Puducherry Rehabilitation of Sick Industries Scheme — Up to ₹10L

The Rehabilitation of Sick Industries scheme is run by the Industries and Commerce Department of the Government of Puducherry. It is built for a specific kind of business: an MSME in the Union Territory that has slipped into serious financial distress but still has a realistic route back to health. Instead of letting such units fold, the scheme puts public money behind the two things they usually cannot afford — finding out what went wrong, and paying for the borrowing needed to fix it.

The design is straightforward. A struggling unit is helped with the cost of a diagnostic study, reimbursed for acting on professional recommendations, and given a subsidy on the interest it pays for fresh rehabilitation finance. Each of the three components has its own ceiling, and together they are capped at ₹10 lakh per unit.

Support flows through the state subsidy route, so a unit does not surrender any ownership or repay the assistance it receives. Applications are accepted throughout the year rather than in a fixed window, and cases are decided on merit.

Succession-style rescues are covered too. A separate firm that acquires a sick unit with the intention of reviving it can apply on the same footing as the original promoters.

• Up to ₹10 lakh per unit across three subsidy components
• 50% diagnostic study subsidy, capped at ₹50,000
• 50% reimbursement of expert advice, up to ₹50,000 per unit
• 5% per annum interest subsidy, up to ₹3,00,000 a year for three years
• Open to sick MSMEs in Puducherry, including firms that take over a unit to revive it
• Rolling applications — no deadline to meet

Two tests decide eligibility: the applicant must be a formally registered MSME, and the unit must qualify as a sick industrial enterprise under the scheme's own criteria.

• Registration: UAM, EM(Part-II) or Permanent Registration as an MSME.
• Sickness test — any one of these: gross output has declined continuously across the previous two financial years; loan repayments have been delayed by more than 12 months; or accumulated losses in the previous accounting year have eroded net worth by 50%.
• Takeover cases: a firm that takes over a sick unit for the purpose of rehabilitation is also treated as eligible.
• Not eligible: businesses that are not yet incorporated or formally registered. The scheme deals with existing units in distress, not with pre-incorporation ideas.

The sickness benchmarks may be revised to stay in line with RBI norms.

Puducherry Rehabilitation of Sick Industries Scheme — Up to ₹10L is open to startups at any stage. It is open to startups registered anywhere in India.

Puducherry Rehabilitation of Sick Industries Scheme — Up to ₹10L 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.

Support is split into three parts, each with its own ceiling. A single unit can draw on all three.

• Diagnostic study subsidy — 50% of the cost, capped at ₹50,000. This helps pay a technical institution to investigate the causes of the unit's sickness. Such studies are usually commissioned through financial institutions, banks or government bodies.
• Expert advice reimbursement — 50% of fees, capped at ₹50,000 per unit. This covers professional help in technology, marketing and finance, so the recommendations that emerge actually get implemented.
• Interest subsidy — 5% per annum, up to ₹3,00,000 a year for three years. It applies to additional finance disbursed by banks and financial institutions for rehabilitation. Across the full three years the interest subsidy can reach ₹9,00,000.
• Combined ceiling: a maximum benefit of ₹10,00,000 (₹10 lakh) per unit.

The interest subsidy is released through the lending institution — PIPDIC, other Government Corporations, Scheduled Banks or Co-operative Banks.

Puducherry Rehabilitation of Sick Industries Scheme — Up to ₹10L is offered by Industries and Commerce Department, Government of Puducherry, a government body. As a government-backed subsidy, it is publicly funded and open to eligible startups across India.

Applications are filed with the Director of Industries, who places them before a dedicated State Level Committee. There is no online portal and no multi-round screening; the form is submitted offline and the committee evaluates the case itself.

The committee examines three things in particular: whether the unit genuinely meets the scheme's sickness criteria, whether the rehabilitation plan submitted with the application is sound, and whether the unit has a credible chance of recovering and continuing to operate. Assistance is directed towards units judged to have a viable path back.

Because the decision is merit-based, the documentation behind the sickness claim and the revival proposal carries real weight.

Before you apply to Puducherry Rehabilitation of Sick Industries Scheme — Up to ₹10L, 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.

Puducherry Rehabilitation of Sick Industries Scheme — Up to ₹10L is best suited for startups in India seeking non-dilutive funding of ₹50,000 – ₹10L. If that describes your startup, review the eligibility criteria above before applying.