Scheduled Caste and Scheduled Tribe entrepreneurs in Chennai can claim 35% of a project’s eligible cost as a capital subsidy, up to ₹1.5 crore, under the Annal Ambedkar Business Champions Scheme (AABCS). The state also pays 6 percentage points of the interest on the machinery loan for up to 10 years, according to the official scheme page.
AABCS is meant for bigger ventures. Smaller self-employment projects go through TAHDCO, the state’s Adi Dravidar housing and development corporation, which has its head office in Teynampet. This guide sets out which scheme fits which size of business, what the money covers and how to apply from Chennai.
Who can apply for AABCS
The district scheme notice and the state page set out the basic conditions:
- The enterprise must be 100% owned by SC or ST persons. Both new units and expansions of existing ones qualify.
- The applicant can be at most 55 years old. There is no minimum educational qualification.
- Trading projects are allowed only if they are larger than the ceiling of the state’s smaller youth self-employment programme.
- Applications are taken online only, at msmeonline.tn.gov.in/aabcs.
The state page records an allocation of ₹100 crore in the 2023-24 budget estimates when the scheme began. In May 2024, Deccan Chronicle reported that 1,303 SC/ST entrepreneurs, 288 of them women, had received ₹159.67 crore in subsidy. Of 12,472 online applications at that point, 2,136 proposals had been cleared for bank loans.
What the subsidy pays for
The 35% is calculated on capital items: land, plant, machinery, testing equipment and computers. Land can count for no more than 20% of the project cost. Vehicles count only when the business cannot run without them, such as a taxi service, a lorry operation or bore-well rigs.
Two features matter for cash flow. Projects built without any bank loan can still get the subsidy, but only after the unit is complete. Where there is a loan, the 6% interest subvention on machinery loans is paid upfront to the bank, and working-capital loans get interest support for up to two years. Beneficiaries may also claim capital subsidies from schemes run by agencies outside the state government, such as Union schemes.
Borrowing through TIIC
Many applicants take their loan from the state-owned Tamilnadu Industrial Investment Corporation. Its AABCS loan page adds its own rules, which are stricter than the scheme itself:
- Term loans run from ₹10 lakh to ₹300 lakh, covering 65% of the project cost. The 35% subsidy counts as the promoter’s share.
- TIIC funds only manufacturing and service activities, not trading.
- Applicants need a credit score of 650 or more. People with no credit history have their bank statements checked instead.
- Collateral of at least half the loan is needed, and full collateral for easily moved assets such as tailoring machines, computers or earth-movers.
- Repayment is spread over up to seven years after a moratorium of up to two years.
Proposals go to a district committee headed by the Collector. It includes the District Adi Dravidar Welfare Officer and at least two representatives of SC/ST industry associations. Selected applicants also attend entrepreneurship training at the state’s Entrepreneurship Development and Innovation Institute.
Smaller projects: TAHDCO’s CM-ARISE
For a tailoring unit, a small shop or a single vehicle, TAHDCO is the usual route. Its website lists these schemes:
| Scheme | Support | Use in 2023-24 |
|---|---|---|
| CM-ARISE (SC/ST self-employment) | 35% subsidy up to ₹3.5 lakh, plus 6% interest subsidy for regular repayment | ₹39.75 crore to 2,058 people |
| PM-AJAY (SC self-employment) | 50% subsidy up to ₹50,000 | ₹51.24 crore to 9,459 people |
| Women’s SHG grants | ₹50,000 per member, up to ₹6 lakh per group | ₹5.72 crore to 229 groups |
The 2023-24 figures are from the department’s 2024-25 policy note. CM-ARISE replaced four older TAHDCO programmes, including the youth self-employment schemes. Applications are made on TAHDCO’s scheme portal, linked from its home page.
How to go about it in Chennai
- Get your SC or ST community certificate and Aadhaar in order. Every application needs them.
- Prepare a project report with quotations for the machinery and equipment. The subsidy is worked out from these figures.
- Choose the route: AABCS for larger units, CM-ARISE for projects up to a few lakh rupees.
- Apply online, then follow up with the district office. TAHDCO’s head office is at No. 31, Cenotaph Road, 2nd Lane, Teynampet, Chennai 600018 (044-24310197 or 044-24310196).
The schemes were started by the previous government. Their official pages and portals were still listed when we checked, but confirm current terms before you commit money. For larger loans, speak to a chartered accountant or banker about the project report.
Quick answers
How much subsidy does AABCS give?
35% of the eligible project cost, up to ₹1.5 crore, plus a 6% interest subvention on machinery loans for up to 10 years.
Is there an education requirement?
No. The scheme sets no minimum qualification. The age limit is 55.
Can a trading business apply?
Under AABCS, only if it is larger than the youth self-employment programme’s limit. TIIC itself does not fund trading.
Where is TAHDCO’s office?
No. 31, Cenotaph Road, 2nd Lane, Teynampet, Chennai 600018.
Information checked against official sources on 18 October 2026. Fees, dates and rules can change; confirm on the linked official pages before acting.
Sources
- Annal Ambedkar Business Champions Scheme (Industries Commissionerate, Government of Tamil Nadu)
- Annal Ambedkar Business Champions Scheme (Chengalpattu District Administration)
- Entrepreneur Development Scheme: AABCS loans (Tamilnadu Industrial Investment Corporation)
- TAHDCO schemes and contact (TAHDCO)
- Adi Dravidar and Tribal Welfare Department Policy Note 2024-25 (Government of Tamil Nadu)
- Dalit entrepreneurs bloom in Tamil Nadu (Deccan Chronicle, May 2024)
