a) Capital Subsidy
Guidelines for availing Capital Subsidy
The following incentives and concessions are being extended to micro, small and medium enterprises in the State:
- 25% capital subsidy on the value of eligible plant and machinery, subject to a maximum of Rs.150.00 lakh.
- Additional capital subsidy for enterprises set up by Women / Scheduled Caste / Scheduled Tribe / Differently Abled and
Transgender entrepreneurs at the rate of 5% on the value of eligible plant and machinery, subject to a maximum of Rs.5.00
- Additional Capital subsidy 10% for eligible micro enterprises on the investment made in plant and machinery value, subjected
to a maximum of Rs.5.00 lakh over five years.
- All existing Micro and Small Manufacturing Enterprises setup anywhere in Tamil Nadu graduating to higher category by
undertaking expansion/diversification are eligible for 5% additional capital subsidy subject to a maximum of Rs. 25 lakhs for
- Additional Capital Subsidy at the rate of 25% of plant and machinery value installed to promote such technology subjected to
maximum of Rs.10.00 lakh for new and existing enterprises promotes cleaner and environmentally friendly technologies.
- 25% Capital Subsidy on eligible plant and machinery value for Small and Medium Agro-based and Food processing enterprises
set up in any of the 388 blocks in the State.
- All new micro manufacturing enterprises established anywhere in the state.
- All new small and medium enterprises under following 24 thrust sectors established anywhere in the state (excluding additional
capital subsidy and employment generation subsidy)
- Electrical and electronic industry
- Leather and leather goods
- Auto parts and components
- Drugs and pharmaceuticals
- Solar energy equipment
- Gold / Diamond jewelry for exports Pollution control equipment’s
- Electric Vehicle components, charging infrastructure and components
- Cost - effective building material
- Readymade garments
- Food processing
- Plastic (except ‘one-time use and throw away plastics’)
- Petro Chemicals and Specialty Chemicals
- Medical Devices, Equipment and Components
- Sports goods and accessories
- Technical Textiles and Medical Textiles
- Aero Space, Defence Applications and Components
- Electronic System Design and Manufacturing
- Alternate products for ‘one time use and throwaway plastics’
- Electronic Waste Processing
- Industry 4.0 Traditional Industries.
- All new small and medium manufacturing enterprises established in any of the 254 industrially backward blocks in the state.
- All new Agro-based small and medium manufacturing enterprises established in any of the 388 blocks in the state.
- Existing manufacturing enterprises of the above categories which have taken up substantial expansion / diversification of the
b) Low Tension Power Tariff power subsidy (LTPT)
Guidelines for availing Low Tension Power Tariff power subsidy
Following category of Enterprises/activities are only eligible for LTPT subsidy:
- All new Micro manufacturing enterprises established anywhere in the State
- Existing Micro Manufacturing Enterprises which have taken up substantial expansion/diversification of the existing activities
- Micro enterprises using Low Tension Power supply (Tariff IIIB) will alone be eligible to avail of this subsidy
Expansion / Diversification Enterprises:
Existing Manufacturing Enterprises of the above categories which have taken up substantial expansion / diversification of the
existing activities, subject to the condition that expansion (or) diversification the involves enhancement of plant and machinery
value by atleast 25% of the value of existing plant and machinery and involving enhancement of turnover by 25% for the same
product (or) new products lines.
c) Generator subsidy.
Guidelines for availing Generator Subsidy
Following category of manufacturing Enterprises/activities are eligible for generator subsidy:
All new and existing Micro, Manufacturing Enterprises with Generator capacity upto 320 KVA.
Following list of Enterprises/activities are not eligible for generator subsidy:
- Micro, Small & Medium Service Enterprises.
- All applications filed after six months from the date of purchase of the generator set or date of installation of the generator
set, whichever is later.
d) Back - Ended Interest Subsidy
Guidelines for availing Back - Ended Interest Subsidy
Micro and Small Enterprises who have availed term loan under Technology upgradation / modernization schemes, National Equity
Funds Scheme (Renamed as Micro / Small Enterprises Funding Scheme), Scheme for ISO Certification / R&D under NSIC -SIDCO
Consortium and Credit Guarantee Fund Trust Scheme.
Existing Micro and Small Enterprises, which upgrade their existing plant and machinery with the state-of-the-art technology, with
or without expansion, by induction of well-established and improved technologies in specified sub-sectors / products as listed in
the guidelines on Credit Linked Capital Subsidy Scheme (CLCSS) Scheme of Government of India from time to time / as approved
by the Technical Committee headed by the Principal Secretary, MSME Department.
Quantum of Assistance
Credit Guarantee Fund Trust Scheme (CGTMSE):
The interest shall be at the rate of 5% for a maximum of 5 years only
irrespective of the period of payment of loan. Further, the maximum amount of back-ended interest subsidy payable per loan
shall be Rs.20 lakhs only on loans taken up to Rs.200 lakhs.
