Needs

New Entrepreneur-cum-enterprise Development Scheme

6.5/10

The scheme “New Entrepreneur-Cum-Enterprise Development Scheme (NEEDS)” was launched by the Department of Micro, Small and Medium Enterprises, Government of Tamil Nadu. The scheme was devised and formulated as a special scheme to assist educated youth to become first-generation entrepreneurs.

State In Kind

States / UT: Tamil Nadu

Nodal department: Micro Small and Medium Enterprises Department

Scheme for: Individual

Scheme profile

DBT (direct benefit transfer): No

Scheme open date: 2012-10-29

Categories: Business & Entrepreneurship

Sub-categories: Setting up / start-up / entrepreneurship, Loan

Target beneficiaries: Individual

Tags: Entrepreneur, NEEDS, Loan, Subsidy, MSME

Details

The scheme “New Entrepreneur-Cum-Enterprise Development Scheme (NEEDS)” was launched by the Department of Micro, Small and Medium Enterprises, Government of Tamil Nadu. The scheme was devised and formulated as a special scheme to assist educated youth to become first-generation entrepreneurs. Under this scheme, educated youth will be given entrepreneur training, assisted to prepare their business plans, and helped to tie up with financial institutions to set up new business ventures, besides linking them with major industrial clients. They will be assisted to avail term loans from Banks/Tamil Nadu Industrial Investment Corporation (TIIC) with capital subsidy at 25% of the project cost not exceeding ₹75 lakhs and soft loans with 3% interest subvention. The Entrepreneurship Development Institute and TIIC will play a crucial role in this process.
The scheme aims to provide training to young first-generation entrepreneurs in conceiving, planning, initiating, and launching manufacturing or service enterprises successfully. On successful completion of the training programme, they will be assisted to get term loans from Banks /Tamil Nadu Industrial Investment Corporation Limited (TIIC) to set up manufacturing or service enterprises with margin money assistance.

Objectives of the Scheme:
  1. Educated youth will be given entrepreneurship training to groom them as first-generation entrepreneurs on the essentials of conceiving, planning, initiating, and launching a manufacturing or service enterprise successfully.
  2. On completion of the training program, they would be assisted to prepare their business plans and helped to tie up with financial institutions to get term loans, to set up manufacturing or service enterprises with a project cost not exceeding ₹5 Crore and capital subsidy of 25% of the project cost not exceeding ₹75 lakhs with 3% interest subvention to be provided by the State Government.
  3. Subject to availability, they would also be provided with reservation up to 25% for allotment of Plots / Sheds in SIDCO Industrial Estates in the State.
Activities covered:

All economically viable manufacturing and service activities are eligible under this scheme subject to appraisal for their viability as per the guidelines of Tamil Nadu Industrial Investment Corporation Limited (TIIC) / Bank. Priority will be given to projects which are eco-friendly, accord importance to energy conservation, and are export-oriented.

List of Ineligible Activities:

The following activities, listed below, will not be eligible for assistance under this scheme:

  1. Any activity directly connected with agriculture.
  2. Sericulture (Cocoon rearing), Animal Husbandry like Pisciculture, Piggery, Poultry, etc.,
  3. Manufacturing of Polythene carry bags of less than 40 microns thickness and manufacture of carry bags or containers made of recycled plastic for storing, carrying, dispensing, or packaging of foodstuff
  4. Sugar
  5. Distilleries, Brewery, and Malt Extraction
  6. Units utilizing Molasses/rectified spirit/de-natured spirit as raw material for the manufacture of potable alcohol.
  7. Fertilizer manufacture and blending (Except bio-fertilizers)
  8. Mining and Quarrying Ores, minerals, etc. [Excluding polishing, cutting, crushing, etc. of mined ores/minerals]
  9. Aluminium, Iron, and Steel Smelting [Excluding foundries]
  10. Manufacturing of intoxicant items like Beedi / Pan / Cigar / Cigarette etc.,
  11. Saw Mills
  12. Cement
  13. Calcium Carbide
  14. Slaughter House
  15. Re-packing of Drugs / Medicine / Chemical, without any processing or value addition
  16. Azoic / Reactive Dyes
  17. Fire Crackers
  18. Industries manufacturing and or utilizing Ozone depleting substances
  19. Industries involving hazardous activities / classified as “Red category” by Tamil Nadu Pollution Control Board / Central Pollution Control Board
  20. Cyanide
  21. Caustic Soda
  22. Potassium Chloride
  23. Nylon, Rayon & Polyester Fibre manufacturing. [Excluding manufacture of downstream products from Nylon, Rayon & Polyester Fibre]
  24. Real Estate
  25. All types of Business activities.
Training Institute and Methodology of the Training:

