakh per annum.

The scheme defined net turnover carefully: turnover not including taxes such as sales tax and excise, and net of any discount. That definition mattered because it was the smaller of the two tests that usually applied for a fast-growing unit.

Worked through, a unit with net turnover of Rs 2 crore and interest paid of Rs 12 lakh computes 1.5% of turnover as Rs 3 lakh and 30% of interest as Rs 3.6 lakh, so it receives Rs 3 lakh. A unit with net turnover of Rs 6 crore and interest of Rs 30 lakh computes Rs 9 lakh and Rs 9 lakh respectively, and receives the ceiling of Rs 5 lakh.

The clause also recorded that any additional benefit granted to women entrepreneurs by the Government of India or the Government of Goa under any scheme of any department stood on its own footing.

For how long did the benefit run?

The benefit period was five years, that is 20 quarters, counted after the quarter in which commercial production commenced.

The applicability rule was precise: the interest subsidy applied from the interest of the quarter preceding the quarter of the first commercial production date, and the benefit ran for 20 quarters from that quarter of applicability. A unit that started commercial production in, say, the second quarter of a financial year could therefore include interest from the first quarter in its first claim.

How to apply for and claim the Interest Subsidy Scheme, 2008

1. Establish the date of commencement of commercial production with the Directorate of Industries, Trade and Commerce, since the Directorate's recorded date fixed the 20-quarter window.
2. Register permanently or file Entrepreneur Memorandum II with the Directorate, which was the eligibility gateway.
3. File the claim after the close of each financial year and before 31 May, in the specified proforma. Every eligible unit had to file annually.
4. Attach the bank certificate. The claim had to carry the certificate issued by the nationalised bank or specified financial institution in respect of the total interest paid by the unit.
5. Attach the turnover statement, since the 1.5% of net turnover test could not be applied without it.
6. Await the Task Force Committee, which scrutinised and recommended applications within 3 months of receipt, with the amount payable disbursed within 6 months from the date of receipt.

The scheme was blunt about the deadline. The claim for the year, four quarters, lapsed if not submitted by 31 May. Eligibility itself, however, continued for the balance period of the benefit, so a unit that missed one year's claim did not lose the remaining quarters.

Who decided the claims?

A Task Force Committee constituted under the scheme scrutinised and recommended applications, comprising:

1. General Manager (DIC), Directorate of Industries, Trade and Commerce, Chairman
2. Assistant Director (Administration), Directorate of Industries, Trade and Commerce — Member
3. Under Secretary (Finance / Expenditure), Member
4. One person nominated by the Government from the Goa Chamber of Commerce and Industry
5. One person nominated by the Government from the Goa State Industries Association

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

What replaced the 2008 scheme?

The successor for manufacturing MSMEs in Goa is the Interest Subsidy Scheme, 2017, notified under 3/14/2017-IND and governed by the Goa State Incentives to Encourage Investments Scheme, 2017. The umbrella scheme. Its terms are materially different and materially larger:

• It came into force on 1 October 2017 and was to remain in force up to 30 September 2022, with benefits disbursable beyond that date provided at least one claim was submitted to the Directorate during its validity.
• It covers micro, small and medium manufacturing industries in the White, Green and Orange categories that commenced production after 1 October 2017, and also Hinterland Eco-tourism projects in lesser developed talukas.
• It requires enterprises to engage a minimum of 60% Goan manpower on regular employment.
• For term loan interest, the subsidy is 30% of the interest paid. For working capital, it is 1.5% of total turnover or 30% of interest paid, whichever is less. The same formula carried over from 2008.
• The subsidy scales pro rata from 60% to 100% on a continuous linear scale as Goan employment rises from 60% to 80% and above. Below 60% Goan employment there is no benefit at all.
• The ceiling is Rs 25 lakh per annum, or Rs 27.5 lakh for all-women and SC/ST applicants.
• The subsidy period runs to a maximum of seven years, that is 27 continuous quarters after the quarter in which the subsidy is first claimed.
• Enterprises taking any benefit under a Department of Information Technology policy of the Government of Goa are not eligible, and neither are cases that have claimed a similar benefit under any other Government of Goa scheme.
• Loans of EDC Ltd covered under the Modified Interest Rebate Scheme 2012, interest paid under the Chief Minister's Rojgar Yojana or another employment generation scheme, units under the Goa State Financial Relief Scheme for Sick Industrial Units 2016, and charges, overdue and penal interest are all excluded.

