Guidance To Entrepreneurs

TANSIDCO guides aspiring entrepreneurs who approach for information on where and how to
get project profiles, incentives available for the industry, packages of financial assistance
available with various agencies, obtaining power connection from TNEB, facilities provided by
other Central and State Government agencies.

Steps To Set Up Small Enterprise Venture

Guidelines for Preparation of Project

WHOM TO CONTACT AND FOR WHAT

STEPS TO SET UP SMALL ENTERPRISE VENTURE

Introduction:

Against the backdrop of growing unemployment among the educated people, setting
up of Small Enterprises has been considered as prime option open to them. many of the
Industrial Giants and Multi-National Companies have had their genesis or origin as SMALL
ENTERPRISE ENTREPRENEUR ONLY. Their testimony bear proof to this observation. However,
some of the important steps or considerations open for a prospective entrepreneur are detailed
and discussed here. The steps mentioned may be considered or to be followed up one by one;
however it shall be initiated simultaneously so that the gestation period of the entrepreneur
could be shortened to a great extent.

Step 1 : DECISION TO BE SELF-EMPLOYED

Setting up a small enterprise venture is considered as most suitable avenue for an

unemployed person, who has the orientation towards entrepreneurship and growth. He / she
can enjoy sovereign status, controlling the affairs of the enterprise, creating at the same time
jobs for quite a good of people.

The JOB SEEKER is transformed into a JOB PROVIDER.

Such Ownership, besides providing " inner-satisfaction" helps to achieve an image of

PRESTIGE and STATUS. Besides, the owner of the enterprise would be instrumental in making
a worthwhile SOCIAL CONTRIBUTION TO SOCIETY- by turning out products / services being
constantly required and demanded by the people.

An entrepreneur possessing the keen aptitude for setting up a small scale industrial
unit would, at the outset, formulate a comprehensive BUSINESS PLAN / or Project Plan giving
a total visualization of the Small Scale Unit before commencement of operations.

Behind the decision to be self-employed the other three essential assets in your
SUCCESS REPERTOIRE are CONFIDENCE, ENTHUSIASM and REALISTIC GOAL-SETTING. A
"STRONG SELF IMAGE" AND ACHIEVEMENT always go hand in hand.

Hence, for the New Entrepreneur with True Self Acceptance, SETTING REALISTIC
GOALS AND PURSUING T them would become pleasurable activity.

While pursuing to achieve the goal, certain traits of character or personality, will have
to be developed and this is possible by a conscious effort. Entrepreneur needs to develop the
following personal characteristics.

Intuition

Instantaneous and instinctive perception of

opportunities.

Vision

Imaginative foresight

Optimism

Faith in oneself and confident approach in search of

opportunities.

Dynamism

An ability to face the pace of change

Enterprise

Rational risk and capacity to management and material

Determination

Indomitable

The capital investment intended for setting up an industrial unit depends mainly
upon the individal's capacity to invest a SPECIFIC PRODUCT LINE. Before embarking on any
Industrial or Business Venture, it is almost essential that the new entrepreneur should know
the profitability percentage of profits on sales volume obtainable as well as " Profit on the total
investment".

STEP2: SEARCH FOR AN OPPORTUNITY AND SELECTING THE RIGHT PRODUCT

A new entrepreneur must take special care in selecting a business opportunity as it

an one time decision for him and all his subsequent efforts and plans will be decided on the
basis of the decision about the product selected. For entrepreneurs, selecting the right product
is as good as half the battle won in business. A decision of selecting a product.

Entrepreneurial activity is essentially person oriented. Therefore, the strengths,

weakness, preferences, values etc., of the entrepreneur will effect choiceof business
opportunity. An entrepreneurnis, therefore, advised to be aware of his own self all the time.

Business opportunity and entrepreneurial response to it, together form the foundation
on which the super structure of a new venture rests, if the foundation is weak or defective, the
super structure may well collapse or require extensive repairs.

This task can be divided into stages.

STAGE-IDENTIFYING A BUSINESS OPPORTUNITY

An entrepreneur is said to be an opportunity seeker, for the potential entrepreneur

his / her is to identify, explore and then select an attractive business opportunity.

Defining "Opportunity"

Opportunity may be defined as an attractive projects ideas, which an entrepreneur

accepts as a basis for his investment decision.

A mere possibility is to be distinguished from business or opportunity, Hood business

ideas must be capable of being converted into feasible projects.

Therefore two major ingredients of a business opportunity, which need to be high level
are: 1) good market scope i.e. gap between present or likely demand and supply 2) An
attractive / acceptable return on investment.

Apart from these two criteria business opportunity needs to be analysed from other
view points for its viability such as technical, production, commercial and managerial. These
criteria are inter linked and a decision about one, affects others.

THE PROCESS OF SELECTION

The process of selection of product and the stages through which an entrepreneur
has to pass before reaching the final decision, needs to be carefully understood.

Selection of right business opportunity demands:

a) Understanding of one's own capabilities, strengths, limitations and preferences.

b) Exploring all possible and suitable opportunities available within existing (given)
conditions and environment and

c) Taking final decision about product after comparative analysis of opportunities

available consistent with entrepreneurial capabilities and their relative benefits. Whether a
business opportunity is for manufacturing a product or providing services, one generally
begins by concentrating one line of activity.

The idea about project may be generated by:

1. Thinking of new product / service not existing in the town area/ country.

2. Developing existing products / services available in the market in terms of design

specifications etc.,

3. By selecting products / services which are already being manufactured.

Exploring Opportunities:

The process of identifying opportunities requires intensive efforts and specialized skills.
However, certain indicators or guide-lines may help to identify and also assess opportunities.

1.

Environment:
Basic features of an area and its resources inventory population its composition,
occupational pattern, socio-economic background etc.,

2. Current Business Scene:

a) Present pattern of trading and business activities in the area with reference to inter
regional flow of commodities. Local consumption and needs for industrial goods as also
services.

b) Emerging trends and patterns of trading and business activities in terms of new
demands for consumption of goods and services in the area.

III) Technology changes:

a) Resource-based idea:

i) Industries based on mineral, agricultural, marine and forest resources.

ii) Waste based products such as agro waste, wod weaste, metal weaste, etc.,

b) Linkage related ideas:

i) Industries arising out of various types of linkage such as backward and forward
integration from existing lines of manufacture.

ii) Ancillary development projects.

iii) Industries based on substitution ie., products which are either obtained from
outside the region or the country at large.

c) Exports / Imports related ideas:

i) Export oriented activity

ii) Import substitution

d) Market shift or growth related ideas:

Consumer and industrial products that have growth potential as result of increased
population or changes in composition of population, purchasing power, changes in living style
etc.,

e) Special Product Ideas:

i) Research and invention based products

ii) Skill /knowledge based products

iii) Products based on institution / Government purchases, Hospital / School etc.,

f) Service Sector Idea:

Household repair and maintenance, service facilities / workshops / establishment to

cater to industrial and household needs.

g) Government Policies, Priorities and Plans:

By exploring these sources, the entrepreneur will have an inventory of various project
ideas.

It will be possible to identify such business opportunities on the basis of readily

available data / information. The initial process would involve collecting and coordinating
relevant information from the right sources.

STAGE-II-TAKING DECISION:

Decision making process may ionvolve the following points.

Point 1: Decide about the Board Industry Group

1. Type of industry you would like to choose engineering / Plastic / Chemicals etc.,

2. Consumer products being used and consumed regularly and directly e.g detergent,
cloth etc.,

3. Intermediate Goods (Goods used to manufacture other products printing machinery

components etc.,)

4. Capital Goods (Goods which needs further processing by otherss to get final product
chemicals, bright bars etc.,)

5. Present environment and industrial climate for entering the line.

6. Chances for flexibility and possibilities of diversifying in future.

7. Preferences, technical capabilities and familiarity or possibility of support from others.

On the basis of the above factors, entrepreneurs may select a line of activity.

Point 2. Selection of Specific Project:

Having decided the industry group, the next step is to select a specific project. The
suggest process is as follows:

1. Decide the size of the Project:

Depending upon your own investment capacity and possibilities of getting financial
assistance, overall investment size of the projects.

2. Check Govt. Policy:

Before finalizing the project it is very essential to check

i) What type of special permissions and licenses are required and whether they will be
available early.

ii) What regulations and controls exist for required materials, price of end products
and how, it will affect operation of the unit and

iii) Whether the proposed projects is in the discouraged or banned list of Government.

