Government of Punjab

Department of Industries & Commerce

4) Scheme for grant of Capital Subsidy to new small scale industrial units in Border areas.

Introduction: Whereas, with a view to facilitate the development of Industry in the State,
Government of Punjab have notified the “Industrial Policy – 2003” vide No. 5/58/2002/IIB/968
dated 26.03.2003, which inter-alia provides for grant of Capital Subsidy to new small scale
industrial units in Border areas.

Now, therefore, to implement the scheme of Capital Subsidy, set out in the aforesaid policy, the
Governor of Punjab is pleased to notify detailed scheme as under:-

1. SCHEME

For the development of Border Areas, State Government will provide capital subsidy to new Small
Scale Industrial units, except those in negative list at Annexure-I, set up in the Border areas. The
quantum of subsidy will be to the extent of 30% of the Fixed Capital Investment upto maximum of
Rs.30 lac per unit.

2. BUDGETARY ALLOCATION

For this purpose, budgetary allocation upto Rs.25 crore per annum would be made to Industries
Department by State Government, which shall be released on quarterly basis. In case at the end of
the quarter, the number of units to be covered under the scheme during that quarter is more than the
quarterly budgetary allocation, the amount of subsidy shall be reduced on pro-rata basis and
disbursement made accordingly at the end of the quarter. The unutilised funds, if any, of the
quarter will be carried forward to the next quarter. But there will be no carry forward of balance
funds, if any, at the end of year to next financial year.

3. DEFINITIONS

3.1 "Government" means the Government of Punjab in the Department of Industries & Commerce.

3.2 'Director' means the Director of Industries, Punjab.

3.3 'District Officer' means the General Manager of District Industries Centre or any other officer
nominated or designated by the Government/Director to perform the duties of the district officer,
for the purpose of these rules.

3.4 'The New Unit' means a unit that has come into commercial production on or after the 1st of
April, 2003, and has been set up by installing plant and machinery at an independent and distinctly
separate area, may be in the same premises, irrespective of the fact that the new unit is in the same
line of manufacture as the existing one, owned by the same management.

3.5 'Fixed Capital Investment' (FCI) means investment made on land, building, plant & machinery
and other items as indicated below by a new unit :-

- Land
Actual expenditure incurred on the purchase of land including registration charges and land
development charges not exceeding 10% of the cost of land.

- Building

Actual expenditure on building but excluding labour quarters.

- Plant & Machinery

'Plant & Machinery' means new plant and machinery installed by the unit for the manufacture of
items for which it is set up, provided that the old or re-conditioned plant and machinery directly
imported and installed by a unit shall also be deemed to be new plant and machinery. Actual cost of
plant and machinery will include the basic price of plant and machinery which, in case of imported
machinery, will include freight charges from the port of arrival till destination and installation
charges in addition to the C.I.F. value of such plant & machinery, provided that the freight and
installation charges would be limited to 10% of the basic price.

- Other Items

• Cost of Generator set.

• Any amount paid by the unit to PSEB for installation of private transformer.

• Actual cost of weigh-bridge and laboratory equipment.

• Actual cost of Dies, Moulds, Jigs and fixtures.

3.6 'Commercial Production' means commencement of commercial sale of product for which the
unit has been set up.

3.7 'Financial year' means the year beginning from 1st April to 31st March.

3.8 ‘Border Areas’ means the revenue Districts of Amritsar, Gurdaspur and Ferozepur.

3.9 ‘Negative List’ means the list of items at Annexure-I.

3.10 'Project Report' means a document, depicting physical and financial projections relating to
the unit, duly appraised and approved by a financial institution or a scheduled bank while
sanctioning term loan and / or working capital limit. In case of units which had neither availed
term loan nor working capital, such document shall be appraised and approved by Punjab State
Industrial Development Corporation.
3.11 'Small Scale Unit' means an industrial unit falling within the definition of such unit as given
by the Central Government and registered as such with the department of Industries, Punjab.

4 COMMENCEMENT AND APPLICABILITY

The scheme shall come into force with effect from 1st April, 2003 and shall be applicable to such
of the units which come into production, for the first time, on or after 1st April, 2003.

5 ELIGIBILITY FOR INCENTIVES

Those units which do not have their own land and building, incentive would be allowed, if such
units have lease/rent deed/ building occupied by them for a period not less than 10 years.

