Government has notified the Scheme for Technology Acquisition and Development Fund (TADF) under the National Manufacturing Policy (NMP) to provide funding support to SMEs for the acquisition and development of clean and green technology. The Scheme is applicable to all existing and new Micro, Small and Medium Enterprises (MSMEs) including those in the National Investment and Manufacturing Zones (NIMZs) in respect of their investments made after notification of the Scheme.

The fund provides subsidy of upto 10% of capital expenditure incurred on new plant and machinery (on procuring plant and machinery) for manufacturing units for controlling pollution, reducing energy consumption and for water conservation, subject to a maximum of ₹ 50 lakhs.

The incentives consist of:

i. Five percent interest reimbursement of the nominal interest charged by lending agency;

ii. Ten percent capital subsidy;

iii. 25% grant to SMEs for expenditure incurred on Environmental and Water audits subject to a maximum of ₹ 1 lakh in NIMZs;

iv. Units practicing zero water discharge are eligible for 10% onetime capital subsidy on the relevant equipment/systems subject to actual usage for one year and third party certification; and

v. Access to the patent pool and/or part reimbursement of technology acquisition costs upto a maximum of ₹ 20 lakhs for acquiring appropriate technologies patented upto a maximum of 5 years generally, prior to the date of submission of the project.

This information was given by the Commerce and Industry Minister Smt. Nirmala Sitharaman in a written reply in Rajya Sabha today.

Technology acquisition funding for MSMEs enables capital subsidies, interest reimbursement, and patent cost support to promote clean manufacturing. The Technology Acquisition and Development Fund (TADF) provides MSMEs, including units in NIMZs, funding to acquire and develop clean and green manufacturing technologies for investments made after notification. Operative incentives include interest reimbursement by lenders, a capital subsidy for plant and machinery for pollution control, energy and water measures, grants for environmental and water audits in NIMZs, a one time subsidy for verified zero water discharge systems, and access to a patent pool or partial reimbursement of technology acquisition costs within specified ceilings.