UYEGP Scheme (Unemployed Youth Employment Generation Programme) – Complete Scheme Guide 2025

Tamil Nadu is home to millions of young people with great ideas, skills, and dreams. But many talented youth struggle to start their own business because they don’t have enough money, support, or guidance. To solve this challenge, the Government of Tamil Nadu introduced a powerful scheme called the Unemployed Youth Employment Generation Programme (UYEGP).

The aim of UYEGP is simple:
Help unemployed youth become successful entrepreneurs through bank loans + government subsidies.

If you are a young entrepreneur, MSME founder, or someone planning to start a manufacturing, service, or trading business in Tamil Nadu, this guide will explain everything you must know in an easy, practical way.

What Is UYEGP? (Simple Explanation)

The Unemployed Youth Employment Generation Programme (UYEGP) is an entrepreneurship-support scheme launched by the Tamil Nadu Micro, Small & Medium Enterprises (MSME) Department.

Its core purpose is to support:

• Unemployed youth
• First-time entrepreneurs
• People from economically weaker backgrounds
• Youth interested in manufacturing, service, or trading businesses

Loan & Subsidy Structure

Under UYEGP, eligible applicants can get bank loans of:

• ₹15 lakh → Manufacturing
• ₹5 lakh → Service sector
• ₹5 lakh → Trading/Business

The Tamil Nadu Government provides a 25% subsidy on the project cost (up to ₹2.50 lakh).

Objective of the Scheme

• Encourage youth to start micro and small enterprises
• Reduce unemployment
• Boost entrepreneurship in rural & urban Tamil Nadu
• Support economic development of weaker sections

Who Is This Scheme For? (MSMEs & Startup Focus)

UYEGP is ideal for:

• Youth planning to start a brand-new small business
• First-time business owners
• Early-stage MSMEs
• Local manufacturers
• Service providers
• Shop owners and traders
• Entrepreneurs needing low-investment funding
• Youth from SC/ST/OBC/Minority/Ex-serviceman/transgender/differently–abled communities

Whether you want to start a salon, a printing unit, a small factory, a food-processing unit, a trading shop, or any micro business—UYEGP can help you get the financial push you need.

Top Benefits & Features of UYEGP

1. 25% Government Subsidy

A huge advantage—you get 25% subsidy on your project cost (maximum ₹2.50 lakh).

2. Very Low Own Contribution

You don’t need to pay much from your pocket:

• General Category → 10%
• Special Category → 5%

3. No Collateral Required

The loan is collateral-free and covered under the CGTMSE Guarantee Scheme, meaning no property or security is required.

4. Entrepreneurship Training (EDP)

You get free training on:

• Business planning
• Finance management
• Marketing basics
• Business operations

5. Easy Online Application

The entire process—application, document upload, status tracking—is done online.

6. Suitable for All Types of Small Businesses

You can apply for:

• Manufacturing units
• Service-based businesses
• Micro shops
• Home-based business units
• Trading activities

7. Special Category Benefits

Applicants from SC/ST/BC/MBC/Minority/Ex-servicemen/Transgender/Differently-Abled groups get:

• Higher age limit
• Lower own contribution
• Relaxed norms

Where Is the UYEGP Scheme Applicable?

The UYEGP scheme is exclusive to Tamil Nadu. It is implemented by the Tamil Nadu MSME Department through District Industries Centres (DICs) in every district.

Budget & Reach of the Scheme

Every year, the Tamil Nadu Government allocates a dedicated budget to support thousands of new entrepreneurs through UYEGP. Subsidies are released district-wise and disbursed through DICs.

Impact Over the Years

• Thousands of youth have become self-employed
• New manufacturing and service units have been created
• Micro-trading businesses have grown across rural and urban TN
• Local employment opportunities have increased

UYEGP is considered one of Tamil Nadu’s most successful youth entrepreneurship schemes.

Eligibility Criteria for UYEGP (2025)

You can apply if you meet the following:

✔ 1. Tamil Nadu Resident

You must have TN address proof.

✔ 2. Age Limit

• General Category: 18 to 35 years
• Special Category: 18 to 45 years

✔ 3. Educational Qualification

Minimum 8th pass.

✔ 4. Annual Family Income

Must be below ₹5 lakh per year.

