Rajasthan Food Processing Subsidy — RIPS 2024 Package: 50% Capital Subsidy up to ₹1.5 Crore, 6% + 2% Interest Subsidy, SGST, Stamp Duty and Mandi Fee Relief
Video Explanation & Insights
Rajasthan food processing units: 50% capital subsidy up to ₹1.5 crore + 6% interest subsidy
4 videos on this topic
Rajasthan's package for food processors
Under the Rajasthan Investment Promotion Scheme 2024, the agro and food processing sector is a thrust sector with its own incentive menu. A unit that adds value to agricultural produce through machinery — milling wheat into flour, dalia and maida, sorting and grading grain, processing spices, oilseeds, dairy, fruit and vegetables, or making ready-to-eat foods — qualifies. The package has three kinds of support: asset-creation incentives on the investment, operating reliefs on taxes and duties, and turnover- and employment-linked incentives over ten years.
The headline benefit is the capital subsidy: 50% of the term loan taken for plant and machinery, capped at ₹1.5 crore, paid in ten equal annual instalments — ₹15 lakh a year at the cap. On a ₹3 crore plant loan the subsidy is ₹1.5 crore; on a ₹2 crore loan it is ₹1 crore. Alongside it runs an interest subsidy of 6% on the term loan, raised by a further 2% for MSME loans sanctioned after 8 December 2024, so an MSME unit effectively gets 8% of its interest back.
What a unit receives
| Incentive | Benefit | Notes |
|---|---|---|
| Capital subsidy | 50% of the plant and machinery term loan, up to ₹1.5 crore, in ten equal annual instalments | As explained in the channel's videos; the RIPS asset-creation incentive is 13%–28% of eligible fixed capital investment for larger units, graded by location, sector, investment and jobs |
| Interest subsidy | 6% on the term loan; plus 2% for MSME loans sanctioned after 8 December 2024 | Claimed on interest actually paid, on reimbursement basis |
| SGST reimbursement | 75% of state GST paid in cash for seven years from the eligibility certificate | On the SGST component deposited by challan, not the CGST; input-credit-adjusted tax does not count |
| Turnover-linked incentive | 1.2% to 2% of net sales turnover each year for ten years, graded by sector, location and employment | Net sales = gross sales less returns, discounts and GST |
| Electricity duty | Exemption for the eligible period | Applied at the Discom on the bill |
| Mandi fee | Exemption on purchase of agricultural produce | For processors buying from mandis |
| Stamp duty | 75% exemption at purchase or lease of land for the unit, with the remaining 25% reimbursed once the unit is set up | Eligibility certificate must be obtained before registration; land must not have taken the exemption before |
| Employment | Reimbursement of employer's PF / ESI contribution for seven years | For the workers on payroll |
| Land conversion | Exemption / concession on conversion charges for agricultural land used for the unit | Through the district collector |
Adding the central schemes
The state package works alongside the Ministry of Food Processing Industries' schemes. A micro unit with machinery up to about ₹28 lakh takes the PMFME grant of 35% up to ₹10 lakh; a larger unit applies under PM Kisan SAMPADA — CEFPPC gives 35% (50% for SC/ST and difficult areas) of eligible cost up to ₹5 crore, the Agro Processing Cluster scheme up to ₹10 crore, and integrated cold chain up to ₹10 crore. The rule of thumb is that the same rupee of machinery is not subsidised twice, so the central grant and the state capital subsidy are structured on the project cost before the DPR is written.
- •Micro units: PMFME 35% up to ₹10 lakh + RIPS interest subsidy and SGST reimbursement.
- •Small and medium units: CEFPPC 35%/50% up to ₹5 crore on eligible cost + RIPS capital subsidy on the loan component the grant does not cover + reliefs.
- •Clusters and cold chains: APC / cold chain grants up to ₹10 crore + RIPS operating reliefs.
Who qualifies
- •A new unit, or an existing unit expanding or modernising, in agro and food processing in Rajasthan — manufacturing that adds value to agricultural produce.
- •Udyam-registered MSMEs and larger enterprises; proprietorships, partnerships, LLPs, companies, FPOs and cooperatives.
- •Term loan from a bank or financial institution for plant and machinery (the capital and interest subsidies are loan-linked).
- •Application on the RajNivesh portal with the eligibility certificate obtained before benefits are claimed; stamp-duty exemption requires the certificate before registration.
- •Statutory approvals: FSSAI, Pollution Board consent, factory licence as applicable.
From project to payout
- 1Step 1 — Project structure: machinery list, cost and the central grant (PMFME / CEFPPC) fixed first; the term loan sized on the balance.
- 2Step 2 — DPR and bank sanction for the plant and machinery loan.
- 3Step 3 — RajNivesh application for the RIPS 2024 agro and food processing package; eligibility certificate issued.
- 4Step 4 — Land purchase or lease registered with the 75% stamp-duty exemption certificate; conversion and other approvals.
- 5Step 5 — Commissioning; entitlement certificate; annual claims for capital subsidy instalments, interest subsidy, SGST reimbursement, turnover and employment incentives for the ten-year period.
Rajasthan food processing subsidy: questions we are asked
50% of the plant and machinery term loan, up to ₹1.5 crore, paid in ten equal annual instalments — ₹15 lakh a year at the cap.
6% on the term loan, with a further 2% for MSME loans sanctioned after 8 December 2024 — effectively 8% for MSME units.
75% of the state GST paid in cash is reimbursed for seven years from the eligibility certificate. CGST and input-credit-adjusted tax are not covered.
75% is exempted at registration and 25% reimbursed after set-up, provided the eligibility certificate is obtained first and the land has not already taken the exemption.
Yes. PMFME (micro units) or PM Kisan SAMPADA's CEFPPC, APC and cold chain grants can be combined with the state package, structured so the same cost is not subsidised twice.
Yes — sorting, grading, cleaning and packing of produce with machinery is a food processing activity under the package, as the Q&A video explains for a Jaipur unit.
On the RajNivesh portal for the RIPS 2024 benefits, with the bank sanction and DPR; MoFPI schemes are applied for separately on the ministry's portal.