Uttar Pradesh Handloom Credit Interest Subvention and Startup Seed Funding Scheme
This profile has been independently compiled from official gazette notifications and verified web domains. Source Authority Link: startup.up.gov.in Authority: Finance Department (Uttar Pradesh) • State/Region: Uttar Pradesh • Last Audited: 10 Sep 2026
Quick AI Summary
Provides interest subvention on working capital loans for handloom weavers and monthly sustenance allowance for DPIIT-recognized technology startups in Uttar Pradesh.
Detailed Summary
Scheme Overview
The scheme operates through two distinct verticals administered by the Directorate of Handlooms & Textiles and the UP Startup Cell under the Department of Infrastructure and Industrial Development. The Handloom vertical addresses credit cost barriers for traditional weavers, while the Startup vertical supports early-stage technology ventures.
Handloom Credit Support
Eligible weavers and handloom organizations availing working capital loans from scheduled commercial banks receive an interest subvention. The subvention caps the effective interest burden, ensuring affordable credit for raw material procurement and operational expenses.
Startup Sustenance Allowance
DPIIT-recognized startups headquartered in Uttar Pradesh receive a fixed monthly sustenance allowance for a defined period to support founder living expenses during the product development and validation phase. Disbursement is routed through the designated nodal agency upon quarterly verification of operational status.
Key Benefits & Financial Assistance
| Comparison Criteria | Benefits |
|---|---|
| Key Benefits |
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Eligibility Criteria Profile
| Comparison Criteria | Eligibility |
|---|---|
| Minimum Age Limit | 18 Years or above |
| Occupation Status | Self-Employed |
| Domicile State | Uttar Pradesh Domicile |
Application Process Guide
- Portal Registration: Register on the UP Startup Portal (startup.up.gov.in) for startup vertical or approach the District Handloom Office/Directorate of Handlooms for handloom vertical.
- Profile Creation: Complete entity profile with DPIIT recognition number (startups) or Weavers Registration details (handloom).
- Application Form Submission: Fill the prescribed online application form for Interest Subvention (Handloom) or Sustenance Allowance (Startup) with bank loan sanction details or incorporation certificates.
- Document Upload: Upload mandatory documents including Aadhaar, PAN, Bank Sanction Letter, Repayment Schedule, DPIIT Certificate, GST Registration, and Cancelled Cheque.
- Verification & Recommendation: Application verified by District Industries Centre (DIC) / District Handloom Officer and recommended to the State Level Committee.
- Approval & Disbursement: Upon approval by the State Level Sanctioning Committee, funds are released via DBT/PFMS to the beneficiary bank account.
Common FAQs regarding this Yojana
The scheme typically restricts eligibility to loans availed from Scheduled Commercial Banks and Regional Rural Banks. Loans from Cooperative Banks are generally not covered unless specifically notified by a subsequent Government Order.
The sustenance allowance is a grant-in-aid for operational support. Applicants are advised to consult a chartered accountant regarding tax implications under the Income Tax Act, 1961, as the department does not issue tax exemption certificates for this specific allowance.
Interest subvention is generally available for the tenure of the working capital loan or a maximum period specified in the governing Government Order (typically aligned with the crop/production cycle or annual renewal), subject to timely repayment and submission of utilization certificates.
Yes, receipt of external equity funding does not automatically disqualify a startup, provided it meets all other eligibility criteria including DPIIT recognition, UP domicile, age, and turnover limits. However, the scheme guidelines in force at the time of application prevail.
The scheme does not prescribe a specific annual income ceiling for individual weavers; eligibility is determined by valid registration with the Handloom Directorate and sanction of a working capital loan from an eligible lending institution.