Steps for Setting up an Industry

1. Selection of Product / Industry : For getting guidance for the

selection of product/industry the following Institutions may be
contacted :

Industrial and Technical Consultancy Organisation of Tamilnadu

Limited [ITCOT], Chennai - 6.

Micro, Small & Medium Enterprises, Guindy, Chennai - 32.

2. Approvals

The units should obtain MSME Registration Certificate from

the District Industries Centre of the concerned District.

Large scale units shall obtain SIA Registration

If the product falls under compulsory license, the same shall be

obtained.

If the site where the industry is to be set up is an agricultural

land, it has to be reclassified for industrial use. To get this done,
the Town Planning Officer, the Tahsildar and the Deputy
Commissioner or the Assistant Commissioner should be
approached.

For allotment of a shed in industrial estate, the entrepreneur

shall approach SIDCO or SIPCOT.

The plan of the proposed building must be approved by the local

administrative authority such as the Village Panchayat, The
Municipality, The City Corporation, MMDA, etc. as applicable.

Approval shall be obtained from the Inspector of Factories.

If the unit is to be located in any hill area like Nilgiris, Yercaud,

Kodaikanal, etc. special permission has to be sought from the
Government of Tamilnadu.

An application for the required power supply should be made to

the Executive Engineer, Tamilnadu State Electricity Board.

The entrepreneurs may have to register the industry with the

authorities listed below as applicable:

1. Commissioner of Commercial Taxes

2. Regional Provident Fund Commissioner
3. Collector
4. Central Excise Secretariat for Industrial Approvals (SIA), New
Delhi (in Respect of medium & large scale Industries)
5. Drug Controller (Pharmaceutical Concerns)
6. Director of Plant Protection,
7. Central Control and Insecticide Cell, Faridabad (for pesticide
manufacturing concerns)
8. Director, Food and Vegetable Products ( for fruits processing
concerns) for F.P.O. License.
9. Tamilnadu Pollution Control Board (for Pollution Clearance).

Details to be furnished while submitting Application

The Project Report with all particulars should be submitted along with
the application. The following are the particulars required to be
furnished.
General :

Details of investigation fees remitted.

Attested Photographs and detailed bio-data of the Promoters /

Directors.

List of Associated Companies, audited Balance Sheet and Profit

and Loss Account for years.

In case of existing companies, audited working results for the

last 3 years of the applicant to be furnished.

Assets and Liabilities Statement of Promoter / Directors duly

signed. If the Promoter is an NRI, necessary approvals /
permission from RBI as required.

The names of the Principal Bankers of applicant concern and

Associate concerns and the limit sanctioned along with the
security offered shall be furnished.

Copy of MSME Registration / SIA Registration / Industrial

License as applicable.

Copies of various permissions, approvals and licenses from

Government / Local authorities as required.

Detailed estimates of the buildings to be constructed and

estimate for building.

Flow Chart indicating the sequence of Operations involved in

the manufacturing with brief description of the process.
Quotations for the machinery proposed to be purchased and
reasons for selection besides competitive quotations of
machinery.

Raw Material tie-up letters with price evidence.

Market Survey Report and Market tie-up letters.

Details of infrastructure availability viz., Water, Power, Fuel,

Labour and Effluent Treatment Disposal.

Copies of returns submitted for Income Tax / Wealth Tax by

Proprietor / Partners / Directors for the last 3 years.

If the unit is located in SIDCO / SIPCOT / Government

Industrial Estates, a copy of the allotment letter together with
the terms and conditions of allotment.

The various assumptions made in the preparation of projected

profitability statement and evidence thereof.

If any Director, Partner, Proprietor of the applicant concern is a

Director of TIIC or is in any way related to any director of TIIC,

the details thereof shall be furnished.

Arrangements made for Working Capital Finance and its

assessment.

Details of Collateral Security. Copy of the sale deed, patta, EC

and relevant revenue receipts.

Selling price evidence from prospective customers.

Basis for arriving at installed capacity.

Existing and proposed installed capacity.

Copy of Collaboration / Know-how / Turnkey Agreement, if

any, and a detailed bio-data of the Collaborator / Consultant and
a list of jobs / Projects executed etc.

Pollution Control Clearance from Pollution Control Board for

'Red' and 'Orange' Category Industries.

In case of Partnership Concerns, Partnership Deed and Firm

Registration Certificate from Registrar of Firms.

In case of Limited Companies, Memorandum and Articles of

Association Company, Incorporation Certificate from the
Registrar of Companies.

In case of Co-operative Societies, By-Laws of the Society

In case of Associated concerns

o Brief history / details of the concerns
o Banker's Name and Address
o Audited Balance Sheet ad Profit & Loss Account for the
past 3 years
o Whether availed any assistance from TIIC / Banks, etc.

and if so, the details thereof.