3. Own Strength & Limitations:

While selecting the project, the entrepreneur will have to continuously assess his own
strength and capabilities top undertake the specific project. An easy way to make decision is
to go or not go decision. Decide what is available by eliminating the unwanted projects which
may not give you, more desirable products.

4. Comparing relative advantages & disadvantages:

The assessment of prospects means own general assessment about the future scope
and feasibility of undertaking the project. This would include.

i) Complexity of "Technology"

ii) Return of Investment

iii) Market Potentiality.

As such, detailed techno economic feasibility, alone could help in making the final
decision, but at this stage these three criteria can help in arriving at a tentative selection, to be
subsequently followed by detailed feasibility study.

Thus at the end of this, the entrepreneur will have two or three projects which are worth
considering for investment.

STAGE-II-Final Selection of Project:

The final selection would involve assessment of all major criteria of viability namely
technical, financial, market and commercial.

It is important to note that this stage wise process enables entrepreneurs to avoid
unnecessary wasteful and frustrating efforts in exploring projects that may later on be found
unsuitable.

More than 5000 products which could be classified under mechanical, chemical, electrical,
electronic, glass and ceramic, hosiery, leather and ancillaries are being manufactured by the
small scale units and also are available for manufacturing for prospective entrepreneurs.

An entrepreneur has to undertake a "MARKET SURVEY" of the product contemplated.

The new entrepreneur should take due cognizance of the following factors before setting
up the industrial unit.

Pre-ownership experience:

Aptitude / inclination towards a specific business, education, technical qualifications,

trainings-undergone etc., would enable to select any one product line from different categories
of industries such as Chemicals, Mechanical, Ancillaries, Electrical, Electronic, hosiery, Glass &
Ceramics, Leather etc.,

Source of the crucial parameters to be considered are:

Local demand for the product

Demand within the State

Demand within the country

Export Markets

In choosing an "Ancillary Item" the entrepreneur's choice is influenced by the presence

of a mother unit usually a LARGE SCALE ENTERPRISE ( HMT OR BHEL OR IDPL)-

a potential

customer. In this context, the demand, the emanating from Railways, Defence, Government
purchase, Export possibilities will have to be considered.

Other Factors are:

Reasonable profit margin which may vary from 20% to 40% for small scale enterprises.
Availability of raw materials and other inputs. Availability of technical know-how and process
details [ Resource Centres EDI, DIC, SISI]

STEP 3: LOCATION OF THE ENTERPRISE:

Location (District, Area, City or Town ) merits prior planning by the prospective
entrepreneur who would like to establish a small scale enterprise .Normally, the site selection
should be on the basis of the market potential of the chosen product-line, general business
climate ion the area, "Life-style" of the residents and so on. These consideration should further
lead to cost reduction ensuring quality.

Besides this, the new entrepreneur can arrive at a worthwhile decision after taking into
account the following aspects:

Nearness to market and nearness to raw materials.

Availability of modern transporting systems and cost of transport for procuring raw materials,
dispatching of finished goods and speedy delivery.

Taking an industrial shed ( in an Industrial Estate) would be ideal: or availability of an

Industrial Area or an Industrial Zone with essential services such power, adequate water
supply and facilities for "Effluent Disposal" could be considered (Entrepreneurs should
approach Tamilnadu Small Industries Development Corporation Limited (TANSIDCO), Head
Office, Thiru Vi Ka Industrial Estate, Guindy, Chennai-600 032).

Availability of required skills at prevailing wage rates.

Climatic conditions / environmental factors affecting the industry.

Incentive / concessions if applicable for industrially backward area and so on.

[Resource Centres: EDI, DIC, TANSIDCO Central Office Building]

Managerial Competency:

The new entrepreneur-Manager entering the small scale sector should devote his full
attention to the new venture and should consider the product line chosen as a "Major
Economical Activity".

He should develop keen desire to adopt "Modern Management Practices" for

wnsuring its successful growth. He would endeavour to put on the market a product in his own
style in an " Innovative Spirit" without blindly imitating other brands. Entrepreneurs has to
necessarily maintain up-to-date records pertaining to actual production, sales effected every
month, in addition to gathering useful data on "POTENTIAL CUSTOMER" , "STYLES" etc.,

STEP 4: PREPARATION OF THE PROJECT REPORT

The Project Report being compiled by the entrepreneur should accomplish the vital
task of providing a "Bird's eye-view" of the entire spectrum of activity.

Project Report preparation is an importance step as it is often considered as a

"Project or Unit drawn on a paper" with all relevant details. A good project report would go a
long way not only enabling to obtain financial assistance but also for easy implementation of
the project as well.

Technical Feasibility:

Technical Feasibility would encompass factors such as description of the product

specification to be adopted, raw material availability as per requirements, outline of
"Manufacturing Process" inclusive of a "flow process chart, quality control measures, power
supply, availability of water, transport facilities and communication network etc.,

Economic viability:

Economic viability essentially involves compilation of demand forecasts for domestic

and export markets, arriving at most appropriate installed capacity, capital assets, evaluation
of the production cost, capturing a substantial share of market sales, revenue expected,
suitable price structure and so on.

Financial Implications:

Project cost covering " Non-recurring expenses" such as land and building, plant &
equipment, pre-operative expenses and "Recurring Expenses" such as Working Capital needs,
Raw Material needs, Wages for personnel and so on will have to be worked out in detail. The
probable cost of production over a period of 5 years will have to be assessed and expenses
such as fixed and variable expenses and break-even analysis should be presented. Besides,
highlighting profit per month, percentage of profit on total investment and percentage profit
on expected sales should also be computed and furnished.

STEP 5: REGISTRATION OF THE UNIT AS SMALL ENTERPRISE

Provisional Registration:

If the entrepreneur has decided upon a suitable product line and is actively
considering the establishment of an industrial unit, he would be initially issued a Entrepreneur
Memorandum valid for a period of 5 years. If the entrepreneur is not in a position to commence
production on account of circumstances beyond his control, the entrepreneur has to apply
again for getting a fresh provisional registration.

Whom to approach?

New enterprises to be located in Chennai city should obtain provisional registration

certificate from the Regional Joint Director, Director of Industries & Commerce, Guindy
Industrial Estate, Chennai-600 032.

New enterprises desirous of setting up small-scale units in different districts should

apply to the General Manager, District Industries Centre functioning in the headquarters of the
respective district.

Provisional Registration entitles the new entrepreneur to:

Apply for a shed in an Industrial Estate or a Developed Plot in an Industrial Area.

Apply for Corporation/ Municipality for other licenses

Apply for power connection

Apply for commercial Banks and other institutions.

Facility for on-line registration is also available

Permanent Registration Certificate:

An Industrial Unit which has commenced production or is found to be readiness to go

into production is eligible to get permanent registration certificate. The entrepreneur has to
approach the same Government Departments enumerated earlier.

STEP-6:ARARANGEMENTS FOR FINANCE [TERM LOAN]

i) The total capital requirements of an entrepreneur could be segregated into:

Long-term (Loan) requirements for acquiring fixed assets and

Short-term (Loan) requirements for Working Capital

ii) Arrangements of Finance (Working Capital)

the individual unit also requires short-term loans for its working capital requirements.
Working Capital is required for

Purchase of raw materials

Consumable stores / spares

Stock in process

manufacturing expenses

Credit Sales / Bill receivables

The Working Capital requirements may be assessed taking the following aspects into
account.

a) The minimum stocking period of raw materials, finished goods and stores taking into
account the availability of raw materials. the leads time required in obtaining them, advance to
be paid to suppliers and average value of stock-in-process.

b) Percentage of credit sales to total sales and the average time for bills realisation.

c) Advances received from customers and credit in purchase. Banks provide working capital
advances to meet the above requirements.

d) Cash Credit-in the form of running accounts in which drawings are allowed within the
limits sanctioned in proportion to the value of goods hypothecated / pledged.

Bills purchased / discounted:

Banks purchase demand bills accompanied by invoices and documents to title of goods
like LRs, RRs Bills payable after a specified time called usance bills are discounted. Advances
are also granted against book debts arising out of trade transaction in running accounts.

iii) Export Finance:

Pre-shipment credit in the form of Packing Credit is granted against irrevocable letter of
credit or firm orders for purchase of raw material for execution of export orders.

Post-shipment finance is granted after shipment is completed against export bills.

Letter of credits-Banks establish letters of Credit in favour of seller of machinery / raw

material outside or inside the country to enable the transaction to go through.

