Motivation of Entrepreneurs and Financial Assistance for Rehabilitation of Sick Industries
Industries and Commerce Department, Government of Puducherry · Central government
Puducherry's scheme funds sick MSME units through subsidies and reimbursements for diagnostic studies, expert advice and rehabilitation finance interest.
Open, rolling. Applications are accepted continuously — there is no deadline.
Key facts
- Subsidy amount
- ₹50,000 – ₹10,00,000
- Instrument
- Subsidy
- Deadline
- Rolling
- Disbursement
- Reimbursed after spend
About this scheme
The Industries and Commerce Department of the Union Territory of Puducherry runs the "Motivation of Entrepreneurs and Financial Assistance for Rehabilitation of Sick Industries" scheme. Its purpose is to bring struggling Micro, Small, and Medium Enterprises (MSMEs) in the region back to health.
Industrial units classified as "sick" face operational and financial distress. The scheme extends financial assistance to such units so they can address those difficulties. Subsidies and reimbursements are provided to encourage these units to obtain expert advice and to arrange additional finance for their rehabilitation. This supports industrial growth and employment stability in Puducherry.
The scheme targets enterprises that, despite their difficulties, retain the potential to recover and keep contributing economically. It seeks to ease financial burdens and enable the strategic interventions that viable sick industries need in order to recover, continue operating, and remain part of the local economy.
Who can apply
- Eligible business forms
- Private limited company, Limited liability partnership, One person company, Partnership firm, Sole proprietorship
- Udyam registration
- Not specified
- MSME registration
- Required
- DPIIT startup recognition
- Not specified
- GST registration
- Not specified
- Where the business may be based
- Puducherry
- The applicant has to be an MSME unit holding UAM, EM (Part-II) or Permanent Registration. - The applicant has to qualify as a "Sick" Industrial Enterprise under the defined criteria, namely a continuous fall in gross output, delays in repaying loans, or erosion of net worth. - Firms that take over a sick unit for the purpose of rehabilitation also qualify.
How to apply
Applications are handled offline, so preparation and submission need particular care.
- Step 1: Get the application form. The sick enterprise should begin by downloading and printing the prescribed form from the Directorate of Industries and Commerce, Puducherry's official website. - Step 2: Fill in the application. Complete every mandatory field accurately. Collect and attach all supporting documents required, including MSME registration, financial statements setting out the sickness, rehabilitation proposals, and any other proofs specified. - Step 3: Submit the application. Send the completed, signed form together with all supporting documents to the Director of Industries. Submission may be made either in person at the Directorate's office or by post. - Step 4: Obtain acknowledgement. Ask the concerned authority at the Directorate for a receipt or acknowledgement confirming that the application package was received. This provides a record of your submission.
How applications are assessed
A State Level Committee carries out the appraisal. It weighs each application on its merits, examining the unit's sickness status, the rehabilitation plan put forward, and the likelihood that the unit can recover and keep operating. Financial assistance is sanctioned only after these factors are assessed together, so that support reaches units whose rehabilitation prospects are viable.
Frequently asked questions
Who is eligible to apply for this scheme?
MSME units registered under UAM/EM(Part-II)/Permanent Registration and classified as "Sick" Industrial Enterprises can apply, as can firms that take over a sick unit for rehabilitation.
How is "sickness" defined under this scheme?
An MSME is treated as sick when its gross output has fallen continuously across the last two financial years, when loan repayment has been delayed beyond 12 months, or when accumulated losses in the preceding accounting year have wiped out 50% of its net worth. These guidelines are subject to revision in line with RBI norms.
What is the maximum financial assistance available?
Under this scheme, an enterprise can receive up to ₹50,000 each towards diagnostic study subsidies and expert advice reimbursements, along with an interest subsidy of up to ₹3,00,000 per year for three years, giving a maximum total benefit of ₹10,00,000 (₹10 lakh).
Is the application process online or offline?
Applications are made offline only: download and complete the form, attach the required documents, then deliver it by hand or post to the Directorate of Industries and Commerce, Puducherry.
What types of financial institutions are involved in the interest subsidy?
The interest subsidy is routed through financial institutions such as PIPDIC, other Government Corporations, Scheduled Banks and Co-operative Banks.
Can I apply if my business is not yet incorporated?
No. Only MSME units already holding UAM, EM (Part-II) or Permanent Registration qualify, since the scheme applies to incorporated or formally registered businesses rather than pre-incorporation entities.
Sectors
- Msme
- Sick Unit
- Puducherry
- Rehabilitation
Details last verified on 18 September 2026. Source: the issuer's published information.