The New Entrepreneur-Cum-Enterprise Development Scheme (NEEDS), launched by the Department of MSME, Government of Tamil Nadu, is a flagship initiative to support first-generation educated youth in setting up manufacturing or service enterprises. With capital subsidies, interest subvention, and entrepreneurship training, the scheme bridges the gap between business ideas and successful enterprise creation.
Objectives of the NEEDS Scheme
• Support youth in becoming first-generation entrepreneurs
• Provide structured entrepreneurship training (EDP)
• Assist in preparing bankable business plans
• Facilitate tie-ups with TIIC/Banks for term loans
• Provide 25% capital subsidy (max ₹75 lakhs) and 3% interest subvention
• Prioritize women, SC/ST, and differently-abled applicants with additional incentives
Key Highlights
| Feature | Details |
|---|---|
| Scheme Name | New Entrepreneur-Cum-Enterprise Development Scheme (NEEDS) |
| State | Tamil Nadu |
| Nodal Agency | Department of MSME |
| Target Group | First-generation entrepreneurs (21–35 years) |
| Maximum Project Cost | ₹5 Crore |
| Minimum Project Cost | ₹10 Lakh |
| Capital Subsidy | 25% (max ₹75 lakhs) |
| Interest Subvention | 3% |
| Allotment Priority | SIDCO plots/sheds (up to 25%) |
| Application Mode | Online at msmeonline.tn.gov.in |
| Training Required | 1-month EDP Training (mandatory) |
Benefits of the Scheme
• Capital Subsidy: 25% of the project cost (max ₹75 lakh)
• Interest Subvention: 3% throughout the loan repayment period
• Priority SIDCO Allotment: Reservation of plots/sheds for selected enterprises
• Additional 10% subsidy for SC/ST/differently-abled applicants over the standard subsidy
• Business Mentoring: From project planning to execution
Eligibility Criteria
• Must be a resident of Tamil Nadu for at least 3 years
• Must be a first-generation entrepreneur
• Age 21–35 years (General) & up to 45 years for Women/SC/ST/BC/MBC/Ex-servicemen/Transgender/Differently abled
• Minimum education: 12th pass/ITI/Diploma/Vocational Training
• No income ceiling
• Must not be a beneficiary of other government loan/subsidy schemes like PMEGP, UYEGP, TAHDCO
• Must not be a loan defaulter
• Must complete EDP training
• Promoter contribution: 10% (General), 5% (Special category)
• Land cost may be considered as part of the promoter contribution
• Only new projects financed under NEEDS are eligible
Ineligible Activities
Not eligible under NEEDS:
• Agriculture, poultry, piggery, sericulture, fisheries
• Sugar, brewery, distillery, and molasses-based units
• Polythene bag manufacturing (<40 microns)
• Mining, real estate, cement, calcium carbide, slaughterhouses
• Repacking medicines without value addition
• Tobacco, alcohol, firecrackers, hazardous/“red category” industries
How to Apply – Online Process
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Visit msmeonline.tn.gov.in
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Click on “Apply Online” > “New Application”
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Register using Name, DOB, Aadhaar, Mobile, and Email
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Log in and complete the application form
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Upload required documents
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Submit the application
Post-Application Process
• Applications are screened by the Task Force Committee
• Selection is based on qualifications, skills, business viability, and interview
• Recommended applications forwarded to TIIC/Banks
• EDP training is arranged for selected applicants
• After training and certificate issuance, SIDCO allotment (if applicable)
• Loan disbursal begins after the promoter contribution is deposited
Necessary Documents for Application
• Aadhaar / Election ID (Proof of identity)
• PAN Card
• Passport size photo
• Educational qualification proof
• Caste certificate (if applicable)
• Age proof
• Residence certificate
• Disability/Ex-servicemen/Transgender certificate (if applicable)
• Bank account details
• Project report
• Supporting documents (if already trained by EDI, MSME-DI, etc.)
FAQs
Q: What is the maximum subsidy available under the NEEDS scheme?
A: A maximum of ₹75 lakhs is provided as a 25% capital subsidy.
Q: Can someone residing outside Tamil Nadu apply for NEEDS?
A: No, the applicant must have been a resident of Tamil Nadu for at least 3 years.
Q: Are partnership firms eligible?
A: Yes, provided all partners meet eligibility. However, only one partner needs to attend the mandatory EDP training.
Q: Can leased or rental buildings be included in the project cost?
A: No, rented or leased buildings are excluded from subsidy calculation.
Q: Can someone who has already received PMEGP assistance apply for NEEDS?
A: No, previous beneficiaries of other state/central government schemes are not eligible.
Q: Is EDP training compulsory for all applicants?
A: Yes, 1-month EDP training is mandatory, unless previously completed through an approved institute.
Q: Is land cost considered as promoter contribution?
A: Yes, land value can be considered based on guideline/market value, whichever is lower.
Q: Can the same applicant submit multiple projects under NEEDS?
A: No, only one project per applicant is permitted.
Q: Are second-hand machines eligible under NEEDS?
A: No, second-hand machinery is not eligible for subsidy support.
Q: What is the interest rate on loans under NEEDS?
A: Loans are charged at regular MSME interest rates, but the government provides a 3% interest subvention.
Sources & References
• Official Website: https://msmeonline.tn.gov.in
• NEEDS Scheme Guidelines
• Department of Industries and Commerce, Government of Tamil Nadu