STEP-7: STATUTORY LICENSES

Some of the requirements which need to be met by a small industry and the procedure for
meeting the same are as follows:

Sl. No.

Product Line / Activity

Licensing Authority

Production programme approval is not

necessary but while obtaining for
Approval of production programme provisional registration brief project outline
for items compulsorily licensable
is submitted to DIC / Development
Commissioner (SSI) New Delhi through
State Directorate of Industries.

For units functioning in places

License from Corporation Commissioner
other Industrial Estate / approved
Municipal authority or Panchayat Board.
Developed Plots

Manufacture of Drugs and

Cosmetics

State Drug Controller, Drug Control

Administratation.

Fruits & Vegetable based products

Dy. Director, Food & Vegetable

Preservation-Shastri Bhavan.

Units employing 10 or more

workers (power used ) or 20 or
more workers (power not used )
approved under Factories Act

Chief Inspector of Factories.

Effuuent disposal

Clearance from District Health Officer,

Director of Public Health, Pollution Control
Board

Registration under Sales Tax Act

Local Joint Commercial Tax Officer

Registration under Central Excise

Act

Superintendent of Central Excise of the area

or Collector of Central Excise.

Power Connection

Local Assistant Divisional Engineer

10

Registration Partnership Firm

Inspector General of Registration, 26, Rajaji

Salai, Chennai

11

Details of ISI Specification (Now

known as BIS)

Bureau of Indian Standards Southern

Regional Office, Taramani, Chennai-600
113.

STEP 8: ACQUIRING INDUSTRIAL SHED:

Factory buildings can be either rented or owned.

Investment in land and building is better to be avoided or kept to the minimum in the
initial stages to avoid locking up of funds and the cost of funds so locked may be serviced so
easily by cash generation.

It is advisable to go for industrial sheds in Industrial Estates / approved areas.

If the factory building is proposed to be constructed, it should be ensured that the land
obtained for the purpose is free from encumbrances and it can be used for industrial purposes
and all the needed infrastructure facilities are available.

Before commencing construction activities, the entrepreneur should obtain necessary

license from the Corporation or Municipal authorities and should also ensure that the plan of
the building confirms to the norms stipulated by the Inspector if Factories.

The Small Industries Development Corporation in all States construct Industrial Sheds
in approved Industrial Estates and Sheds are made available to entrepreneurs on outright
purchase basis.

SFCs and Banks provide finance for acquiring the sheds wherever the project is found
viable.

STEP 9: SELECTION AND PURCHASE OF MACHINERY:

The names of various manufacturers of the required machinery may be ascertained and
quotations obtained. After careful comparison of machinery specifications, quality, delivery
time and price, decision has to be taken for purchase of a particular machinery. Availability
after sales service is an important point to be kept in mind.

The requirements of machinery / equipment, spare parts, tools etc., should be properly
assessed and the proper size if plant and machinery should be decided upon. Once the fixed
assets are created, it will be very difficult to change them later. Only appropriate machinery
should be installed. At times it may be found cheaper and convenient to have some
components bought out or getting done on job work basis from outside than incurring
investments on machinery for manufacturing them.

The New Entrepreneur should formulate a suitable layout which would facilitate
production operations in the best possible manner. He has to pay particular attention to the
maintenance of machinery and equipment, provision of adequate elbow room for each worker
to perform his operations and the need for adequate ventilation to carry out work in congenial
surrounding and so on.

If the enterprise has been so planned as to produce multifarious products, it is known

as a "MULTI-PRODUCT FIRM" and in this case the entrepreneur should endeavor to formulate
judicious "Product Mix" in order to obtain optimum results.

STEP 10: MANPOWER NEEDS-RECRUITMENT OF PERSONNEL:

A realistic assessment of the man-power requirement in skilled, semi skilled and

unskilled category should be made after deciding the size of operations and market
considerations. While unskilled labour is easily available, skilled labour is not always easily
accessible. One may have to resort to Newspaper advertisements or approach Employment
Exchange in this regard. The recruited skilled labour should ensure marching to the task.

Manpower should be recruited only when the machinery is ready for installation and so
also power connection is made available. the others for raw material supply should be placed
simultaneously to commence production without delay. All the statutory clearances should be
obtained while the entire exercise is in progress. Coordination among these various steps /
arrangements is considered essential, as any delay in one part or the other would tell upon the
cost aspects.

STEP11:-POWER CONNECTION:

One major bottleneck in the timely commencement of production is delay in getting

power connection especially if the unit is to be situated in an area where already there is an
overload or new lines have top be laid.

The availability of power should be ascertained before deciding on the location of the
unit itself.

There are two categories of power connection (1) Low Tension (LT) & (2) High Tension
(HT)

A consumer can avail LT supply, only if the connected loan is 150 HP or below .

If the connected loan exceeds 150 HP, the unit is classified as HT consumer.

The entrepreneur should apply in the prescribed form to the Assistant Divisional
Engineer, State Electricity Board.

If the projects are to be located in rural areas, the entrepreneur must ensure the
existence of Industrial feeder and also the required transformer capacity.

STEP 12:- PROCUREMENT OF RAW MATERIALS AND PRODUCTION:

Entrepreneur has to take precaution for the timely and adequate availability of raw
material for continuous production. these should not be unnecessary gap left between
procurement of raw materials and production.

It is always advantageous to identify a number of supply sources instead of depending

on single source.

The national Small Industries Corporation undertakes supply and distribution of

indigenous and imported raw materials.

The prospective entrepreneur should formulate Blue Print covering the actual layout of
the factory ands segregate the areas allocated for carrying out different operations in a
systematic manner.

The total installed capacity of the unit (machinery and equipment) could be the total
quantity of the product which could be produced in " 300 Working Days on a Single Shift Basis"
with the existing manpower.

It may be ensured that the co-ordination of a series of functions according to a wellformulated plan which will economically utilise the plant facilities and regulate the orderly
movement of goods through their entire manufacturing cycle, right from the "procurement of
raw material" to the transportation of " finished products" is utmost essential for increasing
productivity and profits.

Production of "QUALITY PRODUCTS " and " ELIMINATION OF DEFECTS" are the
foremost responsibilities of

entrepreneur and he should be fully conversant with the methods of testing. He should
endeavour to minimize faulty manufacture and should provide "Assurance of Quality" to the
consumers. This would avoid wastage and rejections and improve product-image as well.

STEP 13: SALES:

Every entrepreneur who wants top augment his sales volume should take due
cognizance of :

ESTABLISHED DEMAND as well as PROMOTED DEMAND (newly created) PROMOTION

ACTIVITIES

could be segregated into:

Direct Promotion Techniques and Indirect Techniques.

The small scale enterprise could successfully adopt (with advantage) some of the
following techniques of sales promotion.

DIRECT PROMOTION TECHNIQUES:

Display and models

Advertising

Publicity

Sales connected with special events

Personal selling tactics.

INDIRECT PROMOTION TECHNIQUES:

Customer Services

Public Relations

Cordial Customer Relations

Appropriate Product Design / Style / Packaging

Goodwill of the community.

The new entrepreneur should make every endeavour to win the support of the
"WHOLESALERS" and

"RETAILERS" for wholesalers could be encouraged to handle his

product by offering financial incentives / substantial commissions. Besides, the manufacturer

(entrepreneur) should actively participate in "MARKETING" by maintaining a systematic check
on the effectiveness of his DISTRIBUTION CHANNELS.

The National Small Industries Corporation Ltd., [NSIC] has drawn a long term plan to
provide assistance to the small entrepreneurs in the most vital areas, i.e. marketing of its
products, both in India and abroad. The Corporation markets the products of small
entrepreneurs both under Government Stores Purchase Programme to meet the requirements
of Government Departments, Railways, Defence, etc., as well as under its Internal Marketing
Programme Consortia Approach.

STEP 14: PROFIT:

Regardless of other motivations such as family pride, satisfying nature of work, status
in the community, successful ownership of a firm and so on, "FINANCIAL REWARDS" provide
the best satisfying and profitable experience.

The New Entrepreneur should possess accurate data in regard to the COST OF
PRODUCTION in order to keep a strict control on costs. this would facilitate concrete decisionmaking.

The entrepreneur should workout the project cost covering "NON-RECURRING

EXPENSES" such as Land and Building, Plant and Equipment, pre-operative expenses and son,
as well as " RECURRING EXPENSES" such as working Capital requirements, raw materials,
wages for personnel and so on.

