Motivation of Entrepreneurs and Financial Assistance for Rehabilitation of Sick Industries
Industries and Commerce Department, Government of Puducherry · Central government
Puducherry scheme subsidises diagnostic studies, expert advice, and rehabilitation finance interest for sick MSME units.
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 administers the "Motivation of Entrepreneurs and Financial Assistance for Rehabilitation of Sick Industries" scheme. Its purpose is to support the revival of Micro, Small, and Medium Enterprises (MSMEs) in the region that have been classified as "sick." The scheme provides financial assistance to help these units manage operational and financial difficulties.
Through subsidies and reimbursements, the scheme encourages sick units to obtain expert guidance and additional finance for their rehabilitation. It targets enterprises that show potential for recovery and continued economic contribution despite their current challenges. The objective is to ease financial burdens and enable the strategic steps needed for viable sick industries to resume normal operations and sustain their role in 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
- Applicant must be an MSME unit holding UAM, EM (Part-II), or Permanent Registration. - Applicant must qualify as a "Sick" Industrial Enterprise under the defined criteria (continuous decline in gross output, loan repayment delays, or net worth erosion). - Other firms taking over a sick unit for rehabilitation are also eligible.
How to apply
The application process is entirely offline, so you will need to prepare the paperwork carefully before submission.
- Step 1: Obtain the Application Form. Download and print the prescribed form from the official website of the Directorate of Industries and Commerce, Puducherry. - Step 2: Complete the Application. Fill in every mandatory field accurately. Gather and attach all required supporting documents, including MSME registration, financial statements that indicate sickness, a rehabilitation proposal, and any other specified proofs. - Step 3: Submit the Application. Send the signed and completed form, along with all enclosures, to the Director of Industries. You may deliver it in person at the Directorate’s office or send it by post. - Step 4: Obtain an Acknowledgement. Request a receipt or acknowledgement from the Directorate’s concerned authority to confirm that your application package has been received. This gives you a formal record of submission.
How applications are assessed
The State Level Committee reviews each application in detail. It assesses the unit’s sickness status, the proposed rehabilitation plan, and the likelihood of recovery and continued operation. Financial assistance is granted only after this full evaluation, so that support reaches units with a credible route to revival.
Frequently asked questions
Who is eligible to apply for this scheme?
The scheme is open to MSME units registered with UAM/EM(Part-II)/Permanent Registration that are classified as "Sick" Industrial Enterprises, and firms taking over a sick unit for rehabilitation are also eligible.
How is "sickness" defined under this scheme?
A unit is considered sick if its gross output has declined continuously over the previous two financial years, if loan repayment is delayed beyond 12 months, or if accumulated losses have eroded net worth by 50% in the last accounting year. These criteria may be updated in line with RBI norms.
What is the maximum financial assistance available?
The scheme provides up to ₹50,000 each for diagnostic studies and expert advice reimbursements, along with an annual interest subsidy of up to ₹3,00,000 for three years, for a maximum total benefit of ₹10,00,000 (₹10 lakh).
Is the application process online or offline?
The application process is entirely offline. Download the form, complete it, attach the required documents, and submit it in person or by post to the Directorate of Industries and Commerce, Puducherry.
What types of financial institutions are involved in the interest subsidy?
The interest subsidy will be disbursed 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, the scheme is limited to existing MSME units holding UAM/EM(Part-II)/Permanent Registration, which confirms a formally incorporated or registered business. Pre-incorporation entities do not qualify.
Sectors
- Msme
- Sick Unit
- Puducherry
- Rehabilitation
Details last verified on 3 August 2026. Source: the issuer's published information.