Punjab Startup Policy: Interest Subsidy Scheme

The Punjab Startup Policy, administered by the Department of Industries & Commerce, Government of Punjab (Startup Punjab), operates within the Invest Punjab framework. Its objective is to lessen the financial load on new enterprises through direct monetary assistance, supporting them from inception through growth phases. The policy identifies the cost of capital as a primary obstacle for young businesses and targets this issue specifically.

Under the Interest Subsidy Scheme, eligible startups can receive an annual interest subvention of 8% on term loans or working capital loans obtained from scheduled banks or registered financial institutions. The subsidy is limited to ₹5,00,000 per year, available for five years from the later of the policy implementation date or the loan disbursement date. Over this period, the cumulative support can reach ₹25 Lakh, making borrowing more economical and enabling startups to channel funds into expansion without the full weight of interest expenses.

Loan funds on which the subsidy is claimed must be directed towards core business operations, initial setup costs, or scaling activities. The subsidy is paid out annually, calculated against the interest actually remitted by the startup in that financial year. This disbursement structure ties relief to genuine loan servicing, supporting cash flow and financial steadiness.

The Department of Industries & Commerce, Government of Punjab, oversees this policy alongside the broader Invest Punjab initiative. Its responsibilities include fostering innovation, simplifying business procedures, and offering strategic assistance to entrepreneurs, with the aim of positioning Punjab as a viable location for new ventures.

- Submit your application via the dedicated Invest Punjab portal. This centralised online system streamlines the filing process and supports clear, efficient handling of submissions. - You must furnish the required documents: your DPIIT certificate, the bank’s official loan sanction letter, a detailed loan repayment schedule, and recent bank statements that clearly indicate the interest paid on the eligible loan. Complete documentation is necessary to confirm eligibility and determine the correct subsidy amount. - After verification and approval, eligible startups receive annual subsidy payments. These payments are computed directly from the actual interest amounts paid by the startup in the previous year, ensuring support that is precise and equitable.

Applications are submitted through the Invest Punjab portal along with the necessary documents. The eligibility of each applicant is checked against the paperwork provided, after which approval is granted for the yearly subsidy payments.