As a rule, cost would be inter-related to the actual volume of production. If the the
volume of production is " ABNORMALLY LOW" the Fixed costs will have to spread over the

while volume thereby the cost becoming duly high. It may be stated that at the "BREAK EVEN
POINT" income from the SALE of products equals COSTS.

The following formulae could be advantageously utilised for ascertaining profits earned
by a small scale enterprise.

Profit per month= Total Sales Revenue per Month-Total Cost per month

Percentage of profit on total investment would be

Profit per montx12x100 /Total investment.

Percentage of profit on Sale: Profit for the year x100/ Total Sales

STEP 15: REPAYMENT OF LOAN INTEREST AND PRINCIPAL

Banks and financial institutions are extremely careful in selecting prospective borrowers
(entrepreneurs) and ascertain their credit-worthiness before sanctioning loans.

The owner of a small scale enterprise is permitted to repay the loan amount on
"Installment Basis" spread over a period of 5 to 6 years, as the case ay be taking into account
the "CASH GENERATION" and "PROFITABILITY" aspects of the project. The quantum of
installment should be consonance with the flow expected income to the entrepreneur and
should not exceed 50% of the incremental income accruing to the borrower.

Normally banks and financial institutions insist on payment of the loan amount along
with interest charges by the borrower as per the "REPAYMENT SCHEDULE" formulated in
respect of the project. The moratorium period normally permitted for repaying the installments
of the Principal amount varies from 12 months to 24 months from the date of first release of
the loan.

Before fixing up the moratorium period, the entrepreneur should impress upon the
banker, the actual "GESTATION PERIOD" involved in respect of his project before commencing
repayments.

Normally, banks and financial institutions permit enhancement of the " REPAYMENT
HOLIDAY" only in exceptional cases.

The b\New Entrepreneur should endeavor to infuse "CONFIDENCE" in the minds of

bankers and financiers by his qualities of credit-worthiness, business-ethics and for
meticulously adhering to the prescribed schedule of repayments. This would in due course
enhance his public image and social status.

STEP 16: PRODUCT DIVERSIFICATION / EVALUATION / EXPANSION:

Once the unit goes on production ands repayment is also commenced, it is not the end
of it. The entrepreneur has to constantly evaluate the past performance, probing the market
and diversification so that a range of products could be added and expanded. This would
enable the entrepreneur to his total share in the market and also more ahead of others pushing
up the overall image of the Company or unit as such. Concurrent of the performance of the
unit, product movement, market, etc., would keep them competitive and improve further as
well.

STEP 17: MODERNISATION AND TECHNOLOGY UPGRADATION:

In then context of growing competition both from the domestic as well as from the
overseas, an entrepreneur cannot rest upon after production from the unit. Against the
background of globalisation and liberalisation one has to keep a constant watch aiming at
producing goods and services at cheaper price, ensuring quality and timely delivery. Keys to
these factors are modernisation and technology upgradation. If these could be adopted then
the entrepreneur could look into the future with confidence.

Guidelines for Preparation of Project

1. Introduction-Project Report:

1.01 The importance and imperative need for a clear cut Project Report, before setting the
project on the anvil hardly needs any over emphasis. The project report must spell out in
unequivocal terms the requirements of various inputs for the projects viz.

Land and Factory Space

Raw Materials
Labour (skilled and Unskilled)
Capital
Organisation

1.02

Details on the capital investment needed, expected return there on, market

situation etc., should be clearly indicated and discussed in the project report. These details
incorporated into the Report would enable the entrepreneur to gain an insight into various
input requirements, Cost and profitability of the venture. Besides, this exercise will also give
him or her sufficient self confidence in the new venture to steer through the same successfully
and nothing will succeed like success.

1.03

Without obtaining financial aid from the Banks and other financial institutions, (in

most of the cases) it is found to be difficult to start new industries. The project contains details
of financial assistance required mentioning the quantum, mode and period of repayment, no. of
installments etc. etc. It is only natural that the banks and financial institutions would like to
know about the techno-economic viability of the project. It is in the interest of the
entrepreneur himself to give a perfect, self explanatory, 'Blue Print' containing all essential
details of the project to the banks and financial institutions.

1.04

The need for the Project Report arises not only for getting financial aid from banks

etc. but also for getting other assistance like Registration Certificates, allotment scarce raw
materials etc. from other agencies like the District Industries Centres.

2. Project Report-At a Glance:

2.01

The project report should be a self-explanatory document capable of evoking

positive response from the bankers. It should contain the following items of information about
the project, each of which should be delineated.
2.02

1. Name of the industry to be started.

2. Address of the unit

3. Product to be manufactured
4. Target of production-monthly-quarterly etc. (in terms of quantity and value)
5. Principal materials required
6. Covered area of work shed-sq. meter
7. Power required-HP
8. Employment
9. Cost of Project
A. Fixed Capital
a. Land & Building
b. Plant & Machinery

B. Working Capital
Carry on trade- 3 months required
C. Total Capital requirement
10. Turnover-Sales expected / year Rs.
11. Expected profit Rs.
12. Expected profit as percentage of expected sales
13. Expected profit as percentage of capital invested
14. Break Even Point
15. Quantum of assistance sought
3. General characteristic of the project:
3.01

Market Potential /Outlook

The project report should throw light on the following aspects.

a. The demand in the local market

b. the demand in the national markets
c. the demand in the international markets.

It is necessary to give sufficient quantitative data covering the above aspects, to

easy response from he banks. The report should bring out the gap between the present
demand for the product in the market and its present production viz the expected future
demand say 5 years hence. It should spell out the extent of competition and its nature,
marketing strategy proposed (whether direct sales or through selling agents / intermediaries)
etc., it should also discuss the export prospects for the products giving the names of the
countries to which these could be exported and the estimates of requirements therein.

3.02 Entrepreneur's Details:

the Project Report should indicate the organisational pattern proposed for the unit
viz., proprietary / partnership / private limited etc., The Bio-data of the proprietor . partner
directors giving their names, age, qualification and experience (technical and business)
including previous experience in the line of manufacture proposed should also be given to
substantiate the technical and managerial competence of the man behind the project. The
Project Report should also give the Registration Certificate Number (if it is registered by DIC)
and enclose an attested copy of the Registration Certificate.

4. Technical characteristics of the Project:

4.01

Project:

Detailed description of the product proposed to be manufactured, standard

specification, usefulness or utility of the product, end user and their approximate numbers etc.,
should be given.

4.02

Manufacturing process/methods/Flow process chart:

It is necessary to give a brief description of the manufacturing methods

/processed, right from the stage of raw materials to that of the finished products. Information
on production, envisaged in the first year and in the next five years or so should be discussed.
It should also contain details on quality control and inspection methods, procedure proposed
to be adopted to, viz., whether Indian Standards Institution's Standard(BIS) proposed etc.,
should be presented clearly.

4.03

The Project should also contain the following details:

a.

the part / components to be manufactured in the unit itself.

b. The parts / components to be formed out or subcontracted to outside units for

assembling later
c.
production.

Maintenance methods to be followed to ensure continuity and regularity in

d. The layout of the machinery taking into consideration of the statutory

regulations regarding
safety, public health, sanitation etc.,
e.

4.04

'Modus Operandi' for effluent disposal etc.,

Location:

A brief description of the proposed location of the factory, the locational

advantages inherent viz., Low Rent, good infrastructural facilities like electric power,
affordable climate, weather, good network of communication facilities, quick transport of raw
materials and finished products and workers, effluent treatment facilities, nearness to
markets, availability of of skilled labour nearby, availability of government subsidy etc., is to
be given. Which of these locational advantages had weighed with the entrepreneur in the
selection / location of the site location should also be indicated.

4.05

Plant and Machinery:

It is necessary to give a brief description in the Project Report about the Plant and
Machinery required for the manufacturing activity with detailed specifications, quality, cost
and availability, whether it is envisaged to acquire the machinery in a phased manner etc.,
Since it may not be necessary to acquire all machinery at one point of time or in the beginning
itself, machinery involves lesser utilisation ( in the initial stages) may be hired on rental basis
from others. The entrepreneur may like to get machines, on hire purchase on easy installments
from organisations like the National Small Industries Development Corporation (NSIC) etc.,
Some machines may have to be imported from other countries depending on the nature of the
products. All these facts and details thereof should be mentioned in the Project Report.

