RULES FOR GRANT OF INTEREST SUBSIDY -2003.  

1.     Title :

i)                 These rules shall be called the "Rules for grant of Interest Subsidy -2003".

ii)               These rules shall be applicable to Small Scale Industrial (SSI) units which commence production between 1st April , 2003 and 31st March, 2007.

2.     Applicability :

Following categories of units shall be eligible to avail interest subsidy under these rules in respect of term loan availed by them for acquisition of fixed assets:

(i)              All new SSI units and all existing SSI units undertaking substantial expansion, modernization & diversification which commence production between 01.04.2003  and 31.3.2007 after completion of such investment in new unit or in expansion / modernization/diversification as the case may be.

(ii)             Sick industrial units availing additional term loan on or after 01.04.2003 for additional investment in fixed assets as a part of revival package approved by the financial institution.

3.     Quantum of assistance :

3.1           The eligible SSI units shall be entitled to interest subsidy @5% of term loan per annum for a period of 5 years from the date of availing the term loan from recognised financial institution.

Provided that the effective rate of interest after availing interest subsidy shall not fall below the Long Term Prime Lending rate of SIDBI reduced by 3 percent.

3.2           All eligible small scale industrial units in industrially back-ward areas shall be entitled  to additional interest subsidy @5% subject to the floor rate prescribed in proviso to para 3.1 above.

3.3           The interest subsidy will be limited to Rs 20.00 lakhs in case of Small Scale Units and Rs 10.00 lakhs in case of tiny units.

4.     Definitions :

4.1     New Industrial Unit means an industrial unit which has commenced production between1st April 2003 and 31st March, 2007 (inclusive of both dates).

4.2     Fixed Capital Investment means, investment in land and building, plant and machinery and other equipment of permanent nature which is eligible for subsidy under the Capital Investment Subsidy Rule - 2003 of new unit or for substantial expansion, modernization or diversification as the case may be.

4.3         Substantial expansion/ modernisation/ diversification (E/M/D) means  investment in fixed assets resulting in increase in the installed capacity of its existing products(expansion) or creation of production capacity of items not being now manufactured by the unit, without reducing the installed capacity of existing items(diversification) or technological up-gradation of the production process of the unit(modernization),

Provided that such investment should have been made under a separate Project Report approved by a registered Financial Institution/Bank and the production after completion of the E/M/D project has commenced between1st April 2003 and 31st March, 2007 (inclusive of both dates).

Provided further that the investment in plant and machinery of such project is at least 33% of the gross (undepreciated) value of plant and machinery of fixed assets of the unit as on date of commencement of investment in E/M/D project

4.4         Long Term Prime Lending Rate (LTPLR) of SIDBI means the long term prime lending rate declared by Small Industries Development Bank of India effective on the 31st March of the financial year to which the interest subsidy claim relates.

4.5         Industrially backward areas means areas listed as backward areas in Para 14.4 of the Industrial Policy 2001

4.6         Expressions not defined in these guidelines shall have the same meaning as assigned to them under the Industrial Policy, 2001 of Government of Orissa as amended from time to time.

5       Ineligible units :

Notwithstanding anything contained in these guidelines, the interest subsidy shall not be admissible to units declared as not eligible for incentives as industrial units under the Industrial Policy,2001 as listed under paragraph-3 of Schedule to the Industrial Policy, 2001 as amended from time to time.

 

6       Sanctioning Authority:

6.1           The Interest Subsidy under these rules shall be sanctioned by G.M of District Industries Center for units with fixed capital investment up to Rs 25.00 lakh and by the Director of Industries for all other cases.

 

7       Procedure for availing subsidy :

 

7.1      The entrepreneur shall apply for interest subsidy in the prescribed format (in duplicate) to the concerned DIC in Annexure-I within 120 days from the date of starting commercial production for the first year’s claim and the claims for subsequent years shall be filed within 90 days of ending of the financial year.

Provided that the time limit for eligible units which have commenced production prior to date of issue of these guidelines shall commence from the date of issue of these guidelines.

7.2       After receipt of the application from the entrepreneur, the G.M, DIC will send the same to the concerned financial institution/Bank for checking and furnishing the certificate of interest paid during the year in the prescribed format as in Annexure-II. After receipt of the said certificate, the interest subsidy sanction order shall be communicated by the DIC as in Annexure-III if the case falls within the sanctioning power of G.M, D.I.C.

7.3      In respect of other cases the DIC will forward the case records to the Director of Industries, Orissa along with certificate of Financial Institution/Bank within one month from the date of receipt of application from the entrepreneur.

7.4      The Director of Industries, Orissa will issue the release order to OSFC in respect of Tiny and above Tiny Sector as in Annexure-IV as per availability of funds.

7.5        After receipt of the sanction order from the Director of Industries, Orissa / General Manager, DICs as the case may be, the OSFC shall disburse the amount in shape of cheque/D.D. in favour of the unit through the Financial Institution / Bank concerned under intimation to the concerned DIC.

