Starting a small business like agarbatti or cotton wick manufacturing is a great way to earn regular income, especially in villages and small towns. But many people stop because they don’t have enough money for machines, raw material, or setting up a small unit.
Good news: The Indian government provides loans, grants, and subsidies to help you start or expand your small manufacturing business — especially for cottage industries like agarbatti and cotton wicks.
In this guide, you’ll learn which schemes are available, how to apply, documents you need, and tips to get your subsidy approved.
Why Government Subsidy is Important for Small Businesses
When you start an agarbatti or cotton wick business:
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- You need money for machines, raw material, packing.
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- Banks sometimes hesitate to give loans to small businesses.
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- Government schemes help you get subsidy (free money) or low-interest loans.
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- Many schemes offer 25%–35% subsidy, which means you don’t have to return that part.
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- Special schemes for women, SC/ST, OBC, and rural entrepreneurs are also available.
So if you are planning to start an agarbatti unit — this is your chance to save big money!
Top Government Subsidy Schemes for Agarbatti & Cotton Wick Business
Here are the main schemes you can use:
PMEGP (Prime Minister’s Employment Generation Programme)
Who gives it? Khadi and Village Industries Commission (KVIC) + Ministry of MSME.
Who can apply?
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- Any Indian citizen above 18 years old.
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- No income limit.
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- Self-help groups, societies, co-operative societies, and small companies.
How much subsidy?
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- 15%–35% of the project cost (depends on location & category).
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- General category: 15% (urban), 25% (rural)
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- SC/ST/Women/OBC/Minority: 25% (urban), 35% (rural)
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- 15%–35% of the project cost (depends on location & category).
How it works?
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- You prepare a project report.
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- Apply online via the PMEGP portal.
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- Submit documents to KVIC or DIC office.
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- Bank gives loan and margin money subsidy is released.
MUDRA Loan Scheme
Who gives it? Banks under the Pradhan Mantri MUDRA Yojana.
Who can apply?
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- Small businesses needing up to ₹10 lakh.
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- No collateral required.
How much subsidy?
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- No direct subsidy but easy loan at low interest.
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- Some state governments club it with margin money subsidy.
How it works?
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- Prepare your project report.
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- Go to your bank.
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- Apply under Shishu (up to ₹50,000), Kishore (₹50,000–₹5 lakh) or Tarun (₹5–10 lakh).
State Government Subsidies (Khadi Board)
Many states have special Khadi & Village Industries Board that provide subsidy:
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- For example, Rajasthan Khadi Board, Gujarat Khadi Board, Maharashtra Khadi Gramodyog.
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- They give subsidy on machines, working capital, and training.
MSME Subsidy (Credit Linked Capital Subsidy Scheme – CLCSS)
If you register your unit under MSME Udyam:
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- You can get 15% subsidy on machinery under CLCSS.
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- Minimum loan should be ₹1 lakh, maximum subsidy ₹15 lakh.
Women Self-Help Group Schemes
If you are a woman entrepreneur:
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- Many states have SHG schemes.
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- NABARD also provides support.
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- You can get small grants to buy machines for wick or agarbatti making.
How to Apply for Government Subsidy for Agarbatti Business
Step-by-Step:
Register your Business
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- Apply for Udyam Registration (MSME Certificate).
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- Get a PAN Card and bank account.
Prepare a Project Report
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- Show how much you plan to invest.
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- Include machine cost, raw material, expected profit.
Visit Local DIC Office
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- District Industries Centre helps you with PMEGP and state schemes.
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- They guide you to fill forms correctly.
Contact Your Bank
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- Final loan & subsidy goes through your bank branch.
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- Keep your ID proof, address proof, caste certificate (if any), bank statement.
Submit Application Online
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- For PMEGP: Apply at www.kviconline.gov.in
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- For MUDRA: Directly approach your bank.
Attend Interview/Training
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- Some schemes need short training at RSETI or KVIC centers.
Get Loan + Subsidy
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- After approval, bank gives loan.
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- Margin subsidy is adjusted in your loan account.
Documents You Will Need
Aadhaar Card PAN Card Udyam Registration Certificate Caste Certificate (if claiming special category) Passport size photo Project Report Bank Account Details Rent agreement or land proof Quotation of machines
Tips to Get Your Subsidy Approved
Always prepare a realistic project report — don’t show fake numbers. Take machine quotations from genuine suppliers. Keep a small margin for working capital. Talk to your DIC or KVIC officer — they guide you well. Keep your phone active — banks will call to verify. Don’t pay money to agents — apply yourself!
Mistakes to Avoid
Fake documents — your loan will be rejected. Not keeping margin money ready — banks sometimes ask for it. Ignoring follow-ups — talk to the officer regularly. Not registering MSME — without Udyam certificate, you lose benefits.
How Much Profit Can You Make in Agarbatti or Cotton Wick Business?
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- Small cotton wick unit: Investment ₹30,000–₹1 lakh → Profit ₹15,000–₹40,000 per month.
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- Small agarbatti unit: Investment ₹50,000–₹2 lakh → Profit ₹20,000–₹60,000 per month.
If you get subsidy, your own investment reduces, and your ROI becomes faster.
Real Success Stories
Many women SHGs have started cotton wick units with PMEGP subsidy in Rajasthan, Gujarat, MP. Youth in villages use MUDRA loans to buy agarbatti machines and sell to local shops. Khadi Boards help rural people get orders for temples and local markets.
Conclusion
Don’t let lack of money stop you!
If you have the skill and interest, use these government subsidy schemes to get your agarbatti or cotton wick business up and running.
PMEGP, MUDRA, MSME, State Khadi Boards — sab aapke liye bane hain. Bas apply karo, correct document do, aur mehnat se apna business bada karo!
Need Help?
If you need: Machines for cotton wicks or agarbatti Raw material supply Help with project report Packing materials
Contact Balaji Products today!
We help small manufacturers start easily and grow confidently.