Entrepreneur Support Scheme

Entrepreneur Support Scheme (ESS) is the most popular and attractive scheme operated by the Directorate of Industries and Commerce, Government of Kerala. The scheme is operational w.e.f. 01.04.2012. The scheme aims to provide financial assistance to Micro, Small, and Medium Enterprises engaged in manufacturing activities in the State, proportional to the capital investment made. Depending upon the category of the investor, sector, and the District of investment, the unit can avail subsidy from 15% to 45% of the fixed capital investment. For this scheme, a loan from a financial institution is not mandatory.

Objectives: The new Entrepreneur Support Scheme intends to

• provide extensive support to micro, small and medium enterprises and
• give one-time support to entrepreneurs, with due regard to special categories by optimal utilization of funds and giving more flexibility of operation while implementing the Scheme.

Stages in Entrepreneur Support Scheme: The assistance under the Entrepreneur Support Scheme shall be released to the eligible entrepreneur (s)/unit in 3 stages.

1. Start-up Support
The Start-up support is provided for those enterprises that have availed at least a term loan from a financial institution and wish to avail of a part of the total eligible support prior to the commencement of commercial production. The assistance is limited to 50% of the total eligible support limited to ₹3 lakh on sanctioning the term loan from the bank. The unit can apply for the balance of the eligible support once it starts commercial production. A unit that does not avail of Start-up Support can directly apply for investment support, after the commencement of commercial production.
2. Investment Support
Investment Support is provided after the commencement of commercial production. To apply for Investment Support, a loan from a financial institution is not mandatory. The entrepreneurs shall apply within one year from the date of commencement of production. Enterprises undertaking Expansion, Diversification, or Modernization are also eligible for investment support for the additional investment made.
3. Technology Support
Technology Support is provided after commencement of production, on acquiring new technology from authorized institutions. The unit shall apply for technology support within 6 months from the date of commencement after installing the new technology from authorized agencies. Assistance will be provided for the new technology and for the plant and machinery installed in connection with the new technology.

Sanctioning Authority: All assistances under the ESS shall be sanctioned by

• The General Manager (District Industries Centre) - For start-up Support
• District Level Committee - For Fixed Capital Investment below ₹200.00 lakhs
• State Level Committee - For Fixed Capital Investment above ₹200.00 lakhs

Appellate Authority: If the decision of the District Level Committee is not satisfactory, an applicant can approach the State Level Committee, consisting of the following Members,

• Director of Industries & Commerce (Chairman)
• Representative of the Finance Department in Government
• Managing Director, KSIDC
• Managing Director, KFC
• Director –MSME (DI)
• Representative of the KSSIA State Committee

1. Provides Subsidy for the investment in Land, Building, Plant and machinery, Electrification, Essential Office Equipment, Pollution Control Devices, and other fixed assets.
2. For the General Category, assistance is 15% of the capital investment limited to ₹30 lakh.
3. For Young (18 to 45 years), Women, SC/ST, and Non-Resident Keralite (NRK) entrepreneurs, the assistance is 25% limited to ₹40 lakh.
4. Enterprises in priority sectors are eligible for an additional assistance of 10% limited to ₹10 lakh.
5. MSMEs started in the districts of Idukki, Wayanad, Kasargode and Pathanamthitta are eligible for an additional support of 10% limited to ₹10 lakh.
6. Enterprises set up after acquiring new technology from approved research institutions are eligible for additional support of 10% limited to ₹10 lakh.
7. The total eligible assistance for an enterprise is limited to ₹40 lakh.

1. All Micro, Small, and Medium Enterprises engaged in manufacturing activities and set up in the State, which had filed Entrepreneurs Memorandum Part I/II with the respective General Manager; District Industries Centre shall be eligible for this assistance.
2. For the purpose of this scheme an industrial unit eligible for the Entrepreneur Support assistance shall be an independent legal entity.

Obligations of the applicant entrepreneurs:

1. The applicant shall provide all required details and declare such information as to be true.
2. The applicant shall pay the requisite application fee.
3. The applicant shall provide clarifications or further details sought by the recommending/sanctioning authority.
4. The applicant shall allow inspection or verification of any details mentioned in the application including plant and machinery and all other assets if so required by the recommending/sanctioning authority.
5. The applicant shall produce originals of any important documents if so required by the recommending/sanctioning authority for verification.
6. The applicant shall execute the requisite legal agreement online and if required on paper as and when the proposal is approved for implementation and furnish the signed hard copy subsequently via post or otherwise.
7. The applicant shall utilize the amount received only in the manner agreed upon.
8. The applicant shall operate the unit as stipulated in the agreement in which the quantum of support received failing which the assistance shall be resumed by restoring the provisions of Kerala Revenue Recovery Act.
9. The applicant unit after availing the assistance shall furnish copies of balance sheets, valid license from local body, electricity bills, performance particulars in the prescribed proforma, etc. every year till the stipulated period before the 31st December of the next financial year, as proof of their functioning to the notified authority.

