Pavala Vaddi Scheme Telangana
By Commissionerate of Industries, Government of Telangana
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Quick Answer
Interest above 3% p.a. on a term loan reimbursed, capped at 9% p.a. for five years, for new micro and small enterprises in Telangana.
About this subsidy
Pavala Vaddi brings the effective cost of a term loan down to roughly 3% a year for a new micro or small enterprise in Telangana. Under the MSME Policy 2024, the state reimburses the interest paid on a term loan taken against eligible fixed capital investment to the extent it exceeds 3% per annum, subject to a maximum reimbursement of 9% per annum.
The reimbursement runs for five years from the date of commencement of commercial production. It is a reimbursement of interest actually paid, not a cheaper loan — the enterprise borrows from its bank on normal terms, services the loan, and claims the difference back from the department.
Eligibility
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Full eligibility criteria — entity type, stage, sector, founder profile and registration requirements — plus your fit for this program. Sign up to view.
Subsidy providers
The Industries Department of the Government of Telangana is the state body responsible for industrial development, working under the Chief Minister and the Minister of Industries and reaching enterprises through District Industries Centres. It administers the state's industrial…
Learn moreBenefits & Funding
What You Get
Reimbursement of interest paid on a term loan availed against eligible Fixed Capital Investment, for the portion in excess of 3% per annum and subject to a maximum reimbursement of 9% per annum. The benefit runs for a period of 5 years from the date of commencement of commercial production, effectively holding the enterprise's own interest burden near 3% a year over that window.
- Disbursement
- Reimbursement
- Bootstrap friendly
- Yes
Timelines & Process
Applications
Rolling basis
Application Process
- 1
Avail term loan
The enterprise takes a term loan against eligible fixed capital investment.
You - 2
- 3
- 4
How to apply
Four steps from draft to disbursement — one action each.
- 1
Submit on the official portal
Use the official application link and verify all details before final submission.
- 2
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.
Frequently Asked Questions
How does Pavala Vaddi work?
You service your term loan normally, and the state reimburses the interest above 3% per annum, up to a maximum of 9% per annum.
How long does the benefit last?
Five years from the date of commencement of commercial production.
Which loans qualify?
Term loans taken on eligible Fixed Capital Investment by new micro and small enterprises.
Is this a cheaper loan from the government?
No. The loan comes from your bank on its own terms; the state reimburses part of the interest you have already paid.
Sources
Data on this page is compiled from official program and provider references.
