MSME
Gujarat MSME Policy 2026: Capital, Interest and Power Subsidies
Compare the 25 September GR’s Category A/B rates, Micro and Small/Medium annual limits, and worked examples of component and combined ceilings.
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What does the new Gujarat MSME GR provide?
The 25 September 2026 MSME GR permits capital subsidy, interest subsidy and power-tariff assistance within individual component limits, annual limits and a combined five-year ceiling. The general schedule's combined ceiling is 45% of EFCI in Category A and 35% in Category B. These are limits on admissible claims, not assured grants paid to every enterprise.
This guide explains Resolution IMD/WRT/e-file/9/2026/2630/CH, Viksit Gujarat Industrial Policy–2026: Scheme for assistance to MSMEs. Its operative period is 1 June 2026 to 31 May 2031. The GR issue date, policy period, eligible expenditure dates and commercial-production date serve different purposes.
Source: GR title and operative period, pp. 1–2; paragraph 4.2, pp. 11–12.
Who qualifies: not every business with MSME registration
Paragraph 1.1 concerns manufacturing, production, processing and job work of articles. Paragraph 1.2 uses gross fixed investment only in plant and machinery across all units in the country for the scheme-specific classification.
| Classification in this GR | P&M investment across all units |
|---|---|
| Micro | Up to and including ₹2.5 crore |
| Small | Above ₹2.5 crore and up to ₹25 crore |
| Medium | Above ₹25 crore and up to ₹125 crore |
No turnover threshold is stated in paragraph 1.2. Do not confuse this scheme-specific test with total project cost, EFCI or every requirement for national MSME registration. Status is decided at project completion. Registration alone does not establish eligibility for a service or trading business under this manufacturing package.
New, expansion and diversification projects must meet their respective definitions. Read the MSME EFCI and eligibility guide before applying the rates.
Source: paragraphs 1–3, pp. 2–10.
General MSME schedule: Category A versus Category B
EFCI percentages below are total component ceilings, not percentages paid every year. Interest uses a qualifying term-loan base, while power support uses eligible electricity units.
| Component | Category A | Category B |
|---|---|---|
| Capital subsidy | 35% EFCI | 25% EFCI |
| Capital disbursement | Micro: one year; Small/Medium: over five years | Micro: one year; Small/Medium: over five years |
| Interest subsidy | 7% for five years; total cap 10% EFCI | 7% for five years; total cap 10% EFCI |
| Power-tariff assistance | ₹2/unit for five years; total cap 25% EFCI | ₹1/unit for five years; total cap 25% EFCI |
| Combined five-year ceiling | 45% EFCI | 35% EFCI |
The enterprise can choose one component or a combination. Adding the component caps does not override the combined ceiling. Annual ceilings impose a further restriction.
Source: paragraph 4.2, pp. 11–12.
Annual ceilings: Micro differs from Small and Medium
| General schedule | Category A | Category B |
|---|---|---|
| Small/Medium, each of five years | 9% EFCI | 7% EFCI |
| Micro, year 1 | 37% EFCI | 27% EFCI |
| Micro, each of years 2–5 | 2% EFCI | 2% EFCI |
Source: paragraph 4.2(c)–(e), pp. 11–12.
Worked example: a Small enterprise with ₹4 crore EFCI
| Calculation | Illustrative limit |
|---|---|
| Capital: 35% × ₹4 crore | ₹1.40 crore over five years |
| Combined: 45% × ₹4 crore | ₹1.80 crore over five years |
| Annual combined: 9% × ₹4 crore | ₹36 lakh per year |
| Interest component: 10% × ₹4 crore | ₹40 lakh over five years |
| Power component: 25% × ₹4 crore | ₹1 crore over five years |
For one hypothetical claim year, assume a scheduled capital claim of ₹28 lakh, otherwise eligible interest assistance of ₹6 lakh and power assistance of ₹8 lakh. Their total is ₹42 lakh, restricted to at most ₹36 lakh by the annual combined limit. The ₹6 lakh restricted by that ceiling cannot simply be claimed in the following year.
The assumed ₹28 lakh capital instalment demonstrates the annual-cap interaction. It does not imply paragraph 4.2 expressly mandates equal annual instalments. Use the actual sanctioned instalment schedule.
The three overall component caps sum to ₹2.80 crore, but the combined ceiling remains ₹1.80 crore. Actual claims may be lower than every ceiling.
Source of limits: paragraph 4.2, pp. 11–12. Claim-year amounts are editorial assumptions.
Micro example: ₹1 crore EFCI
A general Category A Micro enterprise has a ₹35 lakh capital component, ₹37 lakh year-one combined ceiling and ₹45 lakh combined five-year ceiling. If the full capital claim qualifies in year one, only ₹2 lakh of theoretical headroom remains for other components in that year. Each subsequent year has a ₹2 lakh combined limit.
