"Grant to Subsidy for Raw Materials Procurement" Component of the "Development of Coir" Scheme

What is the Grant to Subsidy for Raw Materials Procurement component?

Grant to Subsidy for Raw Materials Procurement is a component of the Development of Coir scheme operated by the Department of Industries and Commerce, Government of Puducherry, and administered through the District Industries Centre (DIC) at Thattanchavady. It reimburses a coir unit part of what it spends on buying raw material.

The department's reasoning for this component is set out unusually frankly in its own scheme document. According to the Department of Industries and Commerce, Puducherry: "The neighbouring states namely Kerala, Karnataka and south Tamil Nadu are attributing major scopes for coir Industries because of stock of enough raw materials (i.e. fibre/curling fibre) available with the states. In order to promote Coir Industries in this U.T. of Puducherry, it is very essential to consider subsidy on Raw Material procurement so that new units can survive with competitive situation of the units in neighbouring states."

That paragraph explains the whole design. Coir fibre comes from coconut husk, and the husk supply, and therefore the defibring and curling capacity, is concentrated in Kerala, coastal Karnataka and the southern districts of Tamil Nadu. A coir unit in Puducherry buys its fibre from those states, pays freight on it, and then competes on price against units sitting next to the fibre. The subsidy is a deliberate attempt to close that structural cost gap rather than a general production incentive.

The department therefore provides 15 per cent as subsidy on the annual procurement of raw materials, subject to a maximum of Rs 5 lakh per annum per unit.

Who is eligible for the coir raw material subsidy?

A unit can claim if:

• It is a coir unit operating in the Union Territory of Puducherry. The Puducherry, Karaikal, Mahe or Yanam regions. The whole point of the component is to support units located in the union territory against units located elsewhere.
• It manufactures coir products: coir rope, coir mats and matting, coir fibre products, geo-textiles and similar items.
• It procures coir raw materials, principally fibre and curling fibre, and can document that procurement with invoices and proof of payment.
• It is a registered enterprise, ordinarily evidenced by Udyam registration in the coir line of activity.

You cannot apply, or are not eligible, if:

• Your unit is located outside Puducherry. A unit in Kerala or Tamil Nadu is precisely the competitor this component is designed to offset, and cannot draw on Puducherry's budget.
• You are a trader rather than a manufacturer. The subsidy exists so units can "survive with competitive situation" — that is, so they can produce. Fibre bought for resale is not procurement for a coir industry in the sense the component intends.
• You cannot document the procurement. A claim of 15 per cent requires a verifiable base figure. Cash purchases with no invoice and no payment trail cannot support a claim.
• You are an individual artisan working without a unit. Individual artisans are supported through the training, exposure tour and exhibition components of the same scheme, which pay stipends of Rs 4,500 and Rs 7,500 a month and daily allowances of Rs 150.
• You have already drawn the Rs 5 lakh ceiling for the year. The cap is absolute per unit per annum, however large the procurement.

How is the subsidy calculated?

The formula is simple, and the cap bites early.

Subsidy = 15% of annual raw material procurement, subject to a maximum of Rs 5,00,000 per unit per year.

The ceiling is reached at roughly Rs 33.33 lakh of annual procurement. Above that, additional purchases attract no further subsidy. That structure is consistent with the scheme's stated intent of helping new and smaller units survive rather than subsidising large-volume operations indefinitely.

The subsidy is a reimbursement of procurement already made. It is not an advance, and it is not a working capital facility. A unit that needs money to buy fibre in the first place should look at the separate Grant of Margin Money for Availing Capital Loan component of the same scheme, which releases 25 per cent margin money restricted to Rs 25 lakh, that is, for a project of Rs 1 crore; to the bank on behalf of the entrepreneur once the financial institution has sanctioned a loan.

What documents are required?

Keep the invoice file in order of date and total it before you submit. The department computes 15 per cent on the figure it can verify, not on the figure claimed, and a disorganised invoice bundle usually results in a lower sanctioned base.

