Scheme for Assistance for Research & Development Activities: Assistance to Industrial Association for Establishment of R&D Laboratories

What is the Assistance to Industrial Association for R&D Laboratories scheme?

Assistance to Industrial Association for Establishment of R&D Laboratories is Scheme 4 of the Scheme for Assistance for Research & Development Activities notified by the Industries and Mines Department, Government of Gujarat, under the Gujarat Industrial Policy 2020. Government Resolution No. GID-102020-327060-G dated 1 September 2020 notified the parent scheme, which came into force on 7 August 2020 for a period of five years.

The Industries Commissionerate published the Operating Guidelines of the Scheme for Assistance for Research & Development Activities 2020 on 27 July 2022. Those guidelines set out four separate components:

• Scheme 1: assistance to establish an R&D or product development centre.
• Scheme 2: assistance for contract or sponsored research work.
• Scheme 3: assistance to R&D institutions and laboratories set up by the State Government or the Government of India.
• Scheme 4: assistance to an industrial association for establishment of R&D laboratories, which is what this guide covers.

The logic behind Scheme 4 is straightforward. A single MSME in a cluster cannot afford a testing and research laboratory, but the association that represents the whole cluster can. Gujarat therefore funds the majority of the equipment cost so that the laboratory serves every member unit. A shared quality control and quality assurance backbone for a sector or a district.

According to the Gujarat Industrial Policy 2020 document, the state provides assistance for laboratories established by industries associations at up to 60% of the project cost of machinery and equipment. The operating guidelines put the ceiling at Rs 5 crore.

Who is eligible for this R&D laboratory assistance?

Institutions that can apply

• A registered industrial association, any legal entity registered under the applicable act and formed by industries or a group of industries.
• The laboratory being set up must be recognised by CSIR or DSIR. Provisional approval from CSIR or DSIR must be obtained and produced at the time of applying.
• The eligible activity is setting up a new R&D laboratory with all the necessary infrastructure and facilities.

Who cannot apply or is not eligible

• Individuals, students and researchers cannot apply. There is no personal grant or fellowship here.
• A single company or industrial undertaking is not eligible under this component; a company setting up its own R&D or product development centre applies under Scheme 1 instead, where the rate is up to 30% and the ceiling is Rs 5 crore.
• An association without CSIR or DSIR recognition for the laboratory is not eligible.
• Strengthening or modernising an existing laboratory is not the eligible activity under Scheme 4; that route sits under Scheme 3 for government-set-up institutions.
• Recurring expenditure is not eligible for assistance under any component of the R&D policy.
• Land and building costs are outside the eligible project cost.
• Assets purchased earlier with any other State Government grant cannot be shown again — the application form carries a specific declaration on this point.

How much money does the scheme actually pay?

The headline rate is 60% of the eligible project cost, capped at Rs 5 crore. The eligible project cost covers machinery and equipment, hardware and software required for research, and related research assets.

The operating guidelines then add an important qualification. In its 2nd meeting, the State Level supported Committee decided to spread the available grant across more applicants by applying a slab structure to eligible project cost:

The guidelines work through the arithmetic. On an eligible project cost of Rs 70 lakh the assistance is Rs 21 lakh. On Rs 3 crore it is Rs 30 lakh on the first crore plus Rs 40 lakh on the next two crore, or Rs 70 lakh in total. On Rs 15 crore it works out to Rs 185 lakh.

An association should therefore plan on the slab arithmetic and treat the 60% figure as the policy's outer rate, confirming the applicable number with the Industries Commissionerate before finalising its budget.

What documents are required?

The application form itself asks for the project cost broken into building, machinery and equipment, hardware and software, electrification, consumables, consultancy and other heads, and for the means of finance split between promoter's contribution, Government of India assistance, Government of Gujarat assistance and term loan. It also asks whether any government dues are pending and whether any legal case is pending in a court of law.