 

7.6    a)       The interest subsidy will be drawn by the Director of Industries, Orissa and will be placed with OSFC for its operation on behalf of Director of Industries, Orissa. The Director of Industries in consultation with OSFC and other Commercial Banks will estimate the requirement of funds every year and furnish the requisition for the amount to the Industries Department, at the time of formulation of budget estimates.

b)       The OSFC will maintain the proper accounts and registers for all disbursements made by them on this account for verification of auditors, Directorate of Industries/Accountant General, Orissa. At the end of each financial year the OSFC will furnish the utilisation certificate in OGFR-7(A) along with the list of beneficiaries disbursed with interest subsidy.

 

8       Miscellaneous :

8.1           The interest subsidy shall be disbursed by way of reimbursement only after the unit has paid the interest to the financial institution and has not defaulted in the repayment of term loan to the financial institution concerned up to the financial year to which the claim relates.

8.2           Interest for the period of construction and the period of moratorium shall be reimbursable after the closure of financial year in which the payment is actually made to the financial institution.

8.3           The entire amount of interest subsidy along with interest at the prevalent long term PLR shall be recoverable from the unit as arrears of public demand in accordance with the provisions of Orissa Public Demand Recovery Act, if it is found that the unit was not eligible to receive the subsidy or that the subsidy has been obtained by suppression of relevant information or submission of false information or by misrepresentation.

8.4        In case of any doubts or disputes regarding interpretation of provisions of these guidelines, the decision of Government in Industries Department shall be final and binding.

8.5            These rules supercede the operational guidelines issued vide letter no. XIV-HI-17/02-8578/I dt.7.5.2003 of Industries Department in respect of units eligible for assistance under these rules. However, the cases of units commenced production prior to 1.4.2003 shall be disposed as per the old guidelines referred above.

 

* * * *

 

 

Annexure-I

APPLICATION FORM FOR CLAIMING INTEREST SUBSIDY TO ENTREPRENEURS.

(To be submitted to the financial institutions/bank in duplicate)

 

1.

 

Name & address of the unit with PIN code, Telephone number.

:

 

 

 

 

 

 

2.

 

Type of organisation

:

 

 

 

(Proprietorship / Partnership / Company / Co-operative Society / any other.

 

 

 

 

 

 

 

3.

 

PMT Registration No. and date

:

 

 

 

 

 

 

4.

 

Date of first investment on fixed assets

:

 

 

 

 

 

 

5.

 

Amount of Term loan sanctioned for acquisition of fixed assets for new units / additional Term Loan for investment in EMD / Sick unit revival project.

:

 

 

6.

 

In case of EMD / Sick unit revival project -   investment in respect of fixed assets to be given as follows.

:

 

 

 

 

 

 

Investment on fixed assets

 

 

 

 

Before EMD / Revival Project

After EMD / Revival Project

 

 

 

a)

Land

 

 

 

 

 

 

b)

Building

 

 

 

 

 

 

c)

Plant & Machinery

 

 

 

 

 

 

d)

Other fixed assets.

 

 

 

7.

 

Date of sanction of  Term loan / Additional Term loan

:

 

 

 

 

 

 

8.

 

Rate of interest by FI/Bank

(during the financial year)

:

 

 

 

 

 

 

9.

 

Name & address of the financial institutions (who has sanctioned term loan)

:

 

 

 

 

 

 

10.

 

Amount of term loan / additional term loan disbursed till date

:

 

 

 

 

 

 

11.

 

Amount of term loan / additional term loan repaid till 31st March.

:

 

 

 

 

 

 

12.

 

Date of starting commercial production

:

 

 

 

 

 

 

13.

 

Interest subsidy availed by the unit so far  (Year-wise)

:

 

 

 

 

 

 

 

 

 

 

 

14.

 

Year of claim (Financial year starting from 1st April-31st March)

:

 

15.

 

Details of loan payment financial year-wise

:

 

 

 

 

 

 

 

 

 

1st

2nd

3rd

4th

5th

 

 

a)

Principal

 

 

 

 

 

 

 

b)

Interest

 

 

 

 

 

 

 

c)

Claim of interest subsidy

 

 

 

 

 

 

 

 

 

 

 

16.

 

State the amount of interest paid by the entrepreneurs to the FI/Banks during the year of claim.

:

_____________________________

                         

 

i)                 Submitted to GM/PM, DIC with a request to sanction interest subsidy in favour of my unit.

ii)                Certified that the facts and figures stated above are true to the best of my knowledge, I undertake to repay the subsidy with interest, if any, as stated above has been found to be false or mis-represented.

iii)        I/we am/are submitting herewith an affidavit non-judicial paper mentioning,

a)   That I/we have not defaulted to OSFC/IPICOL/SIDBI/Bank/Recognised Institution/other Government Agencies in connection with the unit for which the incentive is sought or for any other unit/activity with which I/We directly and indirectly associated.                     

b)   I/We have not applied/availed interest subsidy payable under any other scheme of either the State Govt. or the Central Govt. or any Financial Institution such as SIDBI/NABARD etc. 

c)   That any excess amount if paid in favour of me/my unit as interest subsidy will be refunded to Govt. Treasury under the appropriate head of account or in the manner as directed by the authority concerned.     

