State Govt. Incentives

Fiscal incentives for Startup Units


Following fiscal benefits will be available to Incubators and Startup units

SN. Nature of Incentive Extent of Incentive
A Incubators
1. Capital Subsidy i) Govt. Host Institutes shall be provided capital grant of 100% of FCI subject to max INR 1 Cr for setting up of Incubator
ii) Private Host Institutes & Stand-alone Incubators shall be,provided capital grant of 50% of FCI subject to max INR 50 lakh for,setting up Incubato
2. Recurring Expense All approved Incubators shall get the support for recurring,Reimbursement expenses as Operational Subsidy assistance up to the limit,of INR 3 lakh per year for a period of 5 years
3. Mentoring & Training In order to provide mentoring for priority issues such as fund raising,,scaling, recruitment and product interface, Incubators shall be provided,Mentoring Assistance support up to a limit of INR 3 lakh per year for a,period of 5 years
4. Startup Competition To encourage entrepreneurship culture in colleges, Eligible Assistance:,Institutes of National Importance, State Universities & Central,Universities based in the State, established Incubators in these,institution’s premises shall be supported by state government to,organize such startup competition fest annually in which state shall,provide assistance up to the limit of INR 5 lakh per event.
B Startup Units
1. Interest Subsidy Eligible Startups shall be provided interest subsidy of 8% per annum for,a period of 5 years on the rate of interest paid on loans obtained from,scheduled banks/financial institutions subject to the maximum limit of,INR 5 lakh per annum
2. Lease Rental Subsidy Reimbursement of 25% of lease rental subsidy to eligible Startup units,established in the State, operating from Incubators/IT Parks/Industrial,Clusters or any other notified location shall be eligible for a period,of 1 year subject to the ceiling of INR 3 lakh per annum.
3. Seed Funding A Seed Grant up to INR 3 Lakh per start-up shall be provided for,validation of idea, prototype development, assistance towards travelling,costs and carrying out field/ market research/ skill training/,marketing and initial activities to setup a Startup etc. Seed funding to,Startups would be routed through State/Centre recognized Incubators.
4. Scale up Funding

The Government would create a corpus fund of INR 100 Cr dedicatedly for,category I funding to meet the funding requirement for scalability of,Startups. The salient features of the Fund would be as follows:

(a) It will have initial corpus of INR 100 Cr to be invested over a period of 5 years as the Alternative Investment Fund (AIF).

(b)The Fund would not invest directly into the Start-ups, but shall,participate with capital commitment in SEBI registered Category 1 AIF,Venture Funds.

(c) SIDBI would be professional fund manager for managing this Fund of,Fund & would empower their empanelled VCs to fund Punjab Based,Startups.

(d) The mandate would be given by state government to make 10%,contribution in the total corpus of the VC Fund subject to the condition,that VC invests twice the amount contributed by the State Government in,the Startups based in Punjab. The proportionate return or proceeds from,the Venture Funds shall be remitted back to the FoF. This returns along,with Capital gains shall be used to continue to fund Venture Funds to,continuously support rapidly growing start-up eco-system.

(e) The State Government in total would contribute 10 % of the funds,size to be raised by VC and it shall be released only when the VC makes,investment in Punjab based Startup.

All Startup units are also entitled to following incentives provided to MSME Units in Industrial and Business Development Policy 2017 of Government of Punjab