How to apply for R&D laboratory assistance

1. Obtain CSIR or DSIR recognition, or at least provisional approval, for the proposed laboratory. Nothing moves without it.
2. Prepare the project report covering the target research sector, proposed facilities, technology, project cost, means of finance, a five-year revenue projection, the implementation schedule and the list of beneficiary units.
3. Fill the Scheme 4 sanction application form from the R&D operating guidelines and assemble the Scheme 4 checklist documents, all signed by the authorised signatory and with financial statements certified by the auditor or chartered accountant.
4. Submit the file to the Office of the Industries Commissioner, Block No. 1/2, 3rd Floor, Udyog Bhavan, Gandhinagar 382010.
5. Attend the presentation before the Screening Committee, covering the technical and financial aspects of the project, its innovativeness, and the proposed outcome and benefits.
6. Wait for the State Level supported Committee to consider the recommended proposal and issue the in-principle approval letter.
7. Acquire the assets within the period stated in the in-principle approval letter, then file the claim application with the claim checklist, claim application form and CA certificate for Scheme 4.
8. Host the physical inspection by the team headed by the General Manager of the District Industries Centre, after which the reimbursement is disbursed by the Office of the Industries Commissioner subject to availability of funds.

How is the assistance disbursed?

Assistance is paid strictly on a reimbursement basis. Nothing is advanced. The inspection team headed by the General Manager, District Industries Centre, and including domain expert government officials, checks four things: whether the assets in the in-principle approval letter have actually been acquired, what progress the project has made, whether the conditions of the approval letter are met, and what amount is eligible for reimbursement.

Timing matters. Investment made after the date the application is submitted to the Office of the Industries Commissioner is eligible. For associations that applied before the operating guidelines were declared on 27 July 2022, investment from 7 August 2020 up to that date also counts, provided the other conditions of the GR are met.

After disbursement, the association must file utilisation certificates quarterly for assistance received within a financial year. Assistance is not released if the utilisation certificate for the previous financial year is missing.

Why applications get rejected

• No CSIR or DSIR recognition for the laboratory, the single most common disqualifier.
• Applicant is a company, not an association. Scheme 4 is only for laboratories set up by an industrial association.
• Land and building costs loaded into the claim, which are outside the eligible project cost.
• Recurring expenditure claimed, which the general terms exclude.
• Routine testing dressed up as research. Market research, work and methods study, operations and management research, and routine testing and analysis for process control, quality control or plant maintenance are not R&D.
• No separate books of accounts for the project, which the general terms require.
• Pending government dues or a pending court case, both of which the application form asks about.
• Assets bought earlier with another State Government grant being shown again.

The SLEC can withdraw an approval already granted if the association fails to comply with the in-principle approval letter or the scheme conditions, and non-compliance can lead to cancellation of the sanction, stoppage of disbursement and debarment from the scheme.

Key dates

• 7 August 2020, the R&D scheme comes into force.
• 1 September 2020, GR No. GID-102020-327060-G issued.
• 27 July 2022, operating guidelines declared; the eligibility date for investment turns on this date for early applicants.
• 6 August 2025, end of the notified five-year operative period.

Gujarat has since published the Viksit Gujarat Industrial Policy 2026. Because no extension notification for the R&D scheme appears on the Industrial Policy 2020 page of the Industries Commissionerate website, an association planning a fresh proposal should confirm the current position with the Commissionerate first.

Who sanctions the assistance and where to complain

The sanctioning authority is the State Level supported Committee, chaired by the ACS, Principal Secretary or Secretary of the Industries and Mines Department. Its members include the Industries Commissioner, a representative of the Gujarat Chamber of Commerce and Industry, the Financial Adviser of the department, a Joint or Deputy Secretary, the Additional Industries Commissioner, a co-opted sector-specific technical expert, and a Joint or Deputy Commissioner of Industries as Member Secretary.

The contact person named in the R&D operating guidelines is the Joint Technical Advisor (P.I.), Office of the Industries Commissionerate, Block No. 1/2, 3rd Floor, Udyog Bhavan, Gandhinagar 382010, on 079-23252684, with email jtapi-ic@gujarat.gov.in and icsalt@gujarat.gov.in.

In case of any dispute, the operating guidelines state that the decision of the SLEC is final.