How to apply for the coir raw material procurement subsidy

1. Total your year's coir raw material purchases and assemble every invoice with its matching payment proof. Establish the base figure before you go anywhere near the counter.
2. Visit the District Industries Centre, Thattanchavady, Puducherry 605 009, ask for the Project Manager (Cottage Industries), and collect the application form for the raw material procurement subsidy under the Development of Coir scheme.
3. Complete the form, stating the unit's name, Udyam number, the period claimed, the total procurement figure and the 15 per cent claimed against it.
4. Attach the documents; Udyam certificate, invoices, payment proofs, stock and production register extracts, proof of unit location and bank details.
5. Submit the file and take a dated acknowledgement, noting the receiving officer's name.
6. Allow the departmental inspection. Officers verify that the unit is functioning, that it is a coir manufacturing unit, and that the purchased material entered production. Keep the unit, its stock and its books available.
7. Receive the sanction and the credit into the unit's bank account after the expenditure sanction is issued.

Units in the outlying regions can lodge the file with the Functional Manager, Rural Industrial Estate, Kottucherry, Karaikal 609 609 on +91-4368-266467, or the Assistant Director, Karaikal on +91-4368-265438, or the Technical Officer, Civil Station, Yanam 533 464 on +91-884-2321257. Mahe units approach the Technical Officer's office there. Files are consolidated at the Cottage Industries wing in Puducherry.

How do I check the status of my subsidy claim?

There is no online tracking for this component. Follow up by:

1. Visiting the Cottage Industries section at the District Industries Centre with your acknowledgement.
2. Calling +91-413-2248391, or the General Manager's lines on +91-413-2248987 and +91-413-2249392.
3. Emailing dic.pon@nic.in from the unit's registered email address.

Ask two separate questions: whether the claim has been verified and the base procurement figure accepted, and whether the expenditure sanction has been issued. Subsidy files commonly clear verification months before the money is released, because release depends on the budget head having funds.

Why claims get reduced or rejected, and how to fix them

• Invoices without payment proof. The commonest reason a claim is cut. Every invoice needs a matching bank payment. Stop buying fibre in unrecorded cash if you intend to claim.
• Purchases of items that are not coir raw material. Packaging, consumables, machinery spares and fuel are not raw material procurement. Claiming them inflates the base, and when the department strips them out the whole file loses credibility.
• No evidence the material was consumed in production. Maintain a stock register and a production register. Material bought and resold will be excluded.
• Unit not functioning at inspection. Release is conditional on the unit actually operating. A closed or dormant unit will not be sanctioned.
• Udyam registration in a different activity. If your Udyam certificate shows an activity unrelated to coir, update it before claiming.
• Claim exceeding the ceiling. Anything above Rs 5 lakh in a year is simply capped. Do not treat the shortfall as an arrears claim for the following year.
• Claim filed too late in the financial year. Funds under the budget head are committed as the year progresses.

What are the key dates?

The Development of Coir scheme runs on the Government of Puducherry's financial year, 1 April to 31 March, and the subsidy ceiling is expressed per annum per unit, which ties the claim to that year. No fixed last date is published for filing.

The practical sequence is: close your books for the year, total the procurement, and file the claim as soon as possible after 31 March so it is considered against the new year's budget provision early rather than late. Units that wait until January or February commonly find the head exhausted and are carried to the following year.

The District Industries Centre publishes notices and circulars on dic.py.gov.in under Notice Board, News and Circulars, and its scheme pages carry a "page last updated" date worth checking before you rely on a figure.

How do I raise a grievance?

1. Start with the Project Manager (Cottage Industries), District Industries Centre, Thattanchavady, Puducherry 605 009.
2. Escalate to the General Manager, District Industries Centre, on +91-413-2248987 or +91-413-2248391.
3. Escalate to the Director of Industries and Commerce, Industrial Estate, Thattanchavady, Puducherry 605 009, on +91-413-2248476, +91-413-2248168 or +91-413-2248320.
4. The departmental head is the Secretary to Government (Industries and Commerce), Chief Secretariat, Puducherry 605 001, on +91-413-2336115.
5. Written grievances go to dic.pon@nic.in. The department's website carries a Feedback form and an RTI section, and RTI is the right route where a unit wants written reasons for a reduced sanction.

No fee is payable for filing a subsidy claim, and no intermediary is authorised to charge a percentage of the subsidy for processing it.