Tamil Nadu Subsidy And Schemes

Tamil Nadu state is the second-largest contributor to the Indian Gross Domestic Product (GDP). It ranks the second most industrialized state in India. A Good infrastructure backed by the easy availability of skilled or unskilled manpower. This makes Tamil Nadu an ideal State for setting up manufacturing units or service units. In order to attract Foreign Direct Investment (FDI) and boost domestic investment in businesses, the Tamil Nadu Government has announced various subsidies and schemes. In this article, we cover a list of business subsidies and schemes popular in Tamil Nadu.

The following subsidies are only available for Small Scale Industry (SSI) units or Micro, Small and Medium Enterprises (MSME) units. To know more how to obtain SSI Registration or MSME Registration, visit the following:

Capital Subsidy

All Micro Manufacturing units or Micro SSI units that are set up anywhere in the state of Tamil Nadu and investing in capital assets (plant and machinery) are eligible to receive a capital subsidy of 15% on eligible plant and machinery, subject to a maximum of Rs.30 lakhs. Micromanufacturing units are those manufacturing units having less than Rs.25 lakhs of investment in plant and machinery.

In 251 blocks notified as backward areas and industrial estates promoted by the Government and Government Agencies like SIPCOT, SIDCO, etc., (excluding industrial estates located within the radius of 50 Kms from Chennai city centre) the capital subsidy will be available for all SSI Units, Micro, Small and Medium. Further, an additional capital subsidy of 5%, subject to a maximum of Rs.2 lakhs will be given to enterprises set up by Women, SC or ST, Physically disabled and Transgender entrepreneurs.

An additional capital subsidy of 25% is also available on the value of plant and machinery installed to promote cleaner and environment-friendly technologies, subject to a maximum of Rs.3 lakhs and certification by Tamil Nadu Pollution Control Board that the equipment installed serve such a purpose.

List of Backward Blocks in Tamil Nadu.

Employment Intensive Business Subsidy

For those units setup in Backward Blocks of industrial estates promoted by the Government, an additional capital subsidy of 5% subject to a maximum of Rs.5 lakhs will be granted if at least 25 workers have been employed for a minimum period of 3 years within the first five years from the date of commencement of production. The evidence for the employment of workers would be the related statutory returns such as the returns filed under the Employees Provident Fund Act, etc.,

Agriculture Subsidy

Capital subsidy and Employment Intensive Business subsidy are available for the agricultural business. This is available for setting up of the agricultural business in all 385 blocks in Tamil Nadu state.

New Entrepreneur Enterprise Development Schemes [NEEDS] Scheme

The Government announces the NEEDS scheme to assist the educated youth of Tamil Nadu to become first-generation entrepreneurs. Educated youth with any Degree, Diploma, ITI or Vocational Training from a recognised institution and in the age group of 21 to 35 years under General Category and 21 to 45 years under Special Category aspiring to become entrepreneurs would be eligible for assistance under this scheme. The project cost shall not exceed Rs. 1 crore. Capital subsidy of 25% of the project cost up to a maximum of Rs. 25 lakhs. This will be provided by the State Government. For more information, refer to the article on NEEDS Scheme in Tamil Nadu.

Interest Subsidy Scheme [Interest Subvention Scheme]

All term loans sanctioned from 03.09.2012 by Tamil Nadu Industrial Investment Corporation Limited [TIIC] for SSI units or MSME both manufacturing and service sectors, under various types of schemes like General Term Loan, Term Loan for Windmill, Working Capital Term Loan, Open Term Loan, etc. are eligible for the 3% interest subsidy. An individual beneficiary can avail maximum interest subvention of Rs.30.00 lakhs under this scheme irrespective of the number of loans.

Back-ended Interest Subsidy

A 3% back-ended interest subsidy is provided to a maximum of Rs. 10 lakhs over a period of five years on loans up to Rs.100.00 lakhs for MSME under specific schemes.

Generator Subsidy

Tamil Nadu government provides a subsidy of 25% of the cost of Generator up to the capacity of 320 KVA (kilo-volt-ampere) purchased on or after 11.11.2008 by all new and existing Micro, Small and Medium manufacturing enterprises for their captive use subject to a maximum amount of Rs. 5 lakhs.

To know more about other subsidies in Tamil Nadu or to start a new business, visit IndiaFilings.com

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Frequently Asked Questions

Common questions about Tamil Nadu Subsidy Schemes for SSI and MSME Enterprises.

Answer: Micro manufacturing units (with less than Rs. 25 lakhs investment in plant and machinery) set up anywhere in Tamil Nadu are eligible for a capital subsidy of 15% on eligible plant and machinery, subject to a maximum of Rs. 30 lakhs.

Answer: Yes, these units can get an additional capital subsidy of 5%, subject to a maximum of Rs. 2 lakhs, over and above the regular capital subsidy.

Answer: An additional capital subsidy of 25% is available on the value of plant and machinery installed to promote cleaner and environment-friendly technologies, subject to a maximum of Rs. 3 lakhs and certification from the Tamil Nadu Pollution Control Board.

Answer: For units set up in backward blocks or industrial estates promoted by the government, an additional capital subsidy of 5% (subject to a maximum of Rs. 5 lakhs) is available if at least 25 workers are employed for a minimum of 3 years within the first 5 years.

Answer: Yes, capital subsidy and Employment Intensive Business subsidy are available for setting up agricultural businesses in all 385 blocks of Tamil Nadu state.

Answer: The New Entrepreneur Enterprise Development Schemes (NEEDS) provides a capital subsidy of 25% (up to Rs. 25 lakhs) for educated youth aged 21-35 years (general category) or 21-45 years (special category) aspiring to become first-generation entrepreneurs with project costs up to Rs. 1 crore.

Answer: All term loans sanctioned from 03.09.2012 by TIIC for SSI/MSME units are eligible for a 3% interest subsidy, with a maximum limit of Rs. 30 lakhs per beneficiary.

Answer: Yes, a 3% back-ended interest subsidy up to Rs. 10 lakhs over 5 years is provided on loans up to Rs. 100 lakhs for MSME units under specific schemes.

Answer: Tamil Nadu government provides a 25% subsidy on the cost of generators up to 320 KVA capacity purchased by new and existing micro, small and medium manufacturing enterprises, subject to a maximum of Rs. 5 lakhs.

Answer: You can visit IndiaFilings.com to know more about other subsidies in Tamil Nadu or to get assistance in starting a new business in the state.