4.06

Testing Equipment:

A list of testing equipments with detailed specifications-purpose, usefulness,

cost, names and address of suppliers is to be given. It is also necessary to state clearly why
these equipments are considered necessary for the unit.

5.

Project Cost:

5.01

Fixed Capital Land and Building:

The extent and cost of the land proposed to be acquired, total cost of the building to
be constructed and the covered area, future expansion if any, indicating the additional covered
area, proposed to be constructed, it cost etc., should be given. If the land and building are to
be taken on rent / lease, the details thereof should also be given.

5.02

Plant and Machinery:

A list of machinery needed for the project along with price should be given. the
total cost has to be indicated.

5.03

Testing Equipment:

The cost of equipments required should be indicated.

5.04

Furniture:

A list of furniture, Office Equipment, typewriters etc., considered essential for the
unit indicating their price / value should be given.

5.05

Product Development Cost:

Details of expenditure to be incurred for undertaking market study, procuring /

requiring foreign collaboration / exchange, development of new business, training of
personnel and payment to consultants etc., will have to be mentioned.

5.06

Pre-operative Expenses:

Details of expenditure initially involved in preparing the project, setting up the

factory, obtaining approval there for raising sufficient

capital, obtaining electric power and

water supply, erection and installation of machinery and other incidental expenditure incurred
during the gestation period of the project should be given.

5.07

Recurring Expenditure:

The requirements of raw material components, parts, sub assemblies for carrying
on production continuously for one month should be given or listed out, both in terms of
quantity and value. If some of these materials are to be procured from aboard or from other
units, such details thereof have to be mentioned. Different consumable items like cotton
waste, lubricants, files, taps, dies hacksaw blades etc., are also to be listed with quantity
required along with price.

Personnel / Labour required:

The list of personnel of different categories to be employed, their number and

monthly salary, allowances, total salary /wage bill etc., are to be furnished.

Utilities:

Expenditure on utilities like electricity, fuel and water is to be indicated.

Other Contingencies:

The monthly expenditure on rent, postal, stationery, transport, selling and

distribution, repairs to machinery is also to be furnished including the total amount.

Working Capital:

The expenditure on raw materials, component parts, sub assemblies consumable,

salaries, wages, utilities and other contingencies etc., as outlines above, if totaled up will give
the Capital required for running the industry for a month. On this basis, the requirements for a
three month period should be worked out which will be the minimum working capital needed
for running the industry. It has been obtained by the experience that only if an entrepreneur

is able to meet the working capital requirements for a minimum three months period, he will
be able to make it as a running proposition.

6. Cost of Production:

In the above paragraphs we have indicated the working capital requirements,

component-wise for running the unit for one month, which multiplied by 12, will give the cost
per year.

There are certain other cost-components like interest on capital (fixed capital and
working capital for three months requirements) say about 50% which might have been paid by
the entrepreneur, Depreciation on machinery say 25% per year, a similar depreciation on
certain assets like Furniture, Typewriters etc., which will also have to be computed for arriving
at the total cost of the production per year. Depreciation will be on a continuing basis in the
second year of production, machinery will be valued at only 90% of its original cost, on which
10% depreciation is to be worked out for the subsequent year. The cost of production has to
be tabulated year by year for a period of 5 years in the project report.

7. Break Even Point:

The main aim of any business enterprise is to make profit. What is Profit? It is the
revenue received over the cot of the production. Even if there is no specific profit, it should be
able to recover all expenses without incurring any loss. Break Even Point is the point in which
the unit is able to recover all expenses. In other words, it is a point at which neither profit is
made nor any loss incurred. It is thus the minimum level of activity at which any unit should
operate. Once the level of operation of a unit is above this point, it then starts generating a
surplus.

Calculation:

The expenses incurred by a unit can be classified into 2 categories, viz., Fixed and
variable expenses. Fixed expenses are those that are independent of the level of activity in the
unit and have to willy-nilly incurred at zero production, salaries of permanent labour. factory
overheads, administration overheads, depreciation and interest on long term loans etc.,

Variable expenses on the other hand have a direct relation to level of activity. Expenditure on
raw materials, packaging materials, utilities selling expenses, interest on short term loans,
wages of Casual labour etc., are to be reckoned under this head.

Break Even Point can be defined as

Fixed cost*100/Contribution.
Contribution=Total Sales-variable expenditure.

Sometimes it becomes very difficult to exactly judge the figure of variable cost in
project at the

planning stage itself. Therefore, the following method of calculation Break

Even Point may be followed.

It can be mathematically shown that the Break Even Point as a percentage of

trunover will work out to:

Percentage of Break Even Point

= F*100/ F+P where F is Fixed cost of the project

and P=Profit anticipated when the whole of the total production is sold.

In this formula, F is computed empirically as per the following procedure.

Fixed Cost /Annum

1.
value)+

Depreciation on machinery per year (normally computed as 20% of the purchase

2.

Depreciation on tools (normally computed as 25% of the purchase value)

3.

Depreciation on Furniture (normally computed as 20% of the Purchase Value)

4.

Annual rent for the Shed and Work Shop area+

5. Interest on total investment ie., fixed capital and working for 3 months (normally
computed as 15%)
6.

40% of the annual salary of all the employees (inclusive of Staff and workers)+

7.

40% of annual expenditure on other consumables (excluding rent)

It may be seen that this method of working is a simple way of arriving at the Break
Even Point even at the planning stage of the project.

The term ' Fixed Cost' is itself not that much rigidly as it will get affected by any
increase in the wages paid to the employees or expenditure against consumables. Similarly
profit anticipated may also vary according to the fluctuation of the price of the end product in
the market and raw material and other inputs. This Break Even Point mat vary from period to
period and as such strict vigil has to be kept up by the concerned on the current Break Even
Point by working out periodically.

8. Profitability Analysis:

The profit has is to be worked out year by year for a period 3 to 5 years. The
percentage of profit, the rate of return on investment and repayment are to be indicated.
Profit=Sales-Cost of Production
% of profit on sales= Profit*100/Sales
Rate of Return=Profit*100/Total investment

9. Cash Flow Analysis:

The Cash Flow statement serves the following purpose. It gives an understanding
of cash readily available and serves as a guide for profiting funds for growth, improving return
on investment planning, repayments etc., To the banker, it gives an insight into (a) the sources
of finance and their utilisation (b) the internal generation of funds at the extent of borrowing
(c) net income (d) repayment capacity. The cash flow statement, has to be worked out for
atleast 3 to 5 years. The following format may be useful.

Particulars
1. Opening Balance(Cash
on hand and in Bank A/c

2. Sources of finance
received during the year
a. Net Profit before taxes,
after deducting

I Year

II Year

III
Year

IV Year V Year

depreciation and
development, rate adding
interest
b. Through Share Capital
c. Through Medium &
Long Term borrowings
d. Deferred payments
e. Short term borrowing
f. Depreciation
g. Government Rebate
h. Government Subsidy
i. Others
Total A
3. Deduct Application
Fund
a. Rise in fixed assets &
capital expenditure
b. Increase in current
assets repayment of long
& medium term loans
c. Repayment of deferred
payments
d. Interest on all loans
e. Taxes
f. Dividends
g. Others
Total B

10. Necessary Aid:

The help and assistance expected from the Bank for the project may be indicated.