The Entrepreneurship Development Programme (EDP) Training will be imparted through Entrepreneurship Development Institute, Guindy, Chennai.
The trainees will be exposed to Behavioural Components, Business Opportunity Guidance and Preparing bankable Business Plans, Information on Entrepreneurship support Institutions, Business Laws and Regulations related to Micro and Small Enterprises, Management issues, and Technical Training in the specific technology sector. An innovative methodology by combining Behavioural & Management Games, Lecture cum discussion supported by audiovisuals, Interaction with successful entrepreneurs, Intensive Technical Training, and Exposure visits will be adopted.

Subsidy:

25% of the Project Cost subject to a ceiling of Rs.75.00 lakhs as a subsidy from the Government. However, the following expenses will not be considered for the calculation of subsidy under this scheme:

  1. Cost of rented/leased building
  2. Technical know-how
  3. Preliminary/ pre-operative expenses
  4. Working capital margin
Rate of interest:

Enterprises financed by TIIC/Banks will be charged at the rate of interest applicable to micro & small enterprises as per banking norms.

Benefits

  • 1. Under the scheme subsidy assistance will be provided by the State Government up to 25% of the project cost (Subject to a maximum limit of ₹75 Lakhs). 1. Interest subvention provided at the rate of 3%
  • throughout the period of repayment. 1. Priority in allotment in Small Industries Development Corporation (SIDCO) industrial estates. 1. An additional capital subsidy is provided for 10% over the capital subsidy of the eligible project cost to the enterprises promoted by SC/ST or differently-abled candidates
  1. Under the scheme, subsidy assistance will be provided by the State Government up to 25% of the project cost (Subject to a maximum limit of ₹75 Lakhs).
  2. Interest subvention provided at the rate of 3%, throughout the period of repayment.
  3. Priority in allotment in Small Industries Development Corporation (SIDCO) industrial estates.
  4. An additional capital subsidy is provided for 10% over the capital subsidy of the eligible project cost to the enterprises promoted by SC/ST or differently-abled candidates.

Eligibility

  1. The applicant should be a resident of Tamil Nadu State for not less than 3 years.
  2. The applicant should be a first-generation entrepreneur.
  3. The age of the applicant should be between 21 to 35 years in general and for special (Women/BC/MBC/SC/ST/Ex-servicemen/Transgender/Differently abled), age relaxation is up to 45 years.
  4. The applicant should possess a minimum 12th std./diploma/ Industrial Training Institutes (ITI) or vocational training from a recognized Institution, aspiring to become entrepreneurs would be eligible for assistance under the scheme.
  5. There will be no income ceiling for assistance in setting up projects under this scheme.
  6. Assistance under the Scheme is available only for new projects sanctioned specifically under the NEEDS.
  7. Entrepreneurs who have already availed assistance under Prime Minister’s Rozgar Yojana (PMRY), Rural Employment Generation Programme (REGP), Prime Minister’s Employment Generation Programme (PMEGP), Unemployed Youth Employment Generation Programme (UYEGP), Tamil Nadu Adi Dravidar Housing and Development Corporation Limited (TAHDCO) or any other scheme of Government of India or State Government will not be eligible for assistance under the NEEDS.
  8. Any applicant/entrepreneur who has availed loan for economic activity under Self Help Group/other group activity will also be not eligible.
  9. The applicant should not be a defaulter to any Commercial Bank / Tamil Nadu Industrial Investment Corporation Limited (TIIC).
  10. Entrepreneurs availing assistance under this scheme will not be eligible to avail of capital subsidy under any other State Government schemes.
  11. Project cost should be above ₹10 lakh, and below ₹5 crore.
  12. The applicant's contribution should be 10% of the project cost for the General category; and 5% for the Special category.
  13. Entrepreneurship Development Programme (EDP) training is mandatory.

