The New Entrepreneur-cum-Enterprise Development Scheme (NEEDS) of the State government aimed at fostering first-time entrepreneurs has met with a tepid response in Tiruchi district with just 16 projects taking off over the past two years.
Although the scheme is seen as boon for first-time entrepreneurs, the number of applications received for the scheme over the past two years and the subsidy utilisation has been much less than the targets.
The scheme seeks to provide entrepreneurship training to educated youth, assist them in project preparation, and get financial assistance through Tamil Nadu Industrial Investment Corporation (TIIC) or banks with 25 per cent capital subsidy and three per cent interest subvention. Unlike many other entrepreneurship promotion schemes, the project cost under NEEDS covers capital expenditure such as land, building and plant and machinery and margin money for working capital.
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There is good scope for promoting food processing industries, rice mills, solar energy-based industries, readymade garment manufacturing, BPOs and other manufacturing and service sector projects such as clinical labs, officials of District Industries Centre say.
However, since 2012-13 only 16 projects have taken off in the district and of these only 13 have become operational and the rest are in different stages of commissioning. Although the district has been set an annual subsidy target of Rs.370 lakh for 37 projects, just 14 applications were received in 2012-13, and 32 in 2013-14. Although the scheme encourages prospective entrepreneurs to think big by offering assistance for projects up to Rs.1 crore, the cost of a majority of projects sanctioned under the scheme so far is very low. Many of them have been small projects such as digital wood carving, paper cups, fly ash and hollow block manufacturing.
Sources cite the lack of awareness or entrepreneurship aptitude among youth and reluctance of bankers to lend large amounts to first-time entrepreneurs as main reasons for the poor response and low subsidy utilisation. Many prospective entrepreneurs also find it daunting to provide the collateral insisted by banks.
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Yet, those who have availed themselves of the scheme feel it has given them a big break. “The scheme has helped us realise a long cherished dream. We got good support from the District Industries Centre and also our bank. The scheme offers an opportunity for youngsters, especially graduates in life sciences, to take up their own ventures,” said P.Arul Kanna, a former teacher who has teamed up with her colleague R.Senthil, to set up a commercial enzyme manufacturing unit at Siruganur. The project, sanctioned at an estimate of about Rs.75 lakh, is by far the biggest project sanctioned under NEEDS in the district.
Just six applications have been received so far this year and applications are to be received till June 15. “We are planning to create awareness by conducting seminars and workshops. We also regularly interact with bankers to persuade them to finance projects under the scheme,” said A.Raja Rajan, General Manager, District Industries Centre.