Scheme for Assistance to Micro, Small and Medium Enterprises (MSME): Rehabilitation of Sick Enterprises

What is the rehabilitation of sick enterprises component?

Scheme for Assistance to Micro, Small and Medium Enterprises: Rehabilitation of Sick Enterprises is a component of Gujarat's MSME assistance framework, administered by the Industries and Mines Department through the Industries Commissionerate and the MSME Commissionerate. The component exists to support small and medium units that have become financially sick but are considered capable of revival, so that a viable enterprise is not lost along with the jobs and supplier relationships attached to it.

The current legal basis is the Aatmanirbhar Gujarat Scheme for assistance to MSMEs, notified by the Industries Commissionerate through government resolution MIS-102022-1271(1)-I dated 5 October 2022. That scheme carries a range of components for MSMEs in Gujarat, capital and interest subsidy, quality certification, patent assistance, ICT and ERP adoption, energy and water conservation, technology acquisition, rent assistance, SGST reimbursement and ZED certification, for which the Commissionerate has published separate draft guidelines. Rehabilitation support for sick units belongs to the same family of MSME assistance administered by the same offices.

The logic of the component matters when you apply. Gujarat does not decide on its own that an enterprise is sick. The lender does. Banks and financial institutions apply the Reserve Bank of India's framework for revival and rehabilitation of MSMEs, identify a unit as stressed or sick, and put together a restructuring or rehabilitation package. The state's role is to support a package the lender has already accepted, typically by easing the interest burden or the statutory cost of the revival period. That sequencing is why a bank certification and a bank-agreed package sit at the top of the document list.

Who is eligible under the sick enterprises component?

Your enterprise can be considered if:

• The enterprise is a micro, small or medium enterprise with a valid Udyam Registration, and it is located and operating in Gujarat.
• The enterprise has been classified as sick by its lender under the applicable Reserve Bank of India framework, with certification in writing.
• A rehabilitation or restructuring package has been drawn up and agreed by the bank or financial institution financing the unit.
• The enterprise's accounts are audited for the years relied on to establish the sickness, and it has a PAN and constitution documents in order.
• The unit is considered potentially viable — the package must show a path back to operations, not merely absorb losses.

You cannot apply if:

• You are an individual seeking a personal benefit. This is an enterprise incentive, not a citizen welfare scheme, and individuals are not eligible.
• The enterprise is not registered under Udyam, or exceeds the MSME investment and turnover thresholds and is therefore a large enterprise.
• The enterprise is located outside Gujarat. Gujarat's industrial incentives apply to units in the state.
• No lender has certified sickness. A self-declared claim of financial distress is not eligible for consideration.
• The unit has been closed with no revival package and no lender willing to restructure. Rehabilitation assistance attaches to a live revival plan.
• The promoters are wilful defaulters, or the account has been classified in a way that rules out restructuring.

What documents are required?

How to apply for rehabilitation assistance

1. Confirm your Udyam Registration is valid and current at udyamregistration.gov.in. Registration is free; an out-of-date or missing Udyam number stops the application at the first scrutiny.
2. Get the sickness certification and the rehabilitation package from your lender. Approach the branch or the consortium leader and ask for certification under the Reserve Bank of India framework for revival and rehabilitation of MSMEs, along with the agreed restructuring terms.
3. Check the current terms with your District Industries Centre. Ask the DIC for the operative government resolution, the ceiling of assistance and the qualifying period in force, because these have changed across successive Gujarat industrial policies.
4. Register on the incentive portal at ifp.gujarat.gov.in, the Industries Commissionerate's online window for state industrial incentive schemes, and create the enterprise profile.
5. File the application online under the MSME assistance scheme, selecting the rehabilitation of sick enterprises component, and upload the lender certificate, the rehabilitation package, the audited accounts, Udyam certificate, PAN and constitution documents.
6. Submit and save the application number generated on the portal. This is the reference for every later follow-up.
7. Respond to District Industries Centre scrutiny. The DIC verifies the documents, may inspect the premises, and forwards a recommendation to the sanctioning authority.
8. Receive the sanction order and comply with its conditions. Disbursement follows the schedule set in the sanction, and is credited to the enterprise's bank account.

How do I check the status of my application?

Check status by logging in to ifp.gujarat.gov.in with the credentials used to file, where the portal shows the stage the application has reached. For anything the portal does not explain, contact the District Industries Centre for the district where the unit is located, quoting the application number. The Industries Commissionerate publishes district and office contacts on ic.gujarat.gov.in, and the MSME Commissionerate at msmec.gujarat.gov.in handles MSME-specific queries.

Why applications are rejected

• No lender certification of sickness. By far the most common failure. The state supports a bank-agreed revival, so this document is not optional.
• Rehabilitation package not sanctioned, only proposed informally by the enterprise.
• Udyam Registration missing, lapsed or in a different entity's name from the applicant.
• Audited accounts incomplete for the years on which sickness is claimed.
• Application filed outside the qualifying period set in the operative government resolution. Timelines are strict, so confirm them with the DIC before filing rather than after.
• Duplicate claim of the same relief already received under another state or central scheme for the same period.

Key dates

The Aatmanirbhar Gujarat Scheme for assistance to MSMEs was notified on 5 October 2022 through government resolution MIS-102022-1271(1)-I. Gujarat also published a Gujarat Industrial Policy 2026, and policy transitions can change which resolution governs an application filed today. Confirm with your District Industries Centre which resolution and which application window apply to your case before you file.

Where to raise a grievance

• District Industries Centre for the district where the unit is located, the first point of contact for any application under a state industrial incentive scheme.
• Industries Commissionerate, Gujarat: ic.gujarat.gov.in, which publishes the scheme resolutions and guidelines.
• MSME Commissionerate, Gujarat, msmec.gujarat.gov.in.
• MSME Samadhaan at samadhaan.msme.gov.in for delayed payment claims against buyers, a frequent underlying cause of MSME sickness that this state scheme does not itself address.