UP Capital Subsidy Scheme 2022 — ₹5 Cr to ₹210 Cr Per Year — Frequently Asked Questions

It is a capital subsidy offered by the Government of Uttar Pradesh as Option 1 of the Investment Promotion Subsidy under the Uttar Pradesh Industrial Investment & Employment Promotion Policy 2022. Its purpose is to encourage industrial units to set up or expand operations in the state by offsetting a portion of their capital expenditure. The wider policy also aims to draw investment into Uttar Pradesh and create employment.

The Base Capital Subsidy is 10% to 30% of Eligible Capital Investment. The annual ceiling runs from ₹5 crore to ₹150 crore depending on the project category and region. If a Mega or above project also qualifies for the Employment, Exports and Ecosystem boosters, the annual ceiling can stretch to as much as ₹210 crore.

Eligible Capital Investment (ECI) is the capital base on which your subsidy percentage is calculated. The yearly amount you receive is then multiplied by a Gross Capacity Utilisation Multiple (GCM), which means the payout moves with how much your plant is actually producing. A unit that runs below its rated capacity earns less in that year than one that runs at full utilisation.

Industrial undertakings in the Large, Mega, Super Mega and Ultra-Mega project categories. Eligibility is set by the scale of the investment, so a unit needs to reach one of those tiers in terms of committed eligible capital investment in Uttar Pradesh. The scheme details do not list any separate sector-wise, entity-type or founder-based restrictions.

Broadly speaking, no. The scheme is written for industrial undertakings, and the four eligible categories — Large, Mega, Super Mega and Ultra-Mega — describe ventures making significant new investments rather than early-stage companies. A startup would generally have to scale up to one of those project definitions before it could apply.

No. This is a subsidy, not an equity investment, so it does not dilute the promoter's shareholding. It is a cash incentive paid out against eligible capital investment and operational performance, not a lending product that has to be repaid.

It is paid in yearly instalments spread over 10 to 20 years. Each year's disbursement is subject to the applicable annual ceiling and is adjusted by the Gross Capacity Utilisation Multiple. Payments begin after approval and are released against agreed milestones and the unit's capacity utilisation data.

Projects in the Mega category and above can access additional Capital Subsidy 'Boosters' in three areas: Employment, Exports and Ecosystem development. Each booster is worth 2–4% of Eligible Capital Investment. Taken together with the base subsidy, they can lift the annual ceiling up to ₹210 crore.

No. The scheme runs on a rolling basis, meaning there is no fixed closing date and applications can be submitted at any time through the official channel.

Applications go through the official state portal or the designated agency of the Government of Uttar Pradesh, which is typically Udyog Bandhu or the Department of Industrial Development; the online portal is at https://niveshmitra.up.gov.in/. You will generally need a detailed project proposal, your investment plans and proof of eligible capital investment, and your project must be registered with the state government. Once payments begin, you are also expected to supply capacity utilisation data for each annual disbursement. Applicants should read the full Uttar Pradesh Industrial Investment & Employment Promotion Policy 2022 document for the exact instructions and forms.

No. DPIIT (Startup India) recognition is not listed as a mandatory requirement for UP Capital Subsidy Scheme 2022 — ₹5 Cr to ₹210 Cr Per Year, though having it can strengthen your application and unlock other benefits.