Gujarat government’s five incentive schemes for manufacturing sector


The schemes aim to increase the contribution of the state’s manufacturing sector to GSDP from 27 per cent to 32 per cent by 2017

By EB Bureau

Monday, April 07, 2014: In an attempt to boost the manufacturing sector in the state, the Gujarat government has announced five incentive schemes to raise the sector’s contribution to the gross state domestic product (GSDP) from 27.6 per cent to 32 per cent by 2017. The state government has amended its Industrial Policy of 2009 to propose these five schemes.

Five incentive schemes


Interest subsidy scheme: A 7 per cent graded interest subsidy has been proposed for five years for medium scale and small medium manufacturing units. Besides, 2 per cent subsidy has been offered to big industrial units with actual investments of up to Rs 1000 million.

A Rs 5 million interest subsidy for big industrial units and a maximum interest subsidy of Rs 2.5 million per year for MSMEs have also been proposed.

Core infrastructure assistance scheme: The state government plans to support manufacturing units in building core infrastructure facilities within industrial parks. This would include internal roads, the water supply, power and communication. The support would be to the tune of Rs 200 million or 50 per cent of the total cost, whichever is less.

Assistance for common facilities: To build common facilities to test raw and finished material for the design and development of new technologies or processes, the government will extend 80 per cent of the total cost or Rs 100 million, whichever is less. This incentive will be offered to self-sustained projects, approved by a state level approval committee, and will be disbursed in four instalments.

Assistance for common

effluent treatment plants: The state government has also proposed support for common effluent treatment plants to the tune of 75 per cent of its total cost if the state receives additional funds from the Central government. If there is no support from the Centre, the support from the state government would be 40 per cent of the total cost.

Assistance for centres of excellence: State government institutions functioning under the public-private partnership model, industrial units and professional institutes will be eligible for this assistance. About 70 per cent assistance, including recurring expenditure, can be availed. For national level centres of excellence, the amount of assistance will be up to Rs 200 million while for international level centres of excellence, the limit will be Rs 300 million. Such centres of excellence must encourage innovation and entrepreneurship. 

Beneficiary sectors 
  • Automobile and auto components
  • Solar and wind equipment
  • Specialty and fine chemicals
  • Electronics system design and manufacturing

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