Technology up-gradation / modernization Scheme (TUF):
The interest shall be at the rate of 5% for a maximum of 5 years
only irrespective of the period of payment of loan. Further, the maximum amount of back-ended interest subsidy payable per
loan shall be Rs.25 lakhs only on loans taken up to Rs.500 lakhs
- TIIC - In respect of term loan sanctioned by TIIC.
- SIDBI - In respect of term loan sanctioned by SIDBI.
- General Managers of DICs - In respect of term loan sanctioned by Banks.
Mode of payment of subsidy
Interest subsidy shall be reimbursed on a quarterly basis to the financial institutions. The units should be prompt in repayment
of loan and interest. If there is any default in repayment of loan and interest as per the schedule of payment fixed by the financial
institution, the back-ended interest subsidy will not be paid during the period of default. However, if the Micro or Small Enterprise
subsequently pays the installment, interest subsidy alone shall be paid. Penal interest or charges for belated payment, if any,
shall not be paid by the Government. The unit should be in operation during the period for which interest subsidy is claimed.
e) Promotion of Energy Audit and Conservation of Energy (PEACE)
Guidelines for availing Energy Audit Subsidy
The Government have introduced Promotion of Energy Audit and Conservation of Energy (PEACE) scheme for promoting Energy
efficiency in MSME units. Under this scheme the Government will reimburse 75% of the cost of conducting energy audit and 50%
of the cost of machinery & equipment’s replaced, retrofit and technology acquired for the purpose of improving the energy
efficiency, based on the recommendation of Energy Audit.
Objectives of the Schemes
- To create awareness & understanding of the importance and implication of energy audit and conservation of energy.
- Incentives MSMEs to undertake Audit.
- To enable MSMEs to adopt suitable techniques /technologies to achieve energy efficiency by extending subsidy.
i. PEACE - Incentive for conducting detailed energy audit
- Main objective is to identify the major sources of energy in use, identifying the lapses in energy usage, identifying areas to
improve energy usage, determining the level of consumption of the energy sources, and recommending measures that will
enhance energy savings in the industry.
- Eligible MSMEs shall file its claim within one year from the date of completion of Energy Audit.
- Bureau of Energy Efficiency empaneled energy auditing firms/Cos., (with auditing teams led by Bureau of Energy Efficiency
accredited Energy Auditors) or Bureau of Energy Efficiency accredited individual Energy Auditors only be engaged.
Quantum of Subsidy
- 75 % of the Energy Audit cost subject to a Maximum of Rs.1.00 lakh per energy audit per unit.
- Enterprises having more than one unit may also avail this concession, separately for each unit.
- The overall ceiling on subsidy should be applied not for the original energy audit and subsequent energy audit taken together
but should be applied separately for the original energy audit and the subsequent energy audit.
- There should be a gap of minimum three years between the previous energy audit and the subsequent energy audit i.e.,
present energy audit.
- The expenditure incurred towards professional charges of conducting an Energy Audit only is eligible.
ii. PEACE - Incentive for implementing Energy Audit Recommendations
- The objective is to incentivize MSMEs to implement the recommendations of the Energy Audit Report and to optimize the
energy consumption leading to energy saving and money saving in electricity bills.
- Eligibility - All manufacturing MSMEs in the state which have undertaken energy audit and have achieved atleast 10% energy
savings in terms of number of units of energy consumed per unit of product manufactured.
- 50 % of the cost of the eligible components, subject to a Maximum limit of Rs.10,00,000/-.
- MSMEs must apply online to DIC/ RJD, Chennai only after three months from the date of implementation of Energy Audit
recommendations but within one year from the date of implementation of Energy Audit recommendation.
- MSMEs shall apply online to the DIC/ RJD, Chennai of the respective district in the prescribed format -II
- Investments made after the energy audit alone will be eligible for subsidy.
- The percentage of savings in specific energy consumption (KWh/Kcal per unit of product) shall be reckoned on twelve-month
average energy consumption prior to implementation of energy audit recommendation and minimum three-month average
after the implementation of the recommendation of Energy audit.
- The subsidy will be released to the MSME after implementing the recommendations in the Energy Audit Report and duly
certified by the energy auditor.
- If the unit availed loan for the purpose of energy audit, the subsidy will be released to the bank to adjust in the loan account
if the loan is in currency.
- All micro, small and medium service enterprises
- All Micro, Small and Medium Manufacturing enterprises which have availed similar subsidy for the same purpose from any
other State or Central Government Department/ Agency.
f) Scheme for acquiring Quality Certifications (Q-CERT)
Guidelines for quality certificate
The scheme aims to encourage MSMEs to acquire quality standards/certifications for process and product, such as ISO 9000/ISO
14001/ISO 22000/Hazard Analysis and Critical Control Point (HACCP)/ Good Hygienic Practices (GHP) / Good Manufacturing
Practices (GMP) Certifications, BIS Certification, Zero Defect and Zero Effect (ZED) Rating or any other international quality
certification recognized in India by a competent authority. The government reimburses payments made to Consultancy and
certification agencies towards acquiring such Quality Certification subject to a ceiling of Rs.2.00 lakhs for National level certification
and Rs.10.00 lakhs for International level Certification.