Note 01: Subject to satisfying the eligibility criteria by all the partners, partnership concerns may be considered for assistance under the scheme. However, EDP training will be provided to only one of the partners authorized by other partners in such cases.
Note 02: The value of the land may be considered as the promoter’s contribution, either in part or in full, as per guideline value or market value, prevailing as on the date of filing of the loan application, whichever is lower, subject to the condition that the title of the land is in the name of the entrepreneur/enterprise proposed to be established.

How useful is this scheme?

Public benefit analysis

A practical look at this scheme for citizens

AI-generated insights showing how useful, accessible, and practical this scheme may be — combining deterministic scoring rules with a public-policy LLM analyst.

6.5
/ 10
Public Benefit Score
Accessibility 6.0/10 Moderate
Rural usefulness 5.0/10 Moderate
Application complexity 6.5/10 Moderate
Financial impact 9.5/10 Good
Literacy barrier 8.0/10 Challenging
Women inclusivity 8.0/10 Good
Awareness 4.5/10 Moderate
Implementation reliability 7.0/10 Good
Bigger shape means a better fit for citizens
  • Accessibility6.0
  • Financial impact9.5
  • Rural utility5.0
  • Awareness4.5
  • Simplicity3.5
  • Inclusivity8.0

What problem does this scheme solve?

The New Entrepreneur-cum-enterprise Development Scheme (NEEDS) aims to empower educated youth in Tamil Nadu to become first-generation entrepreneurs through training and financial assistance.

Key challenges addressed

  • Lack of entrepreneurial opportunities for educated youth
  • Access to financial support for starting businesses

Most beneficial for

  • Educated youth aged 21-35
  • First-generation entrepreneurs
  • Women and marginalized communities

Likely challenges

  • Complex application process
  • Digital literacy requirements
  • Awareness about the scheme

Practical insights for citizens

While the scheme provides valuable support, the application process may deter potential beneficiaries due to complexity and digital requirements.

Rural challenges

  • Limited access to digital resources
  • Lack of awareness in rural areas

Digital challenges

  • High dependency on online application process
  • Need for digital literacy

Implementation bottlenecks

  • Complex eligibility criteria
  • Potential delays in loan disbursement

Awareness challenges

  • Limited outreach in rural areas
  • Need for better communication of benefits

Application analysis

Application mode
Online portal
Documents burden
Minimal, but requires specific documents for verification
Verification complexity
Moderate, involves scrutiny by a Task Force Committee
Office dependency
Moderate, requires interaction with banks and TIIC
CSC support
Limited, primarily online
Estimated citizen effort
Moderate, requires time for training and application

Estimated beneficiary reach

  • Rural / urban reach Moderate
  • Gender reach High
  • Occupation reach Entrepreneurs

Benefit analysis

Benefit type
In Kind
Benefit frequency
One-time assistance
Benefit practicality
High, as it provides substantial financial support for business setup
Financial meaningfulness
9
Long-term impact
Positive, as it encourages entrepreneurship and economic growth

Plain-language guidance

The NEEDS scheme helps educated youth in Tamil Nadu start their own businesses by providing training and financial support. It is designed for first-time entrepreneurs aged 21-35.

Who should apply
Educated youth in Tamil Nadu looking to start a business.
Who may struggle
Individuals with low digital literacy or those unfamiliar with online applications.
Best application route
Apply via the official online portal of the Micro, Small and Medium Enterprises Department.