6 GRANT OF SUBSIDY

6.1 Eligible Fixed Capital Investment

The total fixed capital investment for the purpose of calculation of subsidy shall ordinarily be
restricted to the project cost as approved by the Financial Institution/ Scheduled Bank. However,
any portion of this Project cost which is incurred even after the commencement of commercial
production shall be taken as FCI provided this expenditure is justified & certified by the Financial
Institution / Scheduled Bank. In case of self financed units, a certificate of expenditure as reflected
in the project report from the PSIDC shall be obtained. Further, any expenditure over & above the
Project cost as originally appraised by PSIDC/financial institution/Bank shall also be taken as FCI
provided this additional cost has been financed & certified by financial institution/bank or
otherwise appraised by PSIDC in case of self-financed units and has been incurred before the
commencement of commercial production.

6.2 Procedure

i) Application in Form I (a) for the grant of Capital Subsidy along with documents listed therein
would be submitted to the District officer within the time frame prescribed in the Para 6.3 below.

ii) General Manager, District Industries Center or a Gazetted Officer nominated by him will receive
the application. The application would be checked then and there and deficiencies, if any, would be
pointed out to the applicant in writing within a period of 7 days and the applicant would also be
given a definite time period not exceeding 4 weeks to rectify the deficiencies so pointed out.

iii) In case the deficiencies are not removed within the specified time as mentioned above,, the
claim would be filed by the General manager, under intimation to the party through a registered
AD, a copy of which would be sent to the Directorate.

iv) The case so filed may be re-opened with the orders of Director of Industries, provided request
for the same is received within a period of 2 months from the date of filling the claim by the
General Manager. For period exceeding 2 months, the case would be re-opened with the orders of
Principal Secretary Industries & Commerce, if the request for the same is received within a period
of 4 months from the date of filing the claim by the General Manager.

v) The cases involving grant of Capital Subsidy to a unit upto Rs. 5.00 lakh shall be sanctioned by
the District Officers within a period of 7 working days from completion of the claim.

vi) Cases where the amount of Capital Subsidy exceeds Rs. 5 lakh shall be processed and sent to
the Directorate within a period of 7 working days after completion on single file. The cases so
received would be put up for consideration and sanction before the Committee consisting of
Director of Industries, Industrial advisor-cum-Additional Director, Chief Coordinator, Udyog
Sahayak, concerned Joint Director/Deputy director and representative of the financial Institution/
bank. The committee would meet once in a month or earlier, if required.

vii) Sanction / Rejection letter will be issued to the unit immediately on approval of minutes of the
meeting / approval by the District Officer in the format I(f) / I(g). as the case may be.
6.3 Time Limit

A unit shall forfeit its entitlement to the grant of Capital Subsidy, if it does not submit its claim,
complete in all respects, within 3 months of its coming into commercial production.

6.4 Disbursement

Disbursement of all sanctioned cases shall be made from the Directorate on quarterly basis. In case
the total sanctioned amount during the quarter is more than budgetary allocation for the quarter, the
per unit sanctioned subsidy amount shall be reduced accordingly on pro-rata basis.

6.5 Interpretation / Relaxation / Amendment of Rules

Principal Secretary, Industries & Commerce shall be competent to interpret / Relax / Amend Rules
under this scheme.

6.6 Appeals

(a) Appeals, against orders passed by the General Manager, District Industries Centre, under these
rules, shall lie with the Director of Industries.

(b) Appeals against the orders passed by the Director of Industries, under these rules, shall lie
with the Principal Secretary Industries & Commerce and orders passed by Principal Secretary
Industries & Commerce shall be final.

(c) Appeals mentioned in Rule 6.5 (a) and 6.5 (b) shall be filed within a period of 30 days from
the date of communication of orders appealed against.
6.7 Review

No officer except Principal Secretary Industries & Commerce shall review his / her own orders.
However, an officer one rank higher than the officer who passed the orders shall have the power to
review such orders suo-motto or on a reference made to him by the party or the competent officer
below him.

7 PENAL ACTION

In case it is found at any stage that the unit has claimed subsidy on the basis of wrong facts, the unit
shall, beside refunding subsidy and facing legal action, be debarred from grant of any incentives /
assistance from the Government.

K.R. Lakhanpal
Principal Secretary to Government, Punjab
Department of Industries & Commerce

No.5/58/2002/IIB/ Dated : March, 2003

A copy is forwarded to the Controller, Printing & Stationery, Punjab, Chandigarh with the request
that the above notification may be published in the Punjab Government Ordinary Gazette and
twenty spare copies of the same be supplied to this department of Government.

