Micro Small & Medium Enterprises (MSMEs) plays an important and strategic role in the economic growth and equitable development of a country. Worldwide, the Micro Small & Medium Enterprises (MSMEs) have been accepted as prime drivers for employment generation and growth of GDP, besides contributing to the balanced regional development. MSMEs are in a unique position to become global players attracting partners with technology and funds. These enterprises impart the resilience to withstand economic upheavals and maintain a reasonable growth rate since being indigenous is the key to sustainability and self sufficiency.

New Entrepreneur-Cum-Enterprise Development Scheme (NEEDS)

“New Entrepreneur–cum-Enterprise Development Scheme (NEEDS)” has been introduced by the Government to assist educated youth to become first generation entrepreneurs during 2012-13. This scheme envisages providing entrepreneurship development training to educated first generation entrepreneurs, assistance for entrepreneurial activity, preparation of business plans and helping them to tie up with financial institutions to obtain loan to set up new business ventures, besides linking them with major industrial clients for marketing support and mentoring.

The beneficiaries should be in the age group of 21 years to 45 years and should possess education qualification of any Degree/Diploma / ITI / Vocational training from a Recognised Institution.

About 1,000 beneficiaries will be selected every year for one month EDP training conducted by Entrepreneurship Development & Innovation Institute-Tamil Nadu (EDII-TN), Chennai with a priority to assist 50% women to avail term loans from Banks / Tamil Nadu Industrial Investment Corporation Limited (TIIC). Subject to availability, they will also be provided with reservation up to 25% for allotment of plots / sheds inthe Industrial Estates of Tamil Nadu Small Industries Development Corporation Limited.(SIDCO)

As per reservation policy, priority will be given to Scheduled Caste, Scheduled Tribe and Differently abled beneficiaries.

To set up manufacturing and service projects, a front end capital subsidy at the rate of 25% of the project cost (not exceeding Rs.25 lakh), is being provided along with 3% interest subvention on term loan for the entire repayment period by the Government. The minimum project cost should be above Rs.10 lakh and the maximum project cost will be upto Rs.5 crore. For projects costing more than

Rs.1 crore, subsidy component will be restricted to Rs.25 lakh.

The Promoter has to bring 10% of the project cost as his contribution if he belongs to general category and 5% if he belongs to special category.

Being the implementing agency, the Industries Commissioner and Director of Industries and Commerce periodically reviews and monitors the progress of the scheme at the State level.

Government have released detailed guidelines in G.O.(Ms) No.49, MSME (D2) Department, dated 29.10.2012 for smooth implementation of the Scheme. The applicants should apply through online in the website

Prime Minister’s Employment Generation Programme (PMEGP)

Prime Minister’s Employment Generation Programme (PMEGP), a Government of India’s Scheme, is being implemented with effect from 2008-09. The maximum cost of the project admissible under manufacturing sector is Rs.25 lakh and under service sector is Rs.10 lakh.

The beneficiaries belonging to general category have to contribute 10% of the project cost as their fund while those belonging to Special Category (SC / ST / OBC / Minorities / Women, Ex-servicemen, Differently abled persons, North-Eastern Regions, Hill and Border areas, etc.) have to contribute 5% of the project cost as their contribution. The balance amount of total project cost will be provided by banks as loan. Applicants, who intend to benefit under this scheme, can file applications online at – Agency DIC
Government of India provides subsidy to the beneficiaries at following rates:

Categories of beneficiaries
under PMEGP
Rate of Subsidy Urban Rate of Subsidy Rural
General Category 15% of the Project Cost 25% of the Project Cost
Special Category 25% of the Project Cost 35% of the Project Cost

Unemployed Youth Employment Generation Programme (UYEGP)

With a view to create employment opportunities to the marginalized sections of the society, the State Government is implementing the Unemployed Youth Employment Generation Programme (UYEGP). Under the scheme, loan can be availed to start manufacturing / service / business enterprises with project cost upto the maximum of Rs.10 lakh/ Rs.3 lakh and Rs.1 lakh respectively. Subsidy assistance @ 25% of the project cost subject to a maximum of Rs.1,25,000/- is provided under this scheme. An online web portal has been developed to file applications online. The applicants who intend to apply under this scheme can file their applications online at

  • Minimum age limit – 18 years
  • Upper age limit – 35 years for General Category and 45 years for Special Category comprising SC / ST / BC / MBC / Minority / Women / Ex- Servicemen / Differently abled / Transgender.
  • Pass in VIII Standard

Single Window Clearance Committee for MSMEs

Tamil Nadu Government supports the entrepreneurs who come forward to set up an enterprise. The entrepreneurs can get various licenses/approvals from various departments under the existing Single Window Clearance Committee.

The Government of Tamil Nadu takes cognizance of the need for continuously improving the ease of doing business in the State. In order to demonstrate the State’s interest in creating an investor friendly climate, conducive to the domestic and global business community, one of the key technology interventions taken by the Government is implementation of the online Single Window Portal to deliver requisite services to the investors in a time-bound and transparent manner through online mechanism from 11 Departments such as Directorate of Town and Country Planning (DTCP), Tamil Nadu Pollution Control Board (TNPCB), Fire, Directorate of Industrial Safety and Health (DISH), etc during the pre-establishment stage, pre-operation stage, and renewal stage and also it has been facilitated in such a way to utilize the services of the above 11 departments.
The Single Window Portal for MSME ( was launched on 4.5.2018 and is in operation. Entrepreneurs are requested to use this portal for getting NOC/Industrial Licenses.

Business Facilitation Act/Rules 2018

An Act, namely Tamil Nadu Business Facilitation Act 2018 was enacted in the Assembly recently to ensure single point receipt of applications for securing clearances that are required to establish or expand an enterprise and for clearances required during normal course of business including renewals in a time-bound manner. The Act also provides for effective grievance redressal mechanism and finein case of failure of Competent Authorities to act within a time limit and for matters connected therewith or incidental thereto. [
The Act covers 54 clearances which include pre-establishment, pre-operation, renewals, incentives etc., District Industries Centre and Guidance Bureau are designated as Nodal Agency for MSMEs and large industries respectively for operating the single window mechanism.
The Act provides for a 3 tier institutional structure viz.
1. District MSME Single Window Committee,
2. State MSME SingleWindow Committee and
3. MSME Investment Promotion and Monitoring Board to monitor and review the progress of single window mechanism

1.4 Definition of MSMEs

The classification of Micro, Small and Medium Enterprises is defined under the MSMED Act, 2006. Based on the investment in plant and equipment (excluding land and building), the enterprises are classified as Manufacturing and Service enterprises as given below.

Category Manufacturing
Investment Level
Investment Level
Micro Upto Rs.25 lakh Upto Rs.10 lakh
Small Above Rs.25 lakh
to upto Rs.5 crore
Above Rs.10 lakh
to upto Rs.2 crore
Medium Above Rs.5 crore
to upto Rs.10 crore
Above Rs.2 crore
to upto Rs.5 crore