This intelligence section is generated by an AI policy analyst combined with rule-based scoring. Scores and narrative are estimates derived from the publicly available scheme information shown on this page; actual experience may vary by state, district, and department. Always confirm details on the official portal before you apply.

Application Process

Online

Application Processes:

Step 01: The applicant willing to avail loan under the NEEDS scheme should fill up the online application through the Official Website of the Micro, Small and Medium Enterprises Department, Government of Tamil Nadu.
Step 02: On the home page, click on “Apply Online” and then “New Application”.
Step 03: Click on ‘Register’ and fill in the details like Name, Date of Birth, Email ID, Aadhaar Number & Mobile Number.
Step 04: After successful registration, click on ‘login’ and fill in all the mandatory details.
Step 05: Upload all the necessary documents and submit the application form.

Post-Application Process:

Step 01: The received applications will be scrutinized and shall be placed before the Task Force Committee.
Step 02: The Selection will be based on qualification, skill, aptitude, viability of the proposed project, marketability, interview/screening of the applicant, etc.
Step 03: The selected applications will be sent to the bank / Tamil Nadu Industrial Investment Corporation Limited (TIIC) branches by the General Managers, District Industries Centres in proportion to the target fixed by the Industries Commissioner and Director of Industries and Commerce.
Step 04: The bank / Tamil Nadu Industrial Investment Corporation Limited (TIIC) branches shall assess the potentiality and will issue provisional sanctions to eligible beneficiaries. The provisional sanctions shall be intimated to the concerned District Industries Centres.
Step 05: The District Industries Centres shall arrange for compulsory Entrepreneurship Development Programme training by the Entrepreneurship Development Institute. On completion of training, Entrepreneurship Development Institute will issue training certificates.
Step 06: After successful completion of Entrepreneurship Development Programme training (EDP), those beneficiaries whoever apply, shall be allotted Developed Plot / Work Sheds at Small Industries Development Corporation Limited (SIDCO) managed Industrial Estates, at the cost fixed by Small Industries Development Corporation Limited (SIDCO), subject to the availability of the same on priority basis by Small Industries Development Corporation Limited (SIDCO).
Step 07: Subsequently, the beneficiary will deposit the Promoter’s Contribution with the bank / Tamil Nadu Industrial Investment Corporation Limited (TIIC). Thereafter, the bank / Tamil Nadu Industrial Investment Corporation Limited (TIIC) will disburse the 1st installment of the bank finance to the beneficiary.
Procedure for Online Filling of Application Dos and Don’ts

Clarifications

Additional points from the scheme information published on myScheme (not legal advice).

Who are the beneficiaries?

First Generation Individual Entrepreneur (Proprietorship) or Group of Entrepreneurs (Partnership), provided that all members of the partnership should be First Generation Entrepreneurs.

Whether partnership projects are considered under this scheme?

Yes, subject to the condition that the eligibility criterion as prescribed in the NEEDS G.O. is fulfilled by each and every individual of those entered into the partnership deed, partnership concerns may be considered for assistance under this scheme.

What is the age limit to apply under NEEDS?

The applicant must be of age between 21 -35 in general and for special (Women/BC/ MBC/ SC/ST/Ex-servicemen/Transgenders/Differently abled), age relaxation upto 45 years

Anyone residing outside Tamil Nadu State can start business in Tamil Nadu under NEEDS?

No, the applicant should be a resident of Tamil Nadu State for not less than 3 years.

Can anyone residing in Tamil Nadu start business anywhere in Tamil Nadu under NEEDS?

Yes, in such a case, for example, a resident of Kanyakumari District can start an enterprise in Chennai District and vice versa.

Is there any income ceiling to get assistance under NEEDS?

No, there is no family income ceiling prescribed for assistance in setting up projects under this scheme.

What is Project Cost?

Project cost is the sum of Capital Expenditure and Margin Money for working capital.

What is Capital Expenditure?

Capital Expenditure will generally include investment in Land, Buildings, Plants, and Machinery only.

