The government is setting up Scheme for Technology Acquisition and Development Fund (TADF) to provide funding support to Small, Medium Enterprises for acquisition and development of technology, Ministry of Commerce & Industry has said.

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Commerce & Industry Minister, Nirmala Sitharaman, in a written reply to Rajya Sabha, on Wednesday said that this scheme will be set up under National Manufacturing Policy which will be applicable to all Micro, Small and Medium Enterprises (MSMEs) including those in National Investment and Manufacturing Zones (NIMZs).

The fund will provide subsidy of upto 10% of capital expenditure incurred on setting up of new plant and machinery, which be subjected to a maximum of Rs 50 lakh, Sitharaman said.

Other incentives provided by the government under this scheme are 5% interest reimbursement of the nominal interest charged by lending agency. Further, 25% grant to SMEs for expenditure incurred on Environmental and Water audits subject to a maximum of Rs 1 lakh in NIMZs.

Under the scheme, the MSMEs will be able to "access to the patent pool and/or part reimbursement of technology acquisition costs upto a maximum of Rs 20 lakhs for acquiring appropriate technologies patented upto a maximum of five years generally, prior to the date of submission of the project", Ministry said.

Lastly, the units which are practicing zero water discharge will also be eligible for 10% capital subsidy based on actual usage for one year and third party certification, Sitharaman added in the reply.