MSME Incentives under Viksit Gujarat Industrial Policy 2026
Under the Viksit Gujarat Industrial Policy 2026 (Government of Gujarat, 15 June 2026), micro, small and medium enterprises can combine a capital subsidy of 35% of eligible fixed capital investment in Category A talukas or 25% in Category B, an interest subsidy of 7% a year on the term loan for 5 years up to 10% of eFCI, and power tariff support of ₹2 or ₹1 per unit for 5 years up to 25% of eFCI, within an overall ceiling of 45% (Category A) or 35% (Category B). MSMEs in the five selected thrust sectors get 50% and 45%. EPF reimbursement for 5 years, electricity duty exemption, a 5-point ceiling addition for SC/ST entrepreneurs and an extra 1% interest subsidy plus rental assistance for women entrepreneurs come on top.
The policy adopts the revised MSME definition: plant and machinery up to ₹2.5 crore (Micro), ₹25 crore (Small) and ₹125 crore (Medium). The MSME scheme GR that will fix disbursement mechanics, caps and eligibility is awaited as of 18 September 2026; this page, by the Chartered Accountants at ADAPT & Associates LLP, Ahmedabad, quotes the policy document directly, compares it with the 2020 scheme, and includes an estimator built on the same figures.
MSME definition adopted by the policy
Micro: plant and machinery or equipment up to ₹2.5 crore. Small: above ₹2.5 crore up to ₹25 crore. Medium: above ₹25 crore up to ₹125 crore. Above ₹125 crore is a Large industrial undertaking under the GR of 8 September 2026.
Incentives for MSMEs (policy section 19)
MSMEs choose any combination of capital subsidy, interest subsidy and power tariff within the ceiling. The policy heads the capital column "Capital Subsidy on Term Loan" and footnotes "on term loan in case of MSMEs"; the 2020 scheme computed the subsidy on the term-loan amount, so a bank or FI term loan should be assumed necessary until the scheme GR clarifies.
| Taluka | Capital subsidy on term loan | Interest subsidy | Power tariff | Ceiling |
|---|---|---|---|---|
| Category B | Micro: 25% of eFCI in 1 year. Small and Medium: 25% of eFCI over 5 years | 7% on term loan for 5 years, up to 10% of eFCI | ₹1 per unit for 5 years, up to 25% of eFCI | 35% of eFCI |
| Category A | Micro: 35% of eFCI in 1 year. Small and Medium: 35% of eFCI over 5 years | 7% on term loan for 5 years, up to 10% of eFCI | ₹2 per unit for 5 years, up to 25% of eFCI | 45% of eFCI |
Selected thrust sectors: sports goods, toys, footwear, robots, drones (section 21)
| Taluka | Capital subsidy | Interest subsidy | Power tariff | Ceiling |
|---|---|---|---|---|
| Category B | 30% of eFCI over 5 years (Micro in year 1), on term loan | 7% for 5 years, up to 20% of eFCI | ₹1 per unit for 5 years, up to 20% of eFCI | 45% of eFCI |
| Category A | 35% of eFCI over 5 years (Micro in year 1), on term loan | 7% for 5 years, up to 20% of eFCI | ₹2 per unit for 5 years, up to 20% of eFCI | 50% of eFCI |
On top of the ceiling
EPF reimbursement: 100% of the employer's statutory contribution for 5 years, up to ₹1,800 a month (male), ₹2,500 (female) and ₹3,000 (specially-abled). 100% electricity duty exemption under the Gujarat Electricity Duty Act, 1958. SC/ST entrepreneurs: additional 5% of the overall ceiling under the Dr. Babasaheb Ambedkar Scheme and the Bhagwan Birsa Munda Scheme. Women entrepreneurs: additional 1% interest subsidy and rental assistance of 75% of rent up to ₹3 lakh a year for 5 years. Persons with disabilities: enhanced incentives. Cleaner production technology: 50% up to ₹1 crore for MSMEs. Zero liquid discharge: 50% up to ₹5 crore per MLD for MSMEs. International certification: 25% up to ₹10 lakh per certificate, maximum five. Named for MSMEs with amounts to follow: quality and ZED certification, ERP and ICT, technology acquisition, patents, energy and water savings, SME-exchange listing, power connection charges, rent for MSEs, exhibition assistance. Startups: sustenance ₹25,000 a month (₹30,000 with a woman co-founder), seed support up to ₹50 lakh, additional 1% interest subsidy.
