Section 7(1) in The (Bihar State) Aid to Industries Act, 1956
(1)No loan shall be granted to any industry of an amount exceeding seventy-five per centum of the net value of the security offered including collateral security, if any, after the deduction of the value of all incumbrances existing at the time when the application is made :Provided that, in the case of new or nascent small-scale industry, the State Government may grant a loan equal to the value of the security offered including collateral security, if-(i)the State Government is satisfied that it is necessary to promote the development of the industry in the interest of the State and the industry in question cannot be established without the grant of such assistance; and(ii)the applicant agrees to associate a nominee of the State Government with the management of the industry and to regulate the expenditure out of such loan in the prescribed manner:Provided further that a loan may, subject to such other conditions as may be prescribed, be given to a small-scale industry on the security of movable properties including stock-in-trade only for a period not exceeding one year.