Imported Machinery ( New and Second Hand):

For New Imported Machinery:

o Evidence of rate of Import Duty
o Copy of Import License
o If the machinery is imported under EPGC Scheme, the
details as how the unit will comply with the export
obligation.

For Second-hand Imported Machinery

o Chartered Engineer's Valuation Certificate regarding
year of manufacture, country of origin, name of the
manufacturer, present condition, residual life and value
of the second-hand imported machinery and
corresponding cost of new machinery.

Appraisal of the Project

TIIC appraises the applications for the technical feasibility and economic
viability of the project before according sanction. The project should generate
sufficient profits to service the loan. The applicant should satisfy TIIC regarding
the marketability and commercial viability of the project. Market Surveys or any
published materials regarding market potential, demand and supply position of
the product and market tie-up letters from reputed concerns will be helpful in
assessing the potential Market.
For assessing the financial viability of the project, details of the cost of
production and profitability and cash flow statement for the loan period are to be
furnished to assess the pay back period, debt service coverage ratio and break
even production level. TIIC will be assessing the promoters background by way
of field enquiry.

SECURITY DOCUMENTS

TIIC sanctions financial assistance on having the first charge of the fixed assets
(viz. land, building and plant and machinery) of the industrial unit. The charge is
secured by way of Equitable Mortgage. In case of consortium finance with other
Financial Institutions / Banks, the first charge will be on Pari Passu basis with
participating institutions.
The Corporation accepts hypothecation of machinery in respect of loans
involving the purchase of machinery only. For transport loans, TIIC's lien shall be
endorsed / marked on the RC Book of the Vehicle.
Subsidies and Incentives
Sl.
No.

Subsidy

Details

State Government Subsidies / Incentives

A. Subsidy / Incentives for Micro, Small and Medium Enterprises
(For further details, refer G.O.Ms.No.14 dt.07.05.2008 of MSME Department, Govt. of Tamilnadu)

1.

Capital Subsidy

25% on eligible plant and machinery value, subject to a maximum of Rs.30 lakhs
(set up in 251 backward blocks however micro enterprises are eligible in all areas)

2.

Additional Capital
Subsidy for select
category of
Entrepreneurs

Additional Capital Subsidy of 5% subject to a maximum of Rs.2.00 lakhs to

Enterprises located in backward areas / agro based industries & set up by Women /
SC / ST / Physically handicapped / Transgender entrepreneurs.

3.

Employment Intensive Subsidy of 5% subject to a maximum of Rs.5.00 lakhs will

Employment Intensive be granted, if at least 25 workers have been employed for a minimum period of 3
Subsidy
years within the first 5 years from the date of commencement of production for units
set up in backward areas / agro based enterprises.

4.

Subsidy for Agro based Capital Subsidies 1-3 above are extended for setting up of Agro based enterprises in
Enterprises
all 385 blocks in the State.

5.

Special Capital
Subsidy to Thrust
Sector Enterprises
notified by the State
Government

Micro / Small / Medium manufacturing enterprises in notified thrust sectors are

eligible for 25% on eligible Plant and Machinery subject to maximum of Rs.30.00
lakhs. Such industries set up anywhere in the State are eligible.

6.

Government of Tamilnadu has formulated a Special Scheme for New Entreperneur

cum Enterprise Development Scheme [NEEDS] in order to assist the educated
youth to become first generation entrepreneurs. Educated youth with any Degree,
Diploma, ITI/Vocational Training from a recognized institution and in the age group
New Entrepreneur cum
of 21-35 years under General Category and 21 to 45 years under Special Category
Enterprise
aspiring to become entrepreneurs would be eligible for assistance under this
Development Schemes
scheme. The project cost shall not exceed Rs.1.00 crore. Capital subsidy of 25% of
[NEEDS]
the project cost upto a maximum of Rs.25.00 lakhs will be provided by the State
Government. Besides, a 3% interest subvention will also be extended by the State
Government. For further details, refer G.O.(Ms).49, MSME (D2) Department, dated
29.10.2012.

7.

All term loans sanctioned with effect from 03.09.2012 by Tamilnadu Industrial
Investment Corporation Limited for Micro, Small and Medium Enterprises both
manufacturing and service sectors, under various types of schemes like General
Term Loan, Term Loan for Windmill, Working Capital Term Loan, Open Term
3% Interest Subvention
Loan, etc. are eligible for the 3% interest subvention. Individual beneficiary can
Scheme
avail maximum interest subvention of Rs.30.00 lakhs irrespective of the number of
loans. For further details, refer to G.O.Ms.No.156 Industries (M.I.F.2) Department,
dated. 03.09.2012 & G.O.(Ms).No.173, Industries (M.I.F.2) Department, dated.
04.10.2012

8.