An IT unit in Goa should not look at either scheme; it claims instead under the Interest Subsidy Scheme for Smaller Business Units, 2018 of the Department of Information Technology, which pays interest subsidy on working capital loans up to Rs 5 lakh a year for three years.

Where to check the current position

• Directorate of Industries, Trade and Commerce, Udyog Bhavan, Panaji, Goa
• Public Grievance Officer: Deputy Director (Administration), contact number 2420787, email dir-indu.goa@nic.in, as listed on the Directorate's contact page
• Scheme text: the 2008 notification is published under Interest Subsidy on ditc.goa.gov.in; the 2017 notification appears in the Official Gazette Series I No. 21 dated 23 August 2018

Ask the Directorate which interest subsidy applies to your unit before you compute a claim. The 2008, 2017 and IT-sector schemes have different eligibility, different ceilings and, critically, different exclusions that rule each other out.

How to check your claim status

The Interest Subsidy Scheme, 2008 predates any online tracking portal, so status checking was always a direct, offline process with the Directorate of Industries, Trade and Commerce rather than a login or SMS system.

• Confirm receipt of the claim first. A unit that filed its annual claim before the 31 May deadline should hold an acknowledgement from the Directorate's office at Udyog Bhavan, Panaji, showing the date the proforma, bank certificate and turnover statement were received. That receipt date is what starts the Directorate's own internal clock.
• Track the Task Force Committee timeline. The Committee was expected to scrutinise and recommend a claim within 3 months of receipt, with the sanctioned amount disbursed within 6 months of receipt. A unit past either window with no word should follow up rather than assume the claim is still pending in the ordinary course.
• Follow up in person or by letter, quoting the claim reference. Since there was no case-tracking number system published for this scheme, the safest reference is the date and mode of submission of the original claim, along with the unit's Entrepreneur Memorandum II or permanent registration number.
• Escalate to the Public Grievance Officer if there is no response. The Directorate's Deputy Director (Administration) handles grievances, reachable at 2420787 or dir-indu.goa@nic.in. This is also the right contact for a unit that filed a claim years ago under the 2008 scheme and never received a final answer before the scheme's window closed.
• For a unit unsure which scheme now governs it, the same office can confirm whether an old 2008-scheme claim is still payable, or whether the unit's later borrowings fall instead under the Interest Subsidy Scheme, 2017.

Because the 2008 scheme was notified to run only up to 31 March 2011, no fresh claim can be status-checked as "in progress" today; any live query at this point concerns an old, unresolved claim rather than a new application.

Common reasons claims under this scheme were rejected

• The unit was already in commercial production before the scheme commenced. The scheme covered only new micro and small enterprises starting production after the notification took effect. An existing unit that applied anyway was rejected outright, since there was no provision to backdate eligibility.
• The unit fell under Orange II B. The notification expressly excluded this category regardless of how well the unit otherwise met the other conditions, so an Orange II B unit's claim could not be salvaged by paperwork.
• The unit was under a sick-unit revival plan. A unit already covered by the revival policy for sick units was excluded, since the two forms of support were treated as mutually exclusive rather than stackable.
• The claim missed the 31 May deadline. The notification was explicit that a year's claim, covering four quarters, lapsed if not submitted by that date. Filing late for one year did not carry forward: the fix was to file the next year's claim on time, since the underlying 20-quarter eligibility itself continued even though that one year's amount was lost.
• The bank certificate was missing or did not match the claim. Since the claim quantum depended on the exact interest paid as certified by the nationalised bank, scheduled bank, co-operative bank or EDC Ltd, a claim filed without that certificate, or with a certificate for a different period than the claim year, could not be processed by the Task Force Committee.
• The turnover statement understated or omitted figures needed for the 1.5% test. Because the scheme paid whichever of the two tests was lower, an incomplete turnover statement made it impossible for the Committee to compute the correct, lower figure, and the claim was returned for correction rather than approved on the interest-only test.
• The enterprise was not permanently registered or had not filed Entrepreneur Memorandum II. Registration was the eligibility gateway; a provisional or incomplete registration status with the Directorate meant the claim could not be verified against the unit's recorded date of commencement of commercial production.
• The unit was medium or large rather than micro or small. The scheme's benefit was confined by size classification, and a unit that had grown past the micro or small threshold by the time of filing was no longer eligible for that year's claim under this scheme.