Unemployed Youth Employment Generation Programme (UYEGP)

What is the Unemployed Youth Employment Generation Programme?

Unemployed Youth Employment Generation Programme (UYEGP) is a self-employment credit subsidy scheme run by the Micro, Small and Medium Enterprises Department, Government of Tamil Nadu, and implemented through the Commissionerate of Industries and Commerce and the District Industries Centres. UYEGP was created to reduce unemployment among socially and economically weaker sections by putting a bank-financed business within reach of a young person who has no capital of their own.

According to the MSME Department's Policy Note for 2025-26, UYEGP is devised specifically for trading activities. That single design choice is what separates it from Tamil Nadu's other entrepreneurship schemes: the New Entrepreneur cum Enterprise Development Scheme (NEEDS) and the Prime Minister's Employment Generation Programme handle manufacturing and services, while UYEGP funds shops, distribution, retail and similar trade.

How the money works. UYEGP is a back-end subsidy, not a cash handout. The bank sanctions a term loan and working capital against an approved project report. The government's 25 per cent share is then credited to the loan account, reducing the amount the borrower repays.

• Maximum project cost: Rs 15 lakh
• Subsidy: 25 per cent of project cost, capped at Rs 3.75 lakh
• Promoter's contribution: 10 per cent for the general category, 5 per cent for the special category
• Collateral: not required up to Rs 10 lakh, per Reserve Bank of India guidelines, and the loan can be covered under CGTMSE

Land and building cost is not counted in the project cost. What is counted is capital expenditure and one cycle of working capital, plus the promoter's own contribution.

Who is eligible for UYEGP in Tamil Nadu?

You can apply if:

• You are aged 18 to 45 in the general category, or 18 to 55 in the special category. Special category covers SC, ST, women, ex-servicemen, differently abled persons and transgender persons.
• You have passed at least Class 8.
• You are a resident of the district. The UYEGP FAQ document sets a residence requirement of not less than three years in the place.
• Your family income, counting yourself and your spouse, is within the ceiling stated in the scheme FAQ, which is Rs 1,50,000 a year.
• You are proposing a new trading enterprise.
• You are willing to complete the compulsory Entrepreneurship Development Programme training.

You cannot apply if:

• You already run the business. Only a new unit is eligible; existing units are not eligible.
• Your proposal is a manufacturing or service unit. UYEGP funds trading activities only, and other schemes exist for those sectors.
• You have concealed a loan already availed under another government scheme. The portal's Dos and Don'ts sheet warns against filing while hiding such information.
• You cannot bring the promoter's contribution of 10 per cent, or 5 per cent for the special category.
• You are outside the age band for your category.

How to apply for UYEGP online

1. Open the official portal at msmeonline.tn.gov.in/uyegp and use the Check your Eligibility tool to confirm your age, education and category before you start.
2. Read the scheme guidelines, the process flow chart, the model filled-in application and the model project profile published on the same portal.
3. Prepare a project report for your trading activity with realistic costs, and collect quotations carrying GST numbers for every item you intend to buy.
4. Register on the portal and file the online application. Note down the reference number generated after you enter the entrepreneur details, before moving to the next stage.
5. Upload the scanned documents. The portal asks for the transfer certificate, ration card, community certificate and a passport-size photograph in JPEG format under 50 KB.
6. Save the filed application as a PDF for your own record, then submit the printed application with two copies of each enclosure to the District Industries Centre of your district.
7. Attend the EDP training conducted by EDII-TN, Chennai. Training is compulsory and is now largely delivered online over 15 days.
8. Attend the bank interview after the District Industries Centre forwards your case. Execute the notarised affidavit on Rs 20 non-judicial stamp paper and hand it to the bank with a copy of your rental or lease agreement at the time of sanction.

How to apply for UYEGP offline

1. Visit an e-Sevai centre in a taluk office, municipal office or a Primary Agricultural Cooperative Credit Society. The portal's Dos and Don'ts sheet recommends this route for applicants who cannot file the form themselves.
2. Carry the transfer certificate, ration card, community certificate, project report and quotations, all in two copies.
3. Collect the acknowledgement carrying your reference number, then follow up in person at the District Industries Centre.

What documents does UYEGP require?

How to check your UYEGP application status

1. Return to msmeonline.tn.gov.in/uyegp and open the application status link.
2. Enter the reference number issued when you filed the entrepreneur details.
3. Follow up with the General Manager, District Industries Centre if the status has not moved. The portal's dashboard reports an average approval time of 108 days in the current financial year.

Why UYEGP applications get rejected

• Wrong activity. A manufacturing or service proposal filed under a trading-only scheme fails at the first scrutiny.
• Existing unit. Applications for a business already in operation are refused.
• Quotations without GST numbers, or quotations that do not match the project report line by line.
• Missing promoter's contribution. The bank will not disburse until the 10 per cent, or 5 per cent for special category, is deposited.
• Age or education outside limits, most often an applicant above 45 in the general category.
• EDP training not completed. The subsidy claim cannot be settled without it.

How UYEGP compares with Tamil Nadu's other MSME schemes

Choosing the right scheme before applying saves months, because the District Industries Centre will not convert a rejected file from one scheme into another.

• UYEGP; trading activities only, project cost up to Rs 15 lakh, subsidy 25 per cent capped at Rs 3.75 lakh, promoter's contribution 10 per cent general and 5 per cent special category, age 18 to 45 general and 18 to 55 special, minimum Class 8. In 2024-25, Rs 43.15 crore of subsidy went to 3,126 entrepreneurs.
• New Entrepreneur cum Enterprise Development Scheme (NEEDS) — for manufacturing and service enterprises, with a subsidy of up to Rs 75 lakh and 3 per cent interest subvention. 50 per cent of assistance is reserved for women and 19 per cent for SC and ST entrepreneurs. In 2024-25, 932 entrepreneurs benefited with a subsidy of Rs 87.54 crore. NEEDS beneficiaries also receive 15 days of online entrepreneurship training from EDII-TN, hand-holding to obtain bank loans, and assistance in getting plots or sheds allotted in TANSIDCO industrial estates.
• Annal Ambedkar Business Champions Scheme (AABCS), for SC and ST entrepreneurs; 1,289 beneficiaries were trained online in 2024-25.

Across all Tamil Nadu MSME entrepreneurship training in 2024-25, 30,318 beneficiaries were trained offline at a cost of Rs 10.21 crore, and 6,630 were trained online, of whom 4,323 were UYEGP applicants.

Grievance and help

• First stop: the General Manager, District Industries Centre of your district, in person or by phone. The portal encourages applicants to contact the DIC directly to clear doubts.
• Feedback and complaint form: available on msmeonline.tn.gov.in.
• e-Sevai helpline: 1800 425 6000 for problems filing through a service centre.

The portal warns applicants in writing not to be deceived by intermediaries. No agent can secure a UYEGP subsidy for a fee; the sanction rests with the District Industries Centre and the financing bank.