Revival and Rehabilitation Scheme, Kerala — ₹15L for Defunct MSMEs

The Revival and Rehabilitation Scheme is a Kerala government programme administered by the state's Directorate of Industries and Commerce. It was introduced in 2020-21 to pull non-operational manufacturing MSMEs — cashew processing units included — back into production instead of letting them be written off.

A growing pile of shut-down units has been a drag on Kerala's secondary sector. The scheme targets enterprises that stopped operating because of genuine problems somewhere in their value chain, yet still hold the fundamentals needed for a turnaround. Outdated technology, weak market reach, competition from large multinational players and wider global economic stress are among the pressures that push such units under. Cashew processing businesses in Kerala face an added squeeze — high operating costs inside the state combined with fierce international competition — and mechanising the processing line is treated as one of the main routes back to viability.

Support is packaged as a capital grant plus an incentive linked to working capital, wrapped into a single per-unit entitlement that a unit can draw only once. The intent is practical: repair the premises, upgrade or repair equipment, electrify the plant, and restart with a working-capital loan whose margin is partly covered. Applications are accepted round the year, with no fixed cut-off date.

• Up to ₹15 lakh per unit in capital grant and working capital margin support, claimable once
• For Kerala manufacturing MSMEs and cashew processing units that have been non-operational for 6+ months
• Renovation covered up to 25% of project cost (max ₹2 lakh); machinery and electrification up to 40% (max ₹8 lakh)
• Working capital margin capped at ₹2 lakh for MSMEs and ₹5 lakh for cashew units
• Rolling applications — no fixed deadline
• Amounts released through the applicant's bank on a pro-rata basis

Who can apply

• Manufacturing MSMEs of any kind, including cashew processing enterprises.
• Units located in Kerala — the scheme is run by the state's Directorate of Industries and Commerce.
• The unit must be defunct, meaning it has not operated for at least six months, and the shutdown must stem from genuine issues in its value chain.
• The applicant has to demonstrate a realistic potential for revival and rehabilitation, not merely an intention to restart.

Exemptions from the six-month rule

Two categories skip the minimum non-operational period: units that closed because of the plastic ban, and units that are applying in order to diversify.

One-time benefit

The assistance is available only once per unit, so the revival plan should be built to cover the full turnaround rather than a single repair.

Revival and Rehabilitation Scheme, Kerala — ₹15L for Defunct MSMEs is open to startups at any stage. It is open to startups registered anywhere in India.

Revival and Rehabilitation Scheme, Kerala — ₹15L for Defunct MSMEs accepts applications on a rolling basis — there is no fixed cut-off date, so eligible startups can apply at any time. Because rolling programmes can pause without notice, confirm the window is still open on the official site before you start.

Each eligible unit has a total entitlement of up to ₹15 lakh, claimable only once. Within that ceiling the support is split across three components.

• Building renovation — up to 25% of the revival project cost, capped at ₹2 lakh. Covers upkeep and repairs, new roofing, and infrastructure for waste disposal or treatment.
• Plant and machinery, plus electrification — up to 40% of the revival project cost, capped at ₹8 lakh. Can be used for new machinery, repairs to existing machines, and industrial electrification.
• Working capital margin — 50% margin support on a fresh working capital loan sanctioned by a financial institution, capped at ₹2 lakh for defunct MSMEs and ₹5 lakh for cashew processing units.

Added together, that works out to a practical ceiling of ₹12 lakh for a defunct MSME and ₹15 lakh for a defunct cashew processing unit.

The loan condition applies only to the working capital margin component. A unit does not need a bank sanction to claim the renovation, machinery or electrification grants. Sanctioned amounts are released to the entrepreneur through their bank on a pro-rata basis.

Revival and Rehabilitation Scheme, Kerala — ₹15L for Defunct MSMEs is offered by Directorate of Industries and Commerce, Government of Kerala, a government body. As a government-backed grant, it is publicly funded and open to eligible startups across India.

Before you apply to Revival and Rehabilitation Scheme, Kerala — ₹15L for Defunct MSMEs, keep the following documents ready:

• A pitch deck or short business plan describing the problem, product and traction
• Company registration documents and PAN
• Founder identification (PAN / Aadhaar) and brief profiles
• Recent financial statements or projections
• Product details — a demo, prototype or working link if available

Exact requirements are confirmed on the official application portal — treat this as a preparation checklist.

Revival and Rehabilitation Scheme, Kerala — ₹15L for Defunct MSMEs is best suited for startups in India seeking non-dilutive funding of ₹2L – ₹15L. If that describes your startup, review the eligibility criteria above before applying.