UP govt announces interest subsidy for SSIs

Lucknow, Jan 19: In order to encourage Small Scale Industries (SSI) in Uttar Pradesh, the Mulayam Singh Yadav government today announced a small industry interest subsidy scheme under which entrepreneurs will receive five per cent subsidy on loans.

The decision to give the subsidy to the SSIs was taken by the state cabinet meeting chaired by state Chief Minister Mulayam Singh Yadav here.

The state government is expected to attract Rs 80 crore private investment due to the new scheme which is expected to set up 2,000 new SSIs in next five years.

According to the decision, any SSI unit would be elegible for the five per cent subsidy with a maximum of Rs 50,000 per year/per unit for next five years while the total subsidy should not exceed Rs 2.50 lakh for any unit in the stipulated time.

Officials said, the decision was made in the wake of interest rate of six per cent in the international market while it ranged between 11.5-12.5 per cent in the state presently.

The government has earmarked a financial burden of Rs 50 lakh under the scheme in the first year while it will increase to Rs 1 crore in the second, Rs 2 crore in the third, Rs 3 crore in the fourth and Rs 4 crore in the fifth and last year.

The scheme will be implemented from January 1, 2007 and new units would be benifited which would be set up under the rules and regulation of the state government. The SSIs taking loans from the financial institutions can take the benefit.

Sources said the new interest subsidy scheme will benefit 250 SSIs in the first two years while it will extend to 500 units per year after that. However, units set up under the Prime Minister Rozgar Yojna (PMRY) would not receive the benefit.

UNI