RESEARCH INSTITUTIONS IN THE COUNTRY:

Government of India has set up a number of research development institutions under the
fold of council of scientific and industrialists research, besides encouraging many others in
private sectors. Some of the institutions, which have come in the Government fold are as
follows:

1. Central Building Research Institute, Roorkee

2. Central Drug Research Institute, Lucknow

3. Central Electrochemical Research Institute, Karaikudi

4. Central Electronics Engineering Research Institute, Pilani

5. Central Food Technological Research Institute, Mysore

6. Central Fuel Research Institute, Dhanbad

7. Central Glass & Ceramic Research Institute, Calcutta

8. Central Institute of Medicinal & Aromatic Plants, Lucknow

9. Central Leather Research Institute, Chennai

10. Central Mechanical Engineering Research Institute, Durgapur

11. Central Mining Research Station, Dhanbad

12. Central Road Research Institute, New Delhi

13. Central Salt & marine Chemicals Research Institute, Bhavanagar

14. Central Scientific Instruments Organisation, Chandigarh

15. Centre for Biochemical Technology, Delhi

16. Centre for Cellular and Molecular Biology, Hyderabad

17. CSIR Complex, Palampur

18. Indian Institute of Chemcal Biology, Calcutta

19. Indian Institute of Chemical Technology, Hyderabad

20. Indian Institute of Petroleum, Dehra Dun

21. Indian National Scientific Documentation Centre, New Delhi

22. Industrial Toxicology Research Centre, Lucknow

23. Institute of Microbial Technology, Chandigarh

24. National Aerospace Laboratories, Bangalore

25. National Botanical Research Institute, Lucknow

26. National Chemical Laboratory, Pune

27. National Environmental Engineering Research Institute, Nagpur

28. National Geophysical Research Institute, Hyderabad

29. National Institute of Oceanography, Goa

30. National Institute of Science, Technology and Development Studies, New Delhi

31. National Metallurgical Laboratory, Jamshedpur

32. National Physical Laboratory, New Delhi

33. Publications & Information Directorate, New Delhi

34. Regional Research Laboratory, Bhopal

35. Regional Research Laboratory, Bhuvaneswar

36. Regional Research Laboratory, Jammu

37. Regional Research Laboratory, Jorhat

38. Regional Research Laboratory, Thiruvananthapuram

39. Structural Engineering Research Centre, Ghaiabad

40. Structural Engineering Research Centre, Chennai

41. Human Resource Development Group, New Delhi

42. International Scientific Collaboration, New Delhi

43 Technology Utilisation Division, New Delhi

44. Index to Area-wise R& D Activities / Service

These institutions offer analytical and testing facilities, diagnosis of the samples given by
the units including public sector units, offering training programs and also issue bulletins and
publication for the use of common public from time to time. The chief aims of these research
institutions are:

1) To conduct research in respective areas.

2) To develop new process and products in the areas of its specialisation with a view to
provide import- substitution and also to increase export potential of the country.

3) To help both Indian Industries and Government through constant research and
training.

4) To contribute Human Research Development to form University courses in the

disciplines chosen by the respective laboratories to carry out R& D to assist industry in
particular technology observation, upgradation and diversification to provide R & D service to

industries to utilise the design, processes and also testing facilities to provide technology
services for specific needs for high precision and quality, to plan and implement

the effective implementation and decisions of the programs in the target groups, develop
environment-friendly systems conducting research in cognition of the policies of the
Government, to develop appropriate technology relevant to the defense, industrial and social
needs of the country.
1. Central Food Technological Research Institute [CPTRI]
Mysore-570 013, India
Phone : +91 -821 - 25159140 / Fax +91-821 - 2517233
Telex 846-241 FTRI IN: / E-mail prp@cscftri.ren.nic.in
Website: www.sccftri.com
Mission:
*

Generate and apply knowledge of food science and food technology for optimal

conservation and utilisation of the nation's food resources.

*

Integrate scientific and technological knowledge into conventional and traditional

systems and practices, and local and regional realities.

*

Add value and utility to agro-resources through R& D and contribute to sustained

development, food security and food safety.

*

Aid and promote the development of food industry through inter-disciplinary,

innovative and state-of-art solutions.

2. Bureau of Indian Standards:
The Bureau of Indian Standards [BIS], the National Standards Body of India, is a statutory
body set up under the Bureau of Indian Standards Act, 1986.
The functions of the Bureau are:
* Standards Formulation;

* Certification-Product, Eco mark, Quality Management Systems, Environment

Management Systems, Hazard Analysis and Critical Control Points;
* Laboratory-Testing, Calibration & Management;
* Standards Promotion;
* International Cooperation ; and
* Consumer Affairs
Address: C.I.T. Campus, Iv Cross Road,
Chennai-600 113.
Phone: 044-2235 2315 / 2235 1584 / 2235 7519
Fax: 91-044-2235 0089
3. Coffee Board
Profile:
Coffee Board is statutory Organisation under the Ministry of Commerce & Industry,
Government of India.
Its objective is to strive hard for the overall development of the Indian Coffee Industry
and increase domestic consumption of Coffee as well as to enlarge the scope for exportable
grades of Coffee and Instant Coffee.
Address: No. 1, Dr. Ambedkar Veedhi,
Post box No. 5366, Bangalore-560 001.
Tel: 080 -2255920 Fax: 080-2255557
E-mail:dirproma@coffee.kar.nic.in
4. Commissioner of Agricultural Marketing and Agri Business:
The Department of Agriculture Marketing-regulates buying and selling of Agriculture
Products for the benefit of the Farming community, Establishment and maintenance of R.M.S,
Grading of Agricultural Products, Agmark Grading, Agricultural Products, animal Husbandry

and forest products, Raw materials-marketing, Publicity and Propaganda, undertakes Training
of marketing personnel and farmers etc.,
Address: Agriculture's Complex, Chepauk, Chennai-600 005.
TeL: 044-2851 4113 Fax: 044-2854 4669
E-mail : marketing@eth.net Website: www.agri.tn.gov.in
5. Spices Board:
The Spices Board was set up for overall development of spices in export and to assist
farmers increasing production. Its main objective is to develop, promote and regulate export of
spices and also to boost of spices through demonstrations, campaigns and exhibitions etc.,
Address: P.B. No. 2277, Palarivattom, P.O.,
Cochin-682 025, Kerala
Tel: 0484-2333610-616, Fax: 0484-2331429-2334429
E-mail: spicesboard@vsnl.com Website: www.indianspices.com
6. The Marine Products Export Development Authority:
MEPEDA is a nodal agency set up by the Government of India, for promotion of seafood
exports from India. Objectives of MPEDA include export promotion, conservation and
management of fishery resources, registration of marine products exporters, laying down
quality standards and specifications helping the industry in marketing, imparting training in
different aspects of marine products, industry, promotion of eco-friendly shrimp forming, joint
ventures etc.,
Address: P.B. No. 4272, Panampilly Avenue,
Panampilly Nagar, Kochi-36
Tel: 2311979 /2312812

Fax: 2313361 /231812

E-mail: mpeda@mpeda.nin.in Website: www.mpeda.com

7. Coir Board:
The Coir Board implements the following important schemes:

1. Modernisation of extraction and processing of coir fibre.

2. Development of Coir machineries
3. Product development and diversification
4. Extension Service
5. Training
6. Quality Improvement
7. Mahila coir Yojana
8. Welfare Measures
9. Domestic Market Promotion
10. Export Market Promotion
11. Trade Information Service Information Technology and strengthening of HQ
12. Development of production Infrastructure.
13. Economic Market Research.
14. Co-operativisation.

EXPORT PROMOTION COUNCILS IN INDIA

1) AGRICULTURAL PROCESSED FOOD PRODUCTS EXPORTS DEVELOPMENT AUTHORITY
Ansal Chambers II, 6, Bhikaji Carna Place, Africa Avenue, New Delhi-110 021.
2) Apparel Export Promotion Council
Sahyog Building, 58, Nehru Palace, New Delhi-110 019
Mumbai--Bajai Bhavan, Nariman Point, Mumbai-400 021.
Kolkatta-- 2/ 2B, Ho-Chi-Minh Sarani, Kolkatta-700 071.
Chennai--Karumuthu Centre, 498, Anna Salai, Chennai-600 035.
3) Basic Chemical Pharmaceuticals & Cosmetics Export Promotion Council
Jhansi Castle, 7, Cooperage Road, Mumbai-400 039.
Kolkatta--6, Little Russel Street, Kolkata-700 071.
4) Carpet Export Promotion Council

AB-8, 1st Floor, c\Community Centre, Safdarjung Enclav, New Delhi-110 029.
5) Cashew Export Promotion Council
P.B. No. 1709, Chittor Road, Ernakulam South, Cochin-682 016.
6) Chemicals & Allied products Export Promotion Council
World Trade Centre, 14/1B, Ezra Street, Kolkatta-700 001.
Chennai--Rasheed mansion, 622, Anna Salai, Chennai-600 002.
Mumbai--D-17, Commerce Centre, Tardeo Road, Mumbai-400 034.
New Delhi--Lakshmi Niwas, 8, Shaheed Bhagat Sing Marg, New Delhi-110 001.
7) Cotton Textiles Export Promotion Council
Engineering Centre, 9, Mathew Road, Mumbai-400 004.
New Delhi-- 101, Ashoka Estate, Barakhamba Road, New Delhi-110 001.
Chennai--F-2nd Floor, Mount Chambers, 758, Mount Road, Chennai-600 002.
Kolkatta-

World Trade Centre, 14/1B, Ezra Street, Kolkatta-700 001

8) Council for Leather Exports

'Leather Centre', 53, Sydenhams Road,Periamet, Chennai-600 003.
Mumbai--Centre I World Trade Centre, Cuffe Parade, Mumbai-400 005.
Kolkatta--Moti Jung House, 1, Auckland Place, Kolkatta-700 017.
New Delhi--Flat No. 6, G+6H, Gopala towers, Rajendra Place, New Delhi-110 008.
9) Electronics and Computer Export Promotion Council
PHD, House Phase II, Opp. Asiad Village, New Delhi-110 016.
10) Engineering Export Promotion Council
Kolkatta-- World Trade Centre, 14/1B, Ezra Street, Kolkatta-700 001
Mumbai-- Centre I World Trade Centre, Cuffe Parade, Mumbai-400 005.
Chennai-- Malvika Centre, 144/145, Kodambakkam High Road, 3rd Floor,
Chennai-600 034.
New Delhi-- Surya Kiran, 19, Kasturba Gandhi Marg, New Delhi-110 001.
11) Gem & Jewellery Export Promotion Council

Mumbai-- Diamond Plaza, 391-A, Dr. D.Bhadkarnar Marg, , Mumbai-400 004.

