Apply for the NEEDS Scheme: 25% Capital Subsidy and 3% Interest Subvention

The New Entrepreneur-Cum-Enterprise Development Scheme (NEEDS) is a flagship initiative by the Department of Micro, Small and Medium Enterprises, Government of Tamil Nadu. It aims to support educated first-generation entrepreneurs by providing training, financial assistance, and infrastructure support to establish new manufacturing or service enterprises.

Details

• The scheme provides entrepreneurship training, helps in business plan preparation, and financial tie-ups with banks or TIIC.

• Offers capital subsidy of 25% of the project cost (up to ₹75 lakh) and 3% interest subvention.

• Project cost limit: ₹10 lakh to ₹5 crore.

• SIDCO plot/shed allotment preference is provided (subject to availability).

Objectives

• To groom first-generation entrepreneurs with training and support for launching enterprises.

• To facilitate term loans from banks/TIIC for eligible business ventures.

• To provide up to 25% subsidy (max ₹75 lakh) and 3% interest subsidy.

• Reserved plots/sheds in SIDCO estates (up to 25% allotment).

Activities Covered

• All economically viable manufacturing and service activities subject to appraisal.

• Priority to:

  • Eco-friendly projects

  • Energy-saving initiatives

  • Export-oriented industries

Ineligible Activities

• Agriculture, sericulture, animal husbandry

• Plastic carry bags <40 microns

• Alcohol-related industries (distilleries, breweries, etc.)

• Real estate, saw mills, cement, mining, repacking of drugs

• Hazardous/red-category industries (as per TNPCB)

• Business and trading activities

• Industries using ozone-depleting substances

• Firecrackers, dyes, pan/beedi/cigarette production

Training Institute and Methodology

• Conducted by Entrepreneurship Development Institute (EDI), Guindy, Chennai

• Includes:

  • Behavioral and management games

  • Business opportunity guidance

  • Interaction with successful entrepreneurs

  • Technical and financial training

  • Exposure visits

Benefits

• Capital Subsidy: 25% of project cost (maximum ₹75 lakh)

• Interest Subvention: 3% on loans through TIIC/Banks

• SIDCO Preference: Priority allotment in industrial estates

• Additional 10% Capital Subsidy: For SC/ST/Differently-abled entrepreneurs

Eligibility

• Resident of Tamil Nadu for at least 3 years

• First-generation entrepreneur

• Age:

  • General: 21–35 years

  • Special categories (SC/ST/OBC/Women/Ex-Servicemen/Transgender/Differently abled): up to 45 years

• Education: Minimum 12th/ITI/Diploma/Vocational training

• Project Cost: ₹10 lakh – ₹5 crore

• Promoter’s Contribution:

  • General: 10%

  • Special Category: 5%

• Must not have availed benefits under PMRY, PMEGP, UYEGP, TAHDCO, etc.

• No income ceiling

• No loan default history

• EDP Training is mandatory

• Land value (if in applicant’s name) can be considered as contribution

Note: Partnership firms are allowed if all partners meet eligibility; EDP training to be done by one nominated partner.

Application Process

Mode: Online

Steps:

1. Visit the MSME Tamil Nadu Official Website

2. Click “Apply Online” > “New Application”

3. Register with Name, Aadhaar, DOB, Email, Mobile

4. Login and fill the application form

5. Upload necessary documents and submit the application

Post-Submission Process:

1. Applications reviewed by District Task Force Committee

2. Selection based on qualification, viability, marketability, etc.

3. Recommended applications forwarded to banks/TIIC

4. Provisional sanctions issued

5. EDP training arranged through EDI; certificate issued

6. Eligible entrepreneurs allotted SIDCO plots/sheds

7. Promoter deposits contribution; loan disbursed

Documents Required

• Aadhaar Card / Voter ID (Identity Proof)

• PAN Card

• Passport-size Photograph

• Educational Certificates

• Age Proof

• Community/Caste Certificate

• Domicile/Residence Certificate

• Disability/Ex-Serviceman/Transgender Certificate (if applicable)

• Bank account details

• Other relevant documents as specified

Frequently Asked Questions

• Q: What is the maximum subsidy?
  ₹75 lakh (25% of project cost)

• Q: Who is eligible?
  First-generation entrepreneurs aged 21–35 (or 45 for special categories) residing in Tamil Nadu with min. 12th standard qualification

• Q: Can partnerships apply?
  Yes, if all partners meet eligibility. Only one partner needs to take EDP training.

• Q: Is land counted as contribution?
  Yes, based on guideline/market value (whichever is lower), if in applicant’s name.

• Q: What is the interest subvention?
  3% subvention provided by the state government

Sources and References

• Official Website

• Guidelines