✔ 5. Own Contribution

• General: 10%
• Special Category: 5%

✔ 6. Mandatory EDP Training

✔ 7. Project Cost Limits

• Manufacturing: Up to ₹15 lakh
• Service: Up to ₹5 lakh
• Trading: Up to ₹5 lakh

Documents Required for UYEGP Application

Prepare the following documents:

• Aadhaar / Voter ID
• PAN Card
• Passport-size photo
• Income certificate
• Community certificate (if applicable)
• Educational certificate / TC
• Ration card / Nativity proof
• Project report
• Valid quotations for machinery
• Bank account details
• Rental/lease agreement (if applicable)
• Ex-serviceman / Disability / Transgender certificate
• Affidavit on ₹20 stamp paper

How to Apply for UYEGP Scheme? (Step-by-Step Online Process)

Follow these simple steps:

Online Application

1. Visit the official MSME Tamil Nadu UYEGP portal
2. Click Apply Online → New Application
3. Register using your:
   • Name
   • Aadhaar
   • Email
   • Mobile number
4. Fill the complete application form
5. Upload all documents
6. Submit your application

After Applying

1. DIC verifies your application
2. You receive an interview call letter
3. DIC recommends your loan to the bank
4. Attend EDP training
5. Submit EDP certificate + required documents to the bank
6. Bank sanctions and disburses the loan
7. Subsidy is kept as TDR for 3 years
8. After 3 years, subsidy is credited to your loan account

Eligible Businesses Under UYEGP

Most micro and small businesses are allowed except negative-list items (alcohol, tobacco, polluting units).

Allowed Businesses Include:

Manufacturing:

• Candles
• Paper bags
• Leather products
• Handicrafts
• Small-scale food processing

Service:

• Beauty salons
• Auto repair
• Computer centers
• Printing & Xerox shops
• Mobile service centers

Trading:

• Grocery shops
• Hardware shops
• Fancy stores
• Clothing shops
• General trade units

If the business falls under micro or small category and follows TN-DIC guidelines, UYEGP is applicable.

StartupFlora – Your Trusted Partner for Government Schemes

At StartupFlora, we help young entrepreneurs:

• Understand government schemes
• Prepare project reports
• Get MSME registration
• Apply for subsidies
• Grow their business through consultancy & digital marketing

If you need guidance for UYEGP, PMEGP, NEEDS, or any MSME scheme, StartupFlora is here to support you.

Other Similar Schemes to Explore

If you’re applying for UYEGP, you may also consider:

• PMEGP Scheme
• NEEDS Scheme (Tamil Nadu)
• PM Vishwakarma Scheme
• Stand-Up India
• Mudra Loan Scheme
• CGTMSE Guarantee Scheme

Frequently Asked Questions (FAQ)

Who is eligible for UYEGP?

A Tamil Nadu resident aged 18+, minimum 8th pass, and with annual family income under ₹5 lakh.

What is included in the project cost?

Machinery, equipment, tools, working capital, rent, and installation charges.

Is land or building cost included?

No, land/building cost is not allowed.

Is EDP training mandatory?

Yes, it is compulsory.

Do I need collateral for the loan?

No. Loans are collateral-free under CGTMSE.

Can existing businesses apply?

No. Only new units can apply under UYEGP.

Who implements UYEGP at district level?

District Industries Centres (DICs).

What businesses are covered?

Manufacturing, service, and trading units.

Which banks provide the loan?

All nationalized, scheduled, and cooperative banks.

What is the maximum project cost?

• Manufacturing: ₹15 lakh
• Service/Trading: ₹5 lakh

What is promoter contribution?

• General: 10%
• Special Category: 5%

How much will the bank finance?

Bank finances the balance after subtracting subsidy + your contribution.

What is the interest rate?

As per individual bank norms.

Repayment period?

Generally 5–7 years.

How long is subsidy locked?

Subsidy is locked for 3 years as TDR.

Can two banks finance one project?

No, only one bank must finance the project.

Can I apply if I have already availed another subsidy?

No. You must not have received benefits from other self-employment schemes.

Are partnership firms allowed?

No. Only individual applicants are eligible.

How are beneficiaries selected?

Through DIC interview + verification.

Who is included in the Task Force Committee?

Officials from DIC, district administration, and banking institutions.

Final Words

UYEGP is an excellent opportunity for Tamil Nadu youth to start a new business with minimal investment and strong government support. If you have a dream to become an entrepreneur, this scheme can be the perfect launchpad.

If you need help preparing your project report, business plan, or online application, StartupFlora is always ready to guide you.