During the financial year 2020-21, a sum of Rs.60.35 lakhs has been disbursed to 92 MSMEs in the State.
g) Reimbursement of Stamp duty & Registration charges
Guidelines for stamp duty & registration charges
All new Micro and Small enterprises set up in declared 254 industrially backward blocks are eligible to avail 50% reimbursement
of stamp duty and Registration charges paid to the Registration department on purchase of land meant for industrial use
h) Subsidy for asset creation for Intellectual Property
Guidelines for leveraging the Intellectual Property Regime (IPR)
- Subsidy on the cost of Patent Registration in India or abroad.
- Subsidy on the cost of Trademark / Geographical Indication Registration in India or abroad
Quantum of Assistance
i. For Patent Registration
75% subsidy on the cost of filing of the application for patent Registration including the cost of first –time maintenance fee of the
granted application subject to a maximum of Rs3.00 lakh per patent registered.
ii. For Trademark Registration or Geographical Indications (GI)
50% subsidy on the cost of filing application for Trademark Registration including the cost of first-time maintenance fee for the
granted application subject to a maximum of Rs25,000/-per Trademark or Geographical Indications registered.
i) Pay Roll subsidy
Guidelines for Pay Roll subsidy
Reimbursement of employee's contribution to the EPF for their employees for the first three years subject to a maximum of
Rs.24,000/- per employee per annum, if employment is provided to more than 20 persons.
- All new Micro Manufacturing Enterprises setup anywhere in Tamil Nadu.
- All new Small and Medium Manufacturing Enterprises set up in backward areas and industrial estates excluding the industrial
estates located within the radius of 50 km from Chennai city Centre.
- All Small and Medium Agro-based and Food Processing Enterprises set up in any of the 388 blocks in the State.
j) Scheme for fund raising through SME exchange
Guidelines for subsidy for fund raising - SME
To facilitate high growth potential SMEs in the State to raise equity capital through SME Exchange utilizing IPOs, in both the
manufacturing and services sector, Government will provide one-time of 50% of the expenditure incurred for listing, subject to a
maximum of Rs 30 lakh for successful listing on the SME Exchange
2. Self-Employment Schemes
a) New Entrepreneur cum Enterprise Development Scheme (NEEDS)
- Specially devised and specifically implemented for promoting first entrepreneurial projects of first-generation entrepreneurs
- Aspirants must be of age between 21 - 35 in general and for special (Women/BC/MBC/SC/ST/Ex-servicemen/Transgenders/Differently abled), age relaxation upto 45 years
- Higher Secondary (+2 Passed)/Degree / Diploma / ITI / Vocational Training
- Manufacturing or Service projects with Project cost from Rs.10.00 lakhs upto Rs.5.00 crore
- Promoter’s contribution 10% for General and 5% for Special Category
- Loan assistance from TIIC / Commercial Banks / TAICO Banks
- Individual Based Capital Subsidy @ 25% of the Project cost (Maximum Rs.75.00 lakhs)
- 3% Interest subvention through-out the entire repayment period
b) Unemployed Youth Employment Generation Programme (UYEGP)
- Scheme for mitigating the unemployment problems of socially and economically weaker sections of the society
- Applicants must be of age between 18-35 in general and for special (Women/Minorities/ BC/MBC/SC/ST/Ex-servicemen/Transgenders/Differently abled), age relaxation upto 45 years
- Minimum 8thPass
- Family income should be below Rs.5.00 lakh
- Manufacturing / Trading / Service projects with maximum Project costs Rs.15.00 lakh / Rs.5.00 lakh / Rs.5.00 lakh respectively
- Promoter’s contribution 10% for General and 5% for Special Category
- Loan assistance from Commercial Banks
- Individual Based Capital Subsidy @ 25% of the Project cost (Maximum Rs.2.50 lakh)
c) Prime minister Employment Generation Programme (PMEGP)
- Scheme sponsored by the Union Government to promote self-employment and to mitigate the unemployment problems
- Applicants must be of age above 18 years
- Educational qualification not required, But for Manufacturing projects above Rs.10.00 lakh and Service projects above Rs.5.00
lakh the promoter must have minimum 8th Pass
- Manufacturing / Service projects with maximum Project costs Rs.25.00 lakh / Rs.10.00 lakh
- Promoter’s contribution 10% for General and 5% for Special Category (SC/ST/OBC / Minorities / Women, Ex-Servicemen,
Physically handicapped, NER, Hill and Border areas)
- Loan assistance from Commercial Banks
- Margin Money Assistance 15% - 35%.
- Application shall be filed through online only - kviconline.gov.in/pmegpeportal/