(Amrit Lal Garg)

Additional Secretary to Government of Punjab

No. 5/58/2002/IIB/ Dated: March, 2003

A copy is forwarded to the Accountant General, Punjab, Chandigarh for information & necessary
action.

(Kashmir Singh Pannu)

Superintendent

No. 5/58/2002/IIB/ Dated: March, 2003

A copy is forwarded to the Director of Industries & Commerce, Punjab, Chandigarh.

He is requested to send a copy of notification to all concerned Departments / Agencies /
Organisations.

( Kashmir Singh Pannu)

Superintendent
 ANNEXURE-I
NEGATIVE LIST OF INDUSTRIES

1. Rice, Pulse and Cereal Mills.

2. Mere Bottling of Aerated Waters, Soft Drinks and Alcoholic Drinks.

3. Decorating, Expelling, Crushing, Roasting and Frying of Oil Seeds.

4. Wire Drawing of Steel and Stainless Steel and Bright Bars Manufacturing.

5. Bricks and Brick Tiles, excluding Ceramics, Vitreous and PVC Tiles.

6. Conduit Pipes and manually welded furniture, except ERW and Seamless Pipes.

7. Lime Kiln.

8. Stone Crushers

9. Bus / Truck Body and Cargo Boxes Manufacturing.

10. Refining and hydrogenation of edible oils, including manufacture of Vanaspati.

11.Distilleries & Breweries.

12.Tobacco and Gutka.

 Form I (a)
[Clause 6.2 (i)]
(to be submitted in duplicate in the office of the General Manager concerned)

Form of Application for the Grant of Capital Subsidy to the New Small Scale Units in Border
Areas

1. Name and address of the unit:

2. Location:

(i) Village / Town

(ii) District

3. Constitution of the unit

(Proprietorship/partnership/limited company)

4. Item manufactured:

5. Registration No. and Date

6. Date of going into commercial production.

7. Means of finance

(i) Bank

(i) Financial Institution

(iii) Own resources

(iv) Other (shares/debentures/bonds etc.)

8. Total fixed capital investment:

Item
Period of investment
Amount

i) Land

ii) Building

iii) Machinery
iv) Machinery installation charges
Total

9. Amount of subsidy claimed:

10. Documents attached:

(i) Copy of SSI registration certificate

(ii) Conveyance deed/Rent deed/Lease Deed of the land under the unit

(iii) Attested copy of certificate in Form A and Form C issued by Registrar of Firms & Societies,
Punjab, along with a copy of Partnership Deed or Certificate of Incorporation of the company in
case of limited companies

(iv) Special Power of Attorney/Resolution of Board of Directors of the company in Form I (b) /
I(c).

(v) Project Report approved by the financial institution/bank.

(vi) Certificate from financial institution/bank concerned in Form 1(d) indicating its following
details:

(a) Amount term loan and / or working capital loan sanctioned.

(b) Amount of term loan and / or working capital availed.

(c) Date of sanction and availment of loan

(d) Date of commencement of production.

(e) Whether the Plant & Machinery is new and / or second hand imported.

(f) Fixed capital investment on land / building and plant & machinery installed in the unit as on
date and till the date of production.

(vii) Copy of audited balance sheet of the previous year

(viii) Detailed bill-wise, item-wise, expenditure statements of fixed capital investment shown in
column 8 above

(ix) Affidavit in Form I (e)

Dated:

Signature of the applicant(s)

or
Authorised attorney with complete address
 Form I (b)
Certificate from Bank / Financial Institution

Certified that M/s ________________________ have been sanctioned term loan / working capital
of Rs. ___________________ vide our letter No. _______________________ dated
_______________ .

Against the sanctioned loan of Rs. _______________ the party has availed Rs.
____________________________ loan till (date) _____________ .

Following investment has been made by the party with this amount till the date of
commencement of production, which is in tact in the premises of the unit:-

(i) Land

(ii) Building

(iii) Plant & Machinery

(iv) Other items

The investment made by the unit is justified and the unit is viable.
The plant & machinery installed by the unit is new and / or second hand imported.
The date of commencement of commercial production after making above investments is
__________________.

Signatory with name and designation

 Form I (c)
Special Power of Attorney

Know all men by whom these present that we (i) _______________________________son of Mr.
_____________________ (ii)__________________son of Mr._____________________________
partners of M/s.________________________ are much engaged in and pre-occupied in our
business. We therefore, jointly and severally do hereby assign, constitute, nominate and appoint our
one of the partners Mr ______________, son of Mr.________________________to act for and on
our behalf jointly as well as severally as our lawful special attorney.