What changed from the 2020 policy
| Item | 2020 scheme | 2026 policy |
|---|---|---|
| Taluka tiers | Category I, II, III over 251 talukas | Category A, B over 268 talukas |
| MSME definition (plant and machinery) | Micro ₹1 Cr, Small ₹10 Cr, Medium ₹50 Cr | Micro ₹2.5 Cr, Small ₹25 Cr, Medium ₹125 Cr |
| Capital subsidy | 25% / 20% / 10% of term loan, capped ₹35 L / ₹30 L / ₹10 L | 35% (A) / 25% (B) of eFCI, on term loan; no lakh cap stated |
| Interest subsidy | 7% / 6% / 5% for 7 / 6 / 5 years, capped ₹35 L / ₹30 L / ₹25 L a year | 7% for 5 years, up to 10% of eFCI (20% selected sectors) |
| Power tariff | None for MSMEs | ₹2 (A) / ₹1 (B) per unit for 5 years, up to 25% of eFCI |
| Combined ceiling | Component caps only | 45% (A) / 35% (B); 50% / 45% selected sectors |
| SC/ST entrepreneurs | +1% interest subsidy | +5 points on the overall ceiling |
| Women entrepreneurs | +1% interest subsidy | +1% interest subsidy; rent 75% up to ₹3 L a year for 5 years |
| EPF reimbursement | Not in the MSME scheme | 100% employer contribution for 5 years, capped per employee |
Status as of 18 September 2026: policy document issued 15 June 2026; taluka GR and Large, Mega and Ultra Mega GR issued 8 September 2026; MSME scheme GR awaited. Figures above are from the policy document and are labelled as such; the scheme GR may add per-year or absolute caps.
Source documents: Scheme GR IMD/WRT/e-file/9/2026/2320/I (PDF) and Taluka classification GR IMD/HMR/e-file/9/2026/2211/I (PDF), both dated 8 September 2026. Related: subsidy calculator, taluka category list, policy explainer.
Frequently asked questions
How much subsidy can an MSME get under Viksit Gujarat Industrial Policy 2026?
Capital subsidy of 35% of eFCI in Category A talukas or 25% in Category B, interest subsidy of 7% on the term loan for 5 years up to 10% of eFCI, and power tariff support of ₹2 or ₹1 per unit for 5 years up to 25% of eFCI, capped together at 45% (A) or 35% (B) of eFCI; 50% and 45% in the five selected thrust sectors. EPF reimbursement for 5 years and electricity duty exemption are additional.
Which units count as MSMEs under the 2026 policy?
Micro: plant and machinery up to ₹2.5 crore. Small: above ₹2.5 crore up to ₹25 crore. Medium: above ₹25 crore up to ₹125 crore. Above ₹125 crore is a Large industrial undertaking under a separate GR.
Has the MSME scheme GR been issued?
Not as of 18 September 2026. The taluka classification GR and the Large, Mega and Ultra Mega GR were issued on 8 September 2026; the MSME scheme GR is awaited and will fix disbursement, caps, eligibility and timelines.
Does an MSME need a term loan to get the capital subsidy?
The policy heads the MSME capital column "Capital Subsidy on Term Loan" and footnotes "on term loan in case of MSMEs". Under the 2020 scheme the subsidy was computed on the term loan amount. Until the GR clarifies, plan for a bank or FI term loan covering the investment to be subsidised.
What do SC/ST and women entrepreneurs get extra?
SC and ST entrepreneurs: an additional 5% of the overall ceiling under the Dr. Babasaheb Ambedkar and Bhagwan Birsa Munda schemes. Women entrepreneurs: an additional 1% interest subsidy and rental assistance of 75% of rent up to ₹3 lakh a year for 5 years.
How does this compare with the 2020 policy for MSMEs?
The 2020 capital subsidy was 25%, 20% or 10% of the term loan capped at ₹35 lakh, ₹30 lakh or ₹10 lakh; 2026 quotes 35% or 25% of eFCI with no lakh cap in the policy document. Interest subsidy moves from 7/6/5% for 7/6/5 years capped at ₹35 lakh a year to 7% for 5 years up to 10% of eFCI. Power tariff support is new. For a ₹10 crore project the 2020 capital subsidy maxed at ₹35 lakh; 2026 quotes up to ₹3.5 crore, subject to the GR.
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