Back-ended Interest
Subsidy

3% Back Ended Interest Subsidy to a maximum of Rs.10.00 lakhs over a period of

five years on loans up to Rs.100.00 lakhs for Micro / Small /Medium Enterprises
under specific schemes like MSEF Scheme, CLCS eligible technology.

B. Generator Subsidy
(For further details, refer G.O.Ms.No.27 Dt.21.5.2009 and G.O. (Ms) No.12 dt. 19.03.2012 of MSME (D2)
Department, Govt. of Tamilnadu)

1.

Generator Subsidy

25% of the cost of Generator set upto the capacity of 320 KVA purchased on or after
11.11.2008 by all new & existing Micro, Small and Medium manufacturing
enterprises for their captive use subject to the maximum limit of Rs.5.00 lakhs.

C. Incentives to Medium / Mega / Large Scale Industries

(For further details, refer G.O.Ms.No.15 of Industries (MIB 1) Department dated 04.02.2008)

1.

TIIC has been nominated as the Nodal Agency for sanction and disbursement of
Incentives to Medium /
incentives / subsidies for Medium / Mega / Large Scale Industries in Tamilnadu
Mega / Large Scale
whose investments upto Rs.300 crores.
For eligibility norms, please click
Industries
here.

Central Government Subsidies / Incentives

1.

2.

Credit Linked Capital

Subsidy (CLCSS) for
Eligible Small and Micro units undertaking technology up-gradation in conformity
Technology
upgradation of Small with the scheme for the specified sectors mentioned in the MSME Guidelines can
and Micro Industries avail CLSC as follow:given by
Commissioner,
Ceiling on loans for the eligible machinery is Rs.1.00 Crore.
Ministry of Small,
Micro and Medium
The Rate of Subsidy is 15% or Rs.15.00 lakhs on the eligible machinery.
Enterprises [MSME],
New Delhi for the FY
2012-2013. For further
Operation of the scheme is upto 31.03.2017.
details, refer
to www.dcmsme.gov.in
Ministry of Textiles,
Government of India
The Eligible Non-MSME Entities/Units registered
had introduced and
under Companies Act with the Registrar of the
implemented a new
Companies and MSME Entities/Units registered
scheme "AMENDED
with the concerned Directorate of
TECHNOLOGY
Rate of Industries/relevant Department of the State
Maximum
UPGRADATION
Capital Government in the following line of textile
Sl.
CIS Per
FUND SCHEME
Investmen segments undertaking technology upgradation in
No.
Indidvidual
(ATUFS)" for granting
t Subsidy conformity with the scheme can avail One Time
entity (Rs.)
One Time Capital
(CIS)
Capital Subsidy in any one of the incentives below
Investmernt Subsidy
subject to Eligibility Criteria and Unique ID (UID)
(CIS) for the period
allotted by O/o The Textile Commissioner,
from 13/01/2016 to
Mumbai with cap available for the different
31/03/2022. For further
sectors by the Ministry of Textiles.
details, refer
to www.txcindia.gov.in
1.

15% on
Eligible Garmenting, Technical Textiles
Machines

Rs.30
Crores

2.

10% on Weaving for brand new Shuttle-less Looms

Eligible (including Weaving Preparatory and Knitting)
Machines Processing, Jute, Silk and Hand Loom

Rs.20
Crores

3
(a).

15% on Composite unit/Multiple Segments - If the eligible

eligible capital investment in respect of Garmenting and
machines Technical Textiles category is more than 50% of the
eligible project cost.

Rs.30
Crores *

3
(b).

Composite unit/Multiple Segments - If the eligible

10% on
capital investment in respect of Garmenting and
Rs.20
Eligible
Technical Textiles category is less than 50%, then the Crores *
Machines
subsidy cap will be Rs.20 Crore.

* In case the applicant had availed subsidy earlier under RRTUFS, he will be
eligible for only the balance amount within the overall ceiling fixed for an
individual entity.

The Maximum subsidy for overall investment by an Individual entity under ATUFS
will be restricted to Rs.30.00 Crore.

3.

Food Processing
Subsidy given by
MOFPI, New Delhi.
For further details,
refer
towww.mofpi.nic.in

25% of the cost of plant and machinery and technical civil works up to
a maximum of Rs.50 lakhs is available for Fruits and Vegetables, Milk
Products, Meat, Poultry, Fishery, Cereal / other consumer food
products, Oil seed products, Rice Milling, Flour Milling, Pulse
Processing, etc.

TIIC is the implementing agency for various capital subsidies of State Government in respect of its assisted units.
TIIC is also the nodal agency for the select Central Government Subsidies viz. Food Processing Subsidy in respect
of its assisted units. TIIC gives subsidy bridge loans against eligible subsidies to the eligible units assisted by it,
helping them to implement their projects on schedule.