VYUPY provides term lending of up to ₹2 crore through banks and financial institutions, with the State paying a margin money grant and an interest subsidy on top. It covers new units and also expansion, diversification or modernisation of existing ones. The conditions that decide most claims are the land cap, the three-year operating requirement, and a five-year bar on having taken another capital or interest subsidy.
At a glance
| Operative period | From the date of notification until 31 March 2029 |
| Administering department | Industries & Commerce (Group-2) Department, Government of Rajasthan |
| Notification | प. 1(6) उद्योग / ग्रुप-2 / 2025/06495 |
| Who it covers | Individuals aged 18–45, and institutional applicants — HUF, society, partnership firm, LLP, company. Must be a Micro or Small enterprise under the Government of India definition at the date of application. |
| Maximum loan | ₹2 crore for land, plant and machinery, work shed / building, furniture, equipment and working capital |
| Own contribution | Minimum 10% of project cost from the applicant |
| Loan tenure | Up to 7 years, with up to 6 months moratorium |
| Where the unit sits | Rajasthan |
Check these before you apply
Interest subsidy
| Loan amount | Interest subsidy |
|---|---|
| Up to ₹1 crore | 8% |
| Above ₹1 crore and up to ₹2 crore | 7% |
- An additional 1% on loans above ₹1 crore and up to ₹2 crore for women, SC/ST and Persons with Disabilities entrepreneurs; units in rural areas; and holders of a weaver card issued by the Government of India or a DICC, or a handicraft / artisan card.
- Where the lender's own interest rate is equal to or below the applicable subsidy rate, 100% interest subsidy is payable.
- Interest subsidy runs for a maximum of 5 years from commencement of production or operation — even where the loan itself runs the full 7 years.
- During the moratorium, interest subsidy is payable provided interest is being paid regularly.
The land cap that quietly shrinks large claims
Where land and building form part of the project, only 25% of the total loan amount attributable to land and building is eligible for interest subsidy. A land-heavy project can therefore carry a ₹2 crore loan while only a fraction of the land component earns subsidy. Model this before you fix the project structure — it is the single largest determinant of what the scheme is actually worth to a manufacturing unit buying its own plot.
Margin money grant
25% of the loan sanctioned, or ₹5 lakh, whichever is lower.
- Payable only once the financial institution has disbursed a loan amount equal to or greater than the grant.
- Held as a short-term deposit with the lender, not paid to you. The lender pays the State no interest on it, and charges you no interest on the equivalent slice of the loan.
- Adjusted into your loan account only after the unit has operated for 3 years and you are not in default, following departmental verification and an adjustment order.
Margin money is conditional for three years
If the enterprise does not run for three years, the entire margin money is returned by the lender to the Industries & Commerce Department, without interest. Treat it as a retention that vests over three years, not as day-one funding.
Who can lend under the scheme
- Nationalised commercial banks
- RBI-authorised private sector scheduled commercial banks and scheduled small finance banks
- Regional Rural Banks
- Rajasthan Financial Corporation
- SIDBI
- Urban Co-operative Banks and Central Co-operative Banks
Where these claims come apart
- A capital or interest subsidy taken under any Central or State scheme in the previous 5 years, for the same head.
- Defaulter status with any bank or financial institution.
- Composite loans where working capital exceeds 30% of the facility.
- Expecting interest subsidy on the full land and building component rather than 25% of it.
- Winding up the enterprise before three years, triggering return of the entire margin money.
- Expecting interest subsidy across the full 7-year loan tenure, when it is capped at 5 years from commencement.
- Applicant, or majority ownership, outside the 18–45 age band.
Source: Vishwakarma Yuva Udyami Protsahan Yojana — notification of the Industries & Commerce (Group-2) Department, Government of Rajasthan, No. प. 1(6) उद्योग/ग्रुप-2/2025/06495, digitally signed by the Deputy Secretary to Government on 3 September 2025, RajKaj Ref No. 17503186.