New Delhi-- F-33, Jhandewalla Complex, New Delhi-110 055.
Chennai-- High Tower, 40-A, Nungambakkam High Road, Chennai-600 034
12) Handloom Export Promotion Council
Chennai--18, Cathedral Garden Road, Nungambakkam, Chennai-600 034.
New Delhi-- XVI/784-785, Deshbandu Gupta Road, Karol Barg, New Delhi-110
005.
13) Indian Silk Export Promotion Council
Mumbai--62, Mittal Chambers, Nariman point, Mumbai-400 021.
New Delhi-- 16, National park, Lajpat Nagar-IV, New Delhi-110 024.
14) Overseas Construction council of India
Mumbai-- Commerce Centre, Tardeo, Mumbai-400 034.
New Delhi-- Himalaya House, 23, Kasturba Gandhi Marg, New Delhi-110 001.
15) Plastics & Linoleums Export Promotion Council
Mumbai--Centre I, World Trade Centre, Cuffe, Parade, Mumbai-400 005.
Kolkatta-World Trade Centre, 14/1B, Ezra Street, Kolkatta-700 001.
Chennai--Rasheed mansion, 622, Anna Salai, Chennai-600 006.
16) Shellac Export Promotion Council
Kolkatta-- World Trade Centre, 14/1B, Ezra Street, Kolkatta-700 001.
Mumbai-- Sree Santhi Building, 90 Ft, Nath Pai Nagar, Mumbai-400 077
17) Synthetic & Rayon Export Promotion Council
Resham Bhavan, 78, Veer Nariman Road, Mumbai-400 020.
18) Tea Board
Kolkatta--14, Biplabi Trailokya, Maharaj Sarrani(Barborne Road), Kolkatta-700
001.
New Delhi-- Azad Bhavan, 4E/14, Jhandewalan Extn, New Delhi-110 055
Mumbai-- Resham Bhavan, 78, Veer Nariman Road, Mumbai-400 020.
Chennai--# 3, Blacker's Road, Vijaya Complex (Mount Road), Chennai-600 002.

19) Tobacco Road

Guntur- Srinivasa Rao Thota, G.T. Road, Guntur-522 043
New Delhi-- B/4/ 141, Safdarjung Enclave, New Delhi-110 029.
20) Wool & Woolen Export Promotion Council
Mumbai--Churchgate Chambers, 5, New marine Lines, Mumbai-400 020.
New Delhi-- 612, Ashoka Estate, 24, Barakhamba Road, New Delhi-110 001.
Export Promotion Agencies:
1. Joint Chief Controller of Import & Exports, 192, Peters Road, Chennai-600 014.
2. Export Import Bank of India, 29, Rajaji Salai, Chennai-600 001.
3. Export inspection Agency, 213, R.H. Road, Chennai-600 014.

045.

4. Chennai Export Processing Zone, Administrative Block, Tambaram, Chennai-600

WHOM TO CONTACT AND FOR WHAT

NEED
1. Registration

2. Technical Consultancy

3. Training in Industrial Management Courses

including Marketing Management and Market
Research / Technical / Trade Entrepreneur
Development Programmes etc.

CONTACT
The General Manager, District Industries Centre of
respective District, Regional Joint Director of
Industries & Commerce, Chennai (in respect of
Chennai City only)
a.

Entrepreneurship Development Institute,

Chennai-16

b.

MSME Development Institute (MSME-DI),

Chennai-32.

c.

District Industries Centres (DIC)

d.

ITCOT, Greams Road, Chennai-6

e.

Tamilnadu Small & Tiny Industries

Association, Chennai-32

f.

TANSTIA-FNF Service Centre, Chennai-32.

a.

Entrepreneurship Development Institute,

Chennai-16

b.

Small Industries Service Institute (SISI),

Chennai-32

c.

Tamilnadu Small & Tiny Industries

Association, Chennai-32

4. Allotment of developed plots & sheds in

Industrial Estates

d.

TANSTIA-FNF Service Centre, Chennai-32

a.

Tamil Nadu Small Industries Development

Corporation Ltd., (TANSIDCO), Head Office,
Thiru Vi Ka Industrial Estate, Guindy,
Chennai-32.

b.

At district, the Branch Offices of

TANSIDCO

c.

Director of Industries & Commerce,

Chepauk, Chennai-5 for Functional
Industrial Estate of Electronic Industries.

5. Supply of machinery on Hire Purchase basis The National Small Industries Corporation Ltd.,
& Lease basis
(NSIC), 615 Anna Salai, Chennai - 600 006.
6. Raw Materials
7. Finance

TANSIDCO & NSIC

1.

The Tamil Nadu Industrial Investment

Corporation Ltd., (TIIC), 473, Anna Salai,
Chennai-600 035 and its branch offices.

2.

Nationalised Banks

3.

Small Industries Development Bank of

India, Nandanam, Chennai-600 005.

4.

Director of Industries & Commerce,

Chepauk, Chennai-600 005

8. Manufacturing Licence

Local bodies or other authorities concerned contact local DIC for details.

9. Purchase of Government of India

Publications.

Publication Division - Government of India,

Ministry of Information & Broadcasting, Sales
Emporium, Rajaji Bhavan, Besant Nagar, Chennai 90.

10. For getting technical details of patented

process of Government of India, Research
Laboratories on payment of Royalty etc. and
for new inventions.
11. For assistance / guidance in setting up
Khadi & Village Industries

The National Research Development Corporation

Ltd., 2022 Zamrutpur Community Centre, Kailash
Colony Extension, New Delhi-110 048.
Khadi & Village Industries Commission, 236, Avvai
Shanmugam Road, Gopalapuram, Chennai - 600
088.

State Khadi & Village Industries Board,

Kuralagam, Chennai-600 108 & Asst. Director
(KVIB) of districts.
12. ISI Mark and allied details

Bureau of Indian Standards, Opposite Modern

Bakeries, Tharamani, Chennai - 600 113.

13. Training Programme in packing industries

Indian Institute of Packaging, Plot-169, Industrial

Estate, Old Mahabalipuram Road, Chennai - 96.

14. Testing of Products and allied information

1.

National Test House, CSIR Complex,

Taramani, Chennai-600 113.

2.

Regional Testing Centre, SISI Campus,

65/1, GST Road, Guindy, Chennai - 32.

3.

Chemical Testing Laboratory, Directorate of

Industries & Commerce, Industrial Estate,

Guindy, Chennai-32 and other Testing Labs
attached to Directorate of Industries &
Commerce (contact DIC)
15. Marketing

1. TANSIDCO

2. NSIC

3. MSME-DI

16. For Patents Registration

Asst. Controller of Patents & Designs, Annexe-II,

6th Floor, 443, Anna Salai, Chennai-18.

17. Trade Mark Registry

Deputy Registrar, Trade Marks Registry, D Wing,

Rajaji Bhavan, Besant Nagar, Chennai - 600 090.

18. Licence for compulsory Licensable items

Director General of Technical Development, Udyog

Bhavan, New Delhi-110 011 through industries
Department, Fort St. George, Chennai-600 009.

19. For Registration of partnership deeds

Inspector General of Registration, 26 Rajaji Salai,

Chennai-600001 and area offices attached to it.