Enterprises under Priority Sector:

Rubber-based industries, Agro based and Food processing industries, Readymade Garments, Industries manufacturing equipment and machinery for non-conventional energy generation, Biotechnology industries, 100% export-oriented units, Biodegradable plastic industries, Plastic waste recycling industries, Biofertilizer industries, Pharmaceutical industries and healthcare products manufacturing industries.

1. The industries included in the Negative List and notified as such from time to time, government-controlled industries, public sector undertakings, units started by government-controlled agencies, and units financed by KVIC/KVIB, etc. shall not be eligible for any assistance under these rules.
   > Enterprises under Negative List:

Service Enterprises, Photo Studios and Colour Processing Centres, Tailoring other than manufacturing of readymade garments, Breweries and Distilleries of all types, Sawmills, Soap Grade Sodium Silicate, Asbestos processing, Metal Crushers including Granite Manufacturing units, All types of Steel Re-rolling Mills, Units manufacturing iron ingots, Calcium Carbide, Cement manufacturing except units manufacturing cement from fly ash, Potassium Chlorate, Power intensive units.

Online

Step 01: All applications for assistance under the "Entrepreneur Support Scheme" shall be submitted online by the applicant through the designated website of the Industries Department and produce the originals along with details of acknowledgment received at the time of filing online, before the Recommending Authority.
Step 02: The application will be processed by the Sanctioning Authority and the assistance will be sanctioned based on merit
Step 03: An application fee of ₹1105/- has to be remitted per unit.

Start-up Support:

Step 01: An entrepreneur who intends to avail the startup support shall apply in duplicate before the General Manager, District Industries Centre in the prescribed application form with the necessary documents and copy of the Project Report.
Step 02: The General Manager shall thereafter within 15 working days prepare a Technical Feasibility Report of the Project and forward the same to the concerned financial institution for sanction of eligible Term Loan.
Step 03: After sanctioning the Term Loan, the financial institution may furnish their recommendation in the prescribed format along with attested copies of the Sanction Letter towards the Term Loan and Project Report

Investment Support:

Step 01: All enterprises shall apply for investment support within one year of commencement of commercial production. The District Level Committee and State Level Committee shall however be competent to condone delays in individual cases on merits. The District Level Committee may condone delays only up to a period of two years.
Step 02: All applications shall be made to the respective recommending authority only after starting commercial production. All eligible investments as of the date of application for assistance can be admitted for investment support provided the same is envisaged in the original Detailed Project Report irrespective of the date of commencement of commercial production.

Technology Support:

Step 01: All industrial units shall apply for Technology support within six months from the date of commencement of commercial production after installing the new technology.
Step 02: The District Level committee shall however be competent to condone delays in individual cases on merits. The technology support can be claimed by new units or existing units without being a part of the diversification/expansion/modernization programme.
Step 03: The application for technology support shall be filed before the Recommending Authority along with copies of invoices of the machinery acquired in this regard with proofs of payment from the research institutions owned or controlled by Government such as CFTRI, CSIR, DFRL, DRDO, Rubber Board, CTCRI, ICAR, KVK etc. supported with proof towards the payment of consultancy charges, valuation certificate of a Mechanical Engineer not below the rank of an Assistant Executive Engineer of Government Department (Industries, PWD, LSGD, Irrigation, etc.) or a Chartered Engineer, Institution of Engineers India/Approved Valuer of Institution of Valuers, India and certificate from the research institutions that the technology is new. Government Engineering Colleges approved by AICTE, institutions under the Council of Science & Technology, universities, etc. which have Research and development facilities and which develop technologies for industry shall also be considered as research institutions for the purpose of Technology Support.
Note 01: The Officer while accepting the application form should examine whether all necessary details have been furnished. If any information is found inadequate, the same should be intimated to the applicant unit both electronically and otherwise, and granted 10 days’ time to rectify the defects.
Note 02: A Committee shall be constituted in all offices of the Recommending Authorities that shall monitor all units that avail assistance under this Scheme to verify whether they satisfy the provisions of this Manual. Any verification of the utilization of the assistance granted may preferably be made through the financial institution that financed the applicant unit. A unit that avails assistance under this Scheme shall also be under the obligation to furnish copies of balance sheets, valid licenses from local bodies, electricity bills, performance particulars in the prescribed proforma, etc. every year till the stipulated period before the 31st December of the next financial year, as proof of their functioning.