Sr. No. Nature of Incentive Extent of Incentive
1. Investment subsidy by way of intra-State sale Reimbursement of 100% of net SGST for 7 years from the date of commercial production with a cap of 100% of FCI.
2. Interest Subsidy on term loan in Border Districts and Kandi Area Interest,subsidy @ 5% pa only in Border Districts and Kandi Area subject to maximum of,Rs. 10 lakh per year for 3 years
3. Interest,Subsidy on term loan to SC Entrepreneur/ Women Entrepreneur Interest,subsidy @ 5% pa only to SC Entrepreneur/ Women,Entrepreneur subject to maximum of Rs. 10,lakh per year for 3,years
4. Additional,State Support of interest subsidy under Credit Linked Capital Subsidy Scheme,(CLCSS) of Ministry of MSME, GOI Interest,subsidy of 5% subject to maximum of 5 lakh per year for a period of 3 years,and shall not exceed amount of net SGST paid during the relevant year to such,units eligible under CLCSS scheme.
5. Additional,State Support of reimbursement of guarantee fee charged under Collateral Free,Credit Guarantee Trust for Micro and Small enterprises (CGTMSE) Scheme 100%,of guarantee fee to be reimbursed to micro and small enterprises subject to,maximum of Rs. 1 lac
6. Financial,assistance to SMEs for ‘Emerge’ exchange platform set up by NSE To make the SMEs available on the ‘Emerge’ exchange platform set up by NSE, the State will provide the following incentives:

  • 10% of the cost of Public Issue expenses, subject to maximum of Rs.2.50 lakh for registration of National Stock Exchange.
  • Direct subscription upto 10% of the Public Issue to be provided out of corpus to be created jointly with SIDBI, Nationalized banks & the State Government subject to a maximum of Rs. 10 lakh.
B. Access to Infrastructure
7. Exemption,from Electricity Duty 100%,exemption for 7 years
8. Exemption/Reimbursement,from Stamp Duty 100%,exemption/reimbursement from stamp duty for purchase or lease of land and,building
C. Access to Technology
9. Assistance,for Technology Acquisition 50% of,the cost subject to maximum of Rs. 25 lakh for adopting technology from a,recognized National Institute
10. Additional,support to ZED scheme of GOI. Reimbursement,of 50% of expenses subject to maximum of Rs. 5 lakh incurred on plant and,machinery/testing equipment for obtaining at least silver category status,under ZED scheme.
11. Reimbursement,of expenses incurred for Energy Audit/ Water Audit/ Safety Audit 75%,subject to maximum of Rs. 2 lakh for energy audit and maximum of Rs. 1 lac,each for water audit and Safety Audit
12. Assistance,for Environmental Compliance 50%,financial support subject to max of Rs. 25 lakh on capital cost for setting,up of effluent treatment plant and for installation of Air Pollution Control,Devices
D. Access to Market
13. Reimbursement,of expenses incurred for patent registration 75% of,the expenses subject to 10 lakh for domestic patent and 20 lakh for,international patent
14. Additional,Support for Performance and Credit Rating Scheme of Ministry of MSME Reimbursement,of 25% of the fee subject to maximum of 10 thousands
15. Reimbursement of expenses incurred on,quality certifications 100%,subject to maximum of Rs. 10 lakh
16. Design,Clinic Scheme Reimbursement,of the contribution of industries of Rs. 1 lac per program for design,awareness program by National Institute of Design, Ahmedabad
17. Vendor,Development Program,Assistance of INR 5 Cr to MSME Punjab for assisting the Industry in,organizing Vendor Development Programmes, Buyer – Seller meets, Reverse,Buyer-Seller meets.
18. Marketing,Support Assistance to MSME for showcasing their products at local, national and international event:

  1. @50% of total rent limiting to Rs. 10 lakh for participation of minimum 5 units in Punjab Pavilion in International Trade Fairs abroad
  2. @25% of total rent limiting to Rs. 3 lakh for Domestic Conferences and Trade Fairs.(c).,Nil for Pavilion at Progressive Punjab Events and Conferences
19. Freight,Assistance to Export Oriented Units 1% of,FOB value or actual freight paid from the place of Manufacture to the place,of shipment, whichever is less subject to maximum of Rs 20 Lac per annum
20. Annual,State Awards to MSME, SC, Women and Exporters Annual,award of Rs. 3 lakh per unit for excellence in productivity, quality, export,for each category of enterprise.