Whether cost of land can be included in the project cost?

Yes, the cost of the land may be included in the Project cost at guideline value or market value, prevailing as on the date of filing of the loan application, whichever is lower.

Whether cost of building can be included in the project cost?

Yes, the Cost of construction of buildings such as Offices, Work-Shed / Workshop, Laboratories, etc., may be included in the project cost subject to the condition that the cost of the building shall not exceed 25% of the total project cost.

Whether cost of leased/rental building can be included in the project cost?

No, the cost of leased/ rental building shall not be included in the Project cost.

How much maximum subsidy is available under this scheme?

25% of the eligible components of the project cost subject to the maximum amount of ₹75 Lakhs.

In partnership projects, is it mandatory for all the partners to attend the EDP training?

No, EDP training will be provided to only one of the partners who should be authorized by other partners in such cases.

In partnership projects, what is the owner contribution if one of the partner(s) belongs to General category?

The owner's contribution depends on the majority of partners involved in the project. For instance, in a unit of two partners involved, one belongs to the General category and the other one from Special Category, and then the contribution will be applicable to the General category. For instance, if a unit has three partners one belongs to the General category and the other two from Special Category, then the contribution will be as applicable for the Special category.

Before completion of EDP training can an individual claim subsidy?

Not possible. He / She should complete EDP training, and deposit his/her own proportionate contribution of the project cost in his account. Bank has to release the Term Loan subsequent claim(s) have to be sent to GM, DIC/RJD, Chennai along with the disbursement advice.

Under which circumstance collateral security is needed?

Collateral security will be decided as per Bank / Tamil Nadu Industrial Investment Corporation Limited (TlIC) guidelines. Subject to the applicability, loans may also be covered under the Credit Guarantee Fund Trust Scheme for Micro and Small Enterprises (CGT-MSE) of the Government of India.

What is the rate of interest for the Enterprises financed by TIIC/Banks?

Enterprises financed by TIIC/Banks will be charged at the rate of interest applicable to Micro & Small enterprises as per banking norms.

Whether 1 month EDP Training is compulsory?

Yes, it is mandatory.

If an entrepreneur completed equivalent EDP training sponsored by EDI, MSME-DI, Banks before applying under NEEDS, then he/she can avail exemption from regular 1 month mandatory EDP training?

Yes, he/she can avail of the exemption from regular 1 month mandatory EDP training.

Which are the financial agencies?

All Commercial banks including Regional Rural Banks (RRB), Small Industries Development Bank of India (SIDBI), Tamil Nadu Industrial Investment Corporation Limited (TIIC Ltd) and Tamil Nadu Industrial Co-operative Bank (TAICO)

Can project be financed jointly from two different finance sources?

No, it is not possible.

Whether existing unit can avail subsidy under NEEDS?

No, only a new unit being promoted by a new First Generation Entrepreneur is eligible for assistance.

Whether an entrepreneur can submit more than one project?

No, only one project could be submitted.

Whether second hand machinery would be considered eligible for assistance?

No, only new machinery will be considered eligible. However, second-hand machinery, directly imported by the entrepreneur would also be considered eligible for assistance.

References

Guideline
https://msmeonline.tn.gov.in/needs/needs_go.php?id=G.O%20&%20Guidelines#
Official Website
https://msmeonline.tn.gov.in/needs/needs_desc.php