2. We fully authorise our above mentioned special attorney to file all essential relevant documents
required for the receipt of investment/modernisation incentive admissible under the Industrial
Policy, 2003, in the office of the General Manager, District Industries Centre and the Director of
Industries, Punjab, Chandigarh, for and on our behalf jointly and severally to conduct enquiry,
make application(s) and affidavit(s) to execute enquiry, any or all documents required for the
receipt of above said incentive. He is further authorised to receive the incentive amount from the
concerned bank/financial institution/Department of Industries and to issue actual payees receipt at
the time of disbursement of incentive amount. And to do all acts, deeds and things whatsoever our
above and special attorney deems fit, proper and advisable.

3. All the acts, deeds and things done by our said Special Attorney shall be binding on each of us
both jointly and severally and it will be construed that we have done the said personally.

4. In witness thereof we set our hands on this date_____________ at ____________________

Witnesses: Executant

1. ____________________________

2. ____________________________

3. ____________________________
 Form I (d)

Copy of the Resolution Passed in the Board of Directors Meeting Held on __________ at the
Registered Office of the Company

Resolved unanimously that Mr _____________________, Director of the Company, be and is

hereby authorised to file any document/affidavit or give any undertaking for filing the claim and
receiving the money from the Government with respect to investment incentive/modernisation
incentive applicable to us as per Punjab Industrial Policy, 2003, in the office of the General
Manager, District Industries Centre and the Director of Industries, Punjab, Chandigarh, for and on
behalf of the Company to conduct enquiry, make application(s) to the above office for the
development of the industrial unit. He is further authorised to receive the investment incentive of
Rs_________ (Rupees __________________________ only) from the bank/financial
institution/Department of Industries and to issue the actual payees receipt at the time of
disbursement of incentive amount and to do all acts, deeds and the things whatsoever he may deem
fit, proper and advisable.

2. He will be the authorised signatory of the company with regard to all matters pertaining to or
arising out of the availment of incentives. All the acts, deeds and things done by him shall be
binding on the Company.

Specimen signature (attested) Chairman/Managing Director

 Form I (e)
Affidavit

I, _________________________________, do hereby solemnly state that I am

proprietor/partner/director of M/s ________________________________ and that date of
production of unit is ______________________ and fixed capital investment made in this unit is
Rs. _______ as per details given below:-

i) Land

ii) Building

iii) Plant & Machinery

iv) Other items

2. I do hereby affirm that the Plant & Machinery installed in the unit is new and / or second hand
imported.

3. I do hereby undertake to refund the entire amount of Subsidy of Rs.______________ (Rupees

__________________________________) granted to me, besides facing legal action in case these
facts are proved to be wrong at any stage.

4. I further undertake that I have not availed subsidy under any other scheme of Government of
India / State Government.

Signature of applicant

Verification

The contents of this affidavit are true to the best of my knowledge and belief and nothing has been
concealed therein.

Signature of applicant
 Form I (f)
Sanction Letter
(Head office Level cases)
From
Director of Industries & Commerce,

Punjab, Chandigarh.

To
M/s. _________________________

_____________________________

_____________________________

Memo No.

Dated:

Reference your application dated: ___________ for sanction of capital subsidy.

Your case was considered by the State Level Committee in its meeting held on ____________ and
the claim for capital subsidy of Rs.__________ has been sanctioned / rejected due to reasons given
in the Annexure.

However, the amount of subsidy can be reduced at the time of disbursement as provided in Clause
2 and 6.4 of the scheme.

For Director of Industries & Commerce.

Endst. No. Dated:

A copy is sent to the concerned G.M., D.I.C.

 Form I (g)
Sanction Letter
(District Level cases)
From
General Manager,
District Industries Centre,
_________________
To
M/s. _________________________

_____________________________

_____________________________

Memo No.

Dated:

Reference your application dated: ___________ for sanction of capital subsidy.

Your case was considered by the State Level Committee in its meeting held on ____________ and
the claim for capital subsidy of Rs.__________ has been sanctioned / rejected due to reasons given
in the Annexure.

However, the amount of subsidy can be reduced at the time of disbursement as provided in Clause
2 and 6.4 of the scheme.

For General Manager

Endst. No. Dated:

Note : For details please refer to NOTIFICATION Dated: 2.4.2003 No. 5/58/2002/IIB/1060 :