For the same assumed EFCI in Category B, the corresponding amounts are ₹25 lakh capital, ₹27 lakh year-one capacity and ₹35 lakh combined over five years. Neither example means the combined maximum is paid upfront as capital subsidy.
The MSME hub's ceiling explorer compares the schedules. It calculates limits only, not eligibility or actual cash receipts.
Interest subsidy: why 7% can produce less than seven percentage points
Eligible assistance concerns term-loan amounts actually disbursed for EFCI within the eligible investment period. NBFC loans are expressly excluded from this GR's term-loan definition. Undisbursed sanctions and ordinary working-capital facilities are not automatically eligible project borrowing.
Penal interest and other charges are excluded. Loan instalments and interest must be serviced regularly; default periods are excluded and deducted from the incentive period. A PEC/FEC is required before claiming.
The enterprise must bear at least 2% interest, including after any Central interest subsidy. Example: ₹1 crore outstanding for a full year at 8%, without repayments or Central assistance, produces ₹8 lakh gross interest. The minimum ₹2 lakh borrower burden limits possible assistance to ₹6 lakh, not ₹7 lakh. Component and annual ceilings can restrict it further.
The specified women-entrepreneur, registered manufacturing-startup and first-generation-entrepreneur categories receive 1% additional interest subsidy within the ceilings. The GR does not expressly permit a separate cumulative 1% for every overlapping qualification.
Source: paragraph 1.8, pp. 4–5; paragraphs 4.2(b) and 5.2, pp. 11 and 13–14.
Power assistance: eligible consumption, not the full electricity bill
Qualifying DISCOM power and renewable open-access consumption are covered subject to conditions. Own captive-power consumption is excluded from power-tariff assistance. Eligibility of captive equipment in EFCI is a separate issue.
Expansion/diversification support is for additional consumption, ordinarily supported by a sub-meter. The GR provides a specified historical-average fallback for Micro enterprises without one. Bills must be in the enterprise's name, with PEC/FEC before claims.
Source: paragraph 5.3, pp. 14–15.
Selected thrust sectors use an enhanced schedule
The named manufacturing sectors are sports goods/equipment, toys, footwear, robots and drones, plus later notified sectors. A startup, exporter or green-project label alone is insufficient.
| Selected-thrust schedule | Category A | Category B |
|---|---|---|
| Capital component | 35% EFCI | 30% EFCI |
| Interest | 7%; total cap 20% EFCI | 7%; total cap 20% EFCI |
| Power | ₹2/unit; total cap 20% EFCI | ₹1/unit; total cap 20% EFCI |
| Combined five-year ceiling | 50% EFCI | 45% EFCI |
| Small/Medium annual combined ceiling | 10% EFCI | 9% EFCI |
| Micro year-one combined ceiling | 38% EFCI | 33% EFCI |
| Micro annual ceiling, each of years 2–5 | 3% EFCI | 3% EFCI |
Read the selected-thrust guide for the separate stamp-duty, IPR, technology, certification, training, studio and limited AI-subscription provisions.
Source: paragraph 1.15, p. 8; paragraph 4.3, pp. 12–13.
Continuing conditions and claim preparation
The stated package includes 85% Gujarat-domiciled employment overall and 60% in managerial/supervisory positions, applicable GPCB certification and continued production. Renovation alone is not a qualifying expansion. Other State/sector incentives and Central combinations require component-level checks under paragraphs 2.2, 5 and 20. Breach can cause recovery with 18% annual interest from first availment.
Source: paragraphs 5 and 20–22, pp. 13–15 and 28–29.
Prepare the classification, taluka category, asset-wise EFCI, loan evidence and claim calendar before relying on projected incentives. Our Subsidy & Grants Advisory, Project Finance and MSME CFO support can help organise the workings. The competent authority decides eligibility and sanction.
Frequently asked questions
Is 45% the capital subsidy for every MSME?
No. In general Category A, it is the combined five-year ceiling. Capital has a separate 35% component, and all qualifying claims remain subject to annual limits and conditions.
Can an annual ceiling shortfall be carried forward?
The GR disallows carry-forward of incentives restricted by the annual ceiling. Do not move the unused annual amount into a later year's projection.
Is SGST reimbursement included in this GR's main schedule?
The supplied GR's main package is capital, interest and power assistance. Do not import an SGST schedule from an earlier policy; assess the previous-policy option separately.
Are applications confirmed open on the portal?
This guide establishes the supplied GR's rules, not a live portal-opening status. Confirm forms and implementation instructions with the DIC/MSME Commissionerate. Paragraph 22.5 permits separate guidelines.
Source and review boundary
Reviewed 26 September 2026 against the complete 32-page MSME GR issued 25 September 2026. Examples are hypothetical. This source is distinct from the 8 September Large/Mega GR and the June Startup India playbook. Later instructions, application acceptance and project-specific approval are not assumed.
This material is general information. Apply it to your business only after checking the relevant facts, source documents and requirements.