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Frequently asked questions

What is the purpose of New Entrepreneur-cum-enterprise Development Scheme?
New Entrepreneur-cum-enterprise Development Scheme is a government welfare initiative designed to support Individual, Individual through benefits related to Business & Entrepreneurship, financial assistance, subsidies, social welfare, healthcare, education, or livelihood support.
Who can apply for New Entrepreneur-cum-enterprise Development Scheme?
Eligibility for New Entrepreneur-cum-enterprise Development Scheme may depend on factors such as income category, age, gender, occupation, state of residence, social category, and government-defined beneficiary criteria.
What benefits are offered under New Entrepreneur-cum-enterprise Development Scheme?
Benefits under New Entrepreneur-cum-enterprise Development Scheme may include financial assistance, subsidies, scholarships, insurance support, healthcare benefits, pension support, training assistance, or welfare services depending on the scheme guidelines.
Which department manages New Entrepreneur-cum-enterprise Development Scheme?
New Entrepreneur-cum-enterprise Development Scheme is managed by Micro Small and Medium Enterprises Department and may be implemented through district offices, online portals, CSC centres, banks, or authorised government agencies.
Can users apply online for New Entrepreneur-cum-enterprise Development Scheme?
Yes, eligible applicants may be able to apply online for New Entrepreneur-cum-enterprise Development Scheme through official government portals, authorised service centres, or digital application systems depending on the implementation process.
Is Aadhaar mandatory for New Entrepreneur-cum-enterprise Development Scheme?
Many government schemes may require Aadhaar verification, identity proof, or linked bank account details for beneficiary validation and direct benefit transfer processing.
Where can users apply for New Entrepreneur-cum-enterprise Development Scheme?
Applications for New Entrepreneur-cum-enterprise Development Scheme may be submitted through government departments, official scheme portals, CSC centres, district offices, welfare departments, or authorised service centres.
What documents may be required for New Entrepreneur-cum-enterprise Development Scheme?
Applicants may need Aadhaar card, income certificate, residence proof, bank account details, caste certificate, photographs, educational records, or occupation-related documents depending on scheme eligibility requirements.
Is income certificate required for New Entrepreneur-cum-enterprise Development Scheme?
Income certificate requirements may vary depending on beneficiary category, subsidy eligibility, and financial assistance criteria defined under New Entrepreneur-cum-enterprise Development Scheme.
Is New Entrepreneur-cum-enterprise Development Scheme available in all states?
No, New Entrepreneur-cum-enterprise Development Scheme is primarily available for eligible residents of Tamil Nadu and may be implemented through state government departments and local administrative offices.
Can residents outside Tamil Nadu apply for New Entrepreneur-cum-enterprise Development Scheme?
Eligibility for New Entrepreneur-cum-enterprise Development Scheme is generally limited to residents of Tamil Nadu unless otherwise specified in the official scheme guidelines.
Does New Entrepreneur-cum-enterprise Development Scheme provide business loan or startup assistance?
New Entrepreneur-cum-enterprise Development Scheme may support entrepreneurs, startups, self-employed individuals, MSMEs, or small businesses through financial assistance, subsidies, credit support, or training initiatives.
Is collateral required under New Entrepreneur-cum-enterprise Development Scheme?
Collateral requirements may vary depending on the loan amount, implementing agency, financial institution, and government subsidy structure.
Can CSC centres help users apply for New Entrepreneur-cum-enterprise Development Scheme?
Many government schemes may be accessible through nearby CSC centres, authorised digital service centres, or welfare facilitation offices.
How can users check the latest updates for New Entrepreneur-cum-enterprise Development Scheme?
Users should verify official notifications, department announcements, application deadlines, and eligibility updates through authorised government portals or implementing agencies.
Are there deadlines for applying to New Entrepreneur-cum-enterprise Development Scheme?
Some schemes may operate through fixed application windows, annual registration cycles, or department-specific deadlines depending on scheme implementation policies.
Can beneficiaries track application status for New Entrepreneur-cum-enterprise Development Scheme?
Certain schemes may provide online application tracking, beneficiary verification systems, or status-check facilities through official portals.
Where can users get help for New Entrepreneur-cum-enterprise Development Scheme in Tamil Nadu?
Users in Tamil Nadu may seek assistance through CSC centres, district welfare offices, government departments, agriculture offices, social welfare departments, or authorised facilitation centres.
Which nearby public services may help with New Entrepreneur-cum-enterprise Development Scheme applications?
Depending on the scheme, users may require support from Aadhaar centres, CSC centres, banks, hospitals, post offices, or government welfare offices for document verification and application assistance.