20. For Registration as a Corporate body (Ltd., Registrar, Company Law Board, Shastri Bhavan,
Companies)
Chennai-600006.
21. For Registration under Factories Act

Inspector of Factories of the area concerned.

22. For clearance under Pollution Control Rules Tamilnadu Pollution Control Board, Chennai-32.
23. Central Excise Registration

Superintendent of Central Excise of the area

concerned

24. Registration of Sales Tax

Deputy / Joint Commercial Tax Officer concerned

25. For Registration of units manufacturing

items falling under Explosives Act

Dy. Chief Controller of Explosives, 140, Rukmani

Lakshmipathy Road, Chennai - 600 008.

26. For Registration of units F.P.O.

Dy. Director (F & VP), C-1-D, Rajaji Bhavan, Besant

Nagar, Chennai - 600 090.

27. For Foreign Collaboration

Foreign Collaboration Cell, Ministry of Industry,

Govt. of India, Udyog Bhavan, New Delhi - 110 001
through State Industries Department.

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NEW ( ONGOING ) SCHEMES

I. INTEGRATED INFRASTRUCTURAL DEVELOPMENT SCHEME
Pursuant of policy measures for promoting and strengthening small, tiny and village
enterprises, Ministry of Industry, Department of Small Scale Industries Agro and Rural
Industries, Government of India have launched Integrated Infrastructural Development
Scheme (IID) in March 1994 for Small Scale Industries in Rural and Backward areas. Under
this scheme, Central Government and SIDBI will provide an amount not exceeding Rs.500
lakhs as grant and loan (by SIDBI) in the ration 2:3 respectively to each centre (Industrial
Estate) to undertake development of land / plots and to create infrastructure facilities like
construction of road, drainage, water supply, power distribution network, effluent treatment,
common facilities / amenities, etc. The cost in excess of Rs.500 lakhs will be met by the
implementing agencies. The implementing agency can implement the Scheme from their own
funds also and in such cases the 40% grant will be disbursed to the implementing agency

directly. Government of India have now modified the scheme to the effect that the 50% of the
IID centres sanctioned should be in backward and rural area and 50% of plots should be
allotted to tiny industries.
TANSIDCO has obtained sanction for formation of the following six new Industrial Estates:

Sl.No.

Project Cost sanctioned

(Rs.inlakhs)

Name of the Project

MAHIA (Urangampatti)

444

Thirumudivakkam (Kancheepuram Dist.)

560

Vichoor (Thiruvallur District)

200

Thirumuallivoyal (Thiruvallur District)

475

Valavanthankottai

615

Karuppur (Salem)

213

Further Government of India is now sanctioning assistance under IID schemes for
strengthening and upgrading the infrastructure of existing Industrial Estates. The following
two Industrial Estates have been taken up by TANSIDCO under this scheme.
Rs. in lakhs
1.

Guindy Industrial Estate

2.

Hosur Industrial Estate

1002.24
62

II. ADDITIONAL CENTRAL ASSISTANCE SCHEME

The Government have now sanctioned Rs.200 lakhs under Additional Central Assistance
Scheme for the year 2003-2004 under the head 'Upgradation of Industrial Estates' for
upgradation of infrastructure in four Industrial Estates of TANSIDCO.
Under this scheme, the beneficiaries i.e. unit holders of the Industrial Estate / SSI Association
have to contribute 40% of such project cost in instalments with reasonable initial payment.
After having discussion with the Manufacturers' Association of the concerned Industrial
Estates, the following four Industrial Estates have been taken up for upgradation by TANSIDCO
under this scheme.

Sl.No.

Name of the Industrial

Estate

Scheme Cost

Contribution by
Beneficiaries

Funds available under

ACA

120

48

72

Kappalur

Pettai

24

9.60

14.40

Kakkalur

65

20

45

Ranipettai

110

44

66

III. INDUSTRIAL INFRASTRUCTURE UPGRADATION SCHEME

The Department of Industrial Policy and Promotion, Government of India has introduced in the
10th Five Year Plan, a new scheme called Industrial Cluster Development Scheme for

upgradation of Industrial Clusters. Now, the above Scheme has ben renamed as Industrial
Infrastructure Upgradation Scheme (IIUS).
Objective
The Primary objective of the IIUS scheme is to improve international competitiveness of the
domestic industry by strategic interventions to provide quality infrastructure by encouraging
public-private partnership in infrastructure development to all sectors of the industry and
secure improvements in performance against a set of competitiveness indicators to be
developed in consultation with the each industrial group.
Eligible activities:
i) Upgradation of physical infrastructure-transport, road, water, power (captive generating
units, transmission and distribution) Communication, Common effluent treatment plant and
conveyance and solid waste management.
ii) Upgradation of HRD facilities including skill upgradation
iii) Strengthening of R and D Infrastructure
iv) Common tool room
v) Information / Marketing infrastructure
vi) Financial infrastructure
Funding pattern
The funding pattern envisaged in the scheme is that Central Assistance per cluster / location
wil be restricted to 75% of the project cost subject to a ceiling of Rs.50 crore. The remaining
25% will be financed by other stake holders of the respective cluster/location with minimum
industry contribution of 15% of total project cost and Government funding will be confined
only to creation of durable assets and activities relating to productivity enhancement and no
recurring expenditure will be funded from Government contribution.
Special Purpose Vehicle (SPV)
SPV as envisaged in the scheme for leveraging the funds, will be a Corporate Body/Association
with certain minimum contribution from the industry and it will ensure sustainability of assets
created by appropriate user charges/revenue generation mechanism.
Hence SPV should be formed under Companies/Societies Act.
At present, TANSIDCO participate in the following IIUS in Tamilnadu:
1) Cluster of Auto ancillary units
It is proposed to implement Industrial Infrastructure Upgradation Scheme for the cluster of
Auto Components Manufacturing units located at Ambattur, Thirumudivakkam and
Thirumazhisai Industrial Estates in association with Automobile Component Manufacturers

functioning inside / outside Industrial Estates and the vehicle manufacturers at a total project
cost of about Rs.51.50 crores. As regards providing physical infrastructure under the scheme,
the major thrust is proposed for upgradation of the above Industrial Estates.
2) Pharmaceutical Cluster
It is proposed to implement the Industrial Infrastructure Upgradation Scheme for the cluster
of Pharmaceutical units located at TANSIDCO Industrial Estate, Alathur and other
pharmaceutical units in Tamil Nadu at a total project cost of about Rs.20 crores.
3) Pumps & Motors Cluster
TANSIDCO associates in the proposal for the cluster of Pumps & Motors manufacturing which is
being prepared by CODISSIA, at a total project cost of about Rs.66 crores at Coimbatore. The
proposal also includes the upgradation of infrastructure of TANSIDCO Industrial Estate at
Kurichi, Coimbatore.
4) Engineering & Technical Cluster
TANSIDCO also participate in the project of cluster covering Engineering industries at Tiruchy
which is being prepared by BHELSSIA at a clost of about Rs.65 crores. The project covers the
Engineering industries located in Tiruchy District and include the upgradation of the physical
infrastructure of Industrial Estates under the control of SIDCO namely Thuvakudi,
Thiruverambur and Ariyamangalam.
IV) SETTING UP OF TECHNO PARKS
TANSIDCO also contemplate for formation of Techno Parks i.e. micro industrial estates with
necessary common service facilities at the following places in the State:
1.

Vinnamangalam (Vellore District)

2.

Mayiladuthurai (NagapattinamDistrict)

3.

Vadaveeranaickenpatti, Theni (Theni District)

4.

Kumbakudy (TiruchyDistrict)

5.

Rasapalayam (Namakkal District)

Necessary steps are taken to get land at these places for setting up of Techno Parks.
V. DESIGN INNOVATION INCUBATOR
Over a period of time, the strategy of yester years developed and implemented promoting new
entrepreneurial ventures is found to be short of meeting the current requirements for
promoting new technology-based ventures, mainly in the information-communicationtechnology enabled services. The Department of Science and Technology (DST) of the
Government of India, duly recognizing this, has sponsored a proposal to establish a "Design
Innovation Incubator" at Tiruchy for providing common hardware and software facilities to
new start-up industries in particular and to existing industry also, mainly in

CAD/CAM/CAE/GIS Disgitisation areas. The project outlay is Rs.1.73 crores and the incubator
is expected to go on stream during 2004-05.

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Download Application Forms

For Allotment of Sheds and Plots in IE
For Enrolment under Marketing Assistance Scheme
For Enrolment under Export Assistance Scheme

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