 

Signature of the claimant.

(with seal/ common seal of Company)

 

CERTIFICATE TO BE FURNISHED BY DIC 

            It is certified that M/s. _________________________________________________________ At_______________________ PO _______________________Dist._________________________ is eligible to get interest subsidy of Rs. _______________(in words) _______________ ____ ______ _______ __________________ for the year __________________ which 1st/2nd/3rd/4th/5th year of its commercial production for their New/ Modernisation project.  

            It is further certified that the total amount of interest subsidy sanctioned so far, is within the permissible limit of Tiny/above Tiny sector, as stipulated in IPR-2001. 

General Manager/Project Manager,

DIC. _______________________

            It is to be certified that M/s. ___________________________________________________ At ________________ PO _______________________ Dist _____________________ is eligible for additional interest subsidy @ 5% on term loan as Backward area development incentive for Rs.__________ (Rupees _____________ __________________________________________) only for the 1st, 2nd, 3rd, 4th, 5th year as new SSI/Priority sector industry/ New and existing SSI which has undertaken modernisation. The date of commercial production for the new unit/upgraded unit       being ______________________________________________.

 

            It is further to certify that the amount sanctioned is within the permissible limit as stipulated under IPR-2001.

 

 

General Manager/Project Manager,

DIC. _______________________


Annexure-II

 

CERTIFICATE TO BE FURNISHED BY THE FINANCIAL INSTITUTION / BANK

TO AVAIL INTEREST SUBSIDY

 

 

 

            Certified that M/s. ____________________________________________________________ Prop./Mng. Director/Mng. Partner of Sri _____________________________ At/PO______________  Dist. _________________ have been sanctioned a term loan of Rs. __________________________ (in words) ________________________________________________ for acquisition of fixed assets for their  *new/ modernisation project located at ____________________________________ District __________________. The date of sanction of term loan is date ___________________________ @ annual interest of ____________% and the date of disbursement of loan stated with effect from  dt.____________________. Further it is certified that the above unit has already paid Rs._________ (in words) ___________________________________ towards interest dues for the year _________. The unit has not defaulted in payment of his dues as per sanction order.

*           Strike out which is not applicable.

 

Signature & Seal of the

Financial Institution/Bank.

 

 

 


Annexure-III

 

SANCTION ORDER

 

Office order No. _______________________ dt.

 

            Sanction is hereby accorded for payment of interest subsidy for 1st/ 2nd/ 3rd/ 4th/ 5th year for Rs.___________________ (Rupees___________________________________________) only in favour of M/s. _______________________________________________________ Prop/ Mg. Partner / Managing Director____________________________________________  At/PO_______________________________ _______ Dist ____________________________ under the guidelines of Interest subsidy of IPR-2001.

 

 

Sanctioning Authority

 

Memo No. _________________/dt.

            Copy forwarded to M.D., OSFC, OMP square, Cuttack for information and necessary action. He is requested to disburse the amount sanctioned as interest subsidy in favour of unit after receipt of realse order from Director of Industries, Orissa.

 

 

 

 

Sanctioning Authority

Memo No. __________________/dt.

            Copy to the units/Financial Institutions/Bank/Director of Industries for information and necessary action.

 

 

Sanctioning Authority

Memo No. ___________________/dt.

            Copy to the Director of Industries, Orissa, Cuttack or the General Manager/Project Manager, DIC ____________________________ for information with reference to his letter No. ___________________dt.

 

 

Sanctioning Authority

Memo No. ______________/Ind., dt.

            Copy forwarded to the Addl. Secretary to Government, Industries Department, Bhubaneswar for information.

 

 

 

Sanctioning Authority

 

·                  Strike out which is not applicable.

 

 

 

 

 

 

Annexure-IV

 

OFFICE OF THE DIRECTOR OF INDUSTRIES:ORISSA:CUTTACK.

* * * * *

 

No. ___________/Ind., dt.

To

            The Managing Director.

            OSFC, OMP Square, Cuttack.

 

Sub:     Release of Interest Subsidy in favour of M/s. ____________________________.

 

Sir,

 

            The above captioned unit has been sanctioned interest subsidy of Rs.___________________ (in words____________________) for the year ___________ which is the 1st, 2nd, 3rd, 4th, 5th year vide sanction order No. _______________________       dt. ________________ of DI/GM/PM,    DIC ________________________.

           

You are requested to disburse the sanctioned amount in favour of the unit in shape of cheque/DD under intimation to this office.

 

Yours faithfully,

 

 

Director of Industries, Orissa.

Memo No. _____________/Ind., dt.

           

Copy to GM/PM, DIC, _________________ for information with reference to your sanction order No. ____________________ dt. __________________.

 

 

 

Director of Industries, Orissa.

 

Memo No. ______________/Ind., dt.

           

Copy to the unit for information and necessary action.

 

 

Director of Industries, Orissa.