Personal Interest Subsidy Scheme — 4% Interest, Loans up to ₹5L — Frequently Asked Questions

It facilitates bank financing for a project costing up to ₹5,00,000. The support itself comes as an interest subsidy rather than a cash grant: the entrepreneur pays 4% annual interest, and the Government of Uttarakhand subsidises the remaining interest up to a maximum of 10%.

No. This is an interest subsidy delivered through a bank loan, so there is no equity dilution and no stake taken in your enterprise. You remain the sole owner of the business.

There is no fixed deadline. The scheme is rolling and always open, so you can submit your application at any time during the year through your District Village Industries Office.

You must be a permanent resident of Uttarakhand aged between 18 and 45. You should also fit one of the supported profiles — an educated unemployed youth who is no longer eligible for government service due to the age limit, someone trained by an ITI or a Polytechnic, a woman interested in self-employment, or a candidate who has passed Vocational Education at the 10+2 level with Village Industries as a subject.

The enterprise must be set up in a rural area of Uttarakhand. The scheme is designed around village industries that use locally available raw materials, so a rural location is part of the eligibility itself.

The published eligibility conditions for this scheme do not mention DPIIT recognition or MSME registration as a requirement. What they do set out are the age band of 18 to 45, permanent Uttarakhand residency, one of the qualifying promoter profiles, and a rural project location.

Applications are handled offline. Visit the Uttarakhand State Khadi and Village Industries Board website at http://www.ukvib.org, open the Schemes section, and go to the Personal Interest Subsidy Scheme page at http://www.ukvib.org/details.php?pgID=sb_9. Download the Application Form and the Claim Form, complete them, and submit the pack to your District Village Industries Office.

The application kit calls for proof of residency, age proof, education or training certificates, a project proposal and your bank details, along with the completed application form. The Claim Form is also part of the pack and is used later when claiming the interest subsidy.

It backs small-scale and village industries that can be built around locally available raw materials and the promoter's own working and resource capacity, set up in rural parts of Uttarakhand.

No prior experience is stated as a requirement. The scheme is aimed at educated unemployed youth and others moving into self-employment, so the emphasis is on the promoter's potential and on how well the project uses local resources.

It is run by the Uttarakhand State Khadi and Village Industries Board under the Government of Uttarakhand, and it was launched in 2016 to encourage rural entrepreneurship across the state.

Your District Village Industries Office screens the application first. A local committee of board officials, and sometimes other district administration representatives, then checks your eligibility, the viability of the project and the local availability of raw materials. Shortlisted applicants are helped with the bank loan application, and the subsidy is finally sanctioned once the bank approves the loan.