The move came after a delegation of small scale industry representatives from Coimbatore and others met the Chief Minister here and apprised her of the current situation.
In a statement, Jayalalithaa said she had directed reducing VAT on gensets from the present 14.5 per cent to five per cent, besides extending VAT waiver on furnace oil with retrospective effect from October 1, 2012 to May 31, 2013. She said this would result in a Rs 97 crore loss to the government.
Earlier, a similar waiver had been given from February 1, 2012 to September 30, 2012.
Further, the margin money on loans obtained for buying gensets through Tamil Nadu Industrial Investment Corporation has been reduced from 20 per cent to 10 per cent, she said.
"These efforts by my government would help in entrepreneurs generate additional power through gensets and ensure more employment opportunities and production," she said.