TN doubles funding for new entrepreneurship scheme

To provide capital subsidy of 25% on investments, training and consultancy support

In a move to boost entrepreneurship in the state, the Tamil Nadu government has allocated Rs 100 crore to the New Entrepreneur Cum Enterprise Development (NEED) Scheme, which was introduced in 2012-13. The allocation in 2013-14 is almost double what it was last year.

Under this scheme, the government will provide a capital subsidy of 25 per cent on investments, besides training and consultancy support. The state government has allocated Rs 100 crore to the NEED scheme in the Budget for 2013-14, and 50 per cent of this amount has been earmarked for women beneficiaries. In 2012-13, the state government had released Rs 52 crore for the scheme.

Similarly, Rs 25 crore has been allocated for the three per cent Interest Subvention Programme to benefit MSMEs through the Tamil Nadu Industrial Investment Corporation and banks.

The objective of the NEED scheme is to train first-generation entrepreneurs in the essentials of conceiving, planning, initiating and launching a manufacturing or service enterprise successfully.

While welcoming the scheme M Rafeeque Ahmed, president of the Federation of Indian Export Organisations, said the entire process should be outsourced in order to make the scheme a success. Who would advise the entrepreneurs, and who would work with them, were important issues, he said.

If it is going to be government officials or organisations, then it may not be a 100 per cent success, because they were not used to such work. The government should outsource such work to professionals like chartered accountants and should set them a target of training and helping a certain number of entrepreneurs to gain access to assistance, he said.

On completion of the training programme, the entrepreneurs will be assisted in preparing their business plans and firming up arrangements with financial institutions to get term loans for manufacturing or service enterprises with a project cost not exceeding Rs 1 crore, and a capital subsidy of 25 per cent of the project cost (not exceeding Rs 25 lakh), with a three per cent interest subvention to be provided by the state government.

Subject to availability, the entrepreneurs will also be offered reservation of up to 25 per cent of plots and sheds in SIDCO's industrial estates in the state.

Around 1,000 entrepreneurs will be trained each year for the next five years under the NEED scheme, according to the draft guidelines governing the scheme. Educated youth with a degree, diploma, or training from ITIs or vocational training from recognised institutions, aspiring to become entrepreneurs, will be eligible for assistance under the scheme.

The first batch of training for the NEED scheme commenced on February 27 in Chennai and other batches are being conducted at Krishnagiri, Tiruchi, Tirunelveli and Coimbatore districts, covering 182 beneficiaries over one month.

However, entrepreneurs who have already availed themselves of assistance under the Prime Minister's Rozgar Yojana, Rural Employment Generation Programme, Prime Minister's Employment Generation Programme, Unemployed Youth Employment Generation Programme, Tamil Nadu Adi Dravidar Housing and Development Corporation Limited or any other scheme of the Government of India or state government will not be eligible for assistance under the NEED scheme.

Those who have availed themselves of a loan for economic activity under the Self Help Group or other group activity will also be not eligible. To be eligible, they should also not be a defaulter to any commercial bank or the Tamil Nadu Industrial Investment Corporation Entrepreneurs availing themselves of assistance under this scheme will not be eligible to avail themselves of capital subsidy under any other state government scheme.