Launched in August 2008, Prime Minister's Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme, administered by the Ministry of Micro, Small and Medium Enterprises (MSME). PMEGP aims to generate employment opportunities through the establishment of micro-enterprises in the non-farm sector for rural as well as urban areas. The scheme has been approved for continuation over the 15th Finance Commission cycle i.e., for the period of five years from 2021-22 to 2025-26. PMEGP was formed by merging the two schemes that were in operation till 31st March 2008, namely Prime Minister's Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP). An outlay of ₹13,554.42 Crore has been approved for PMEGP for five Financial Years (2021-22 to 2025-26) to set up about 4,00,000 projects with the creation of 30,00,000 employment @8 persons per unit). In addition, 1,000 Units will be upgraded in each FY.
Objectives
To generate employment opportunities in rural as well as urban areas of the country through the setting up of new self-employment ventures/projects/micro enterprises.
To bring together widely dispersed traditional artisans! rural and urban unemployed youth and give them self-employment opportunities to the extent possible, at their place.
To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth in the country, so as to help arrest migration of rural youth to urban areas.
To increase the wage-earning capacity of workers and artisans and contribute to an increase in the growth rate of rural and urban employment.
Implementing Agencies
At the National level, the scheme is being implemented by the Khadi and Village Industries Commission (KVIC), a statutory organization under the administrative control of the Ministry of MSME as the single nodal agency.
At the State level, the scheme is implemented through State offices of KVIC, State Khadi and Village Industries Boards (KVIBs), District Industries Centre's (DICs), Coir Board (for coir-related activities), and Banks. The government may also involve other suitable agencies for the implementation of the scheme.
Funds under PMEGP Scheme will be available under two major heads:
1. Margin Money Subsidy
a) Funds will be allocated under annual Budget Estimates toward disbursement of Margin Money (subsidy) for setting up new micro-enterprises/units; and
b) From the funds allocated under BE for the Margin Money subsidy, ₹ 100 Crores or as approved by the competent authority will be earmarked for each FY towards disbursement of Margin Money (subsidy) for the upgradation of existing PMEGP/REGP/MUDRA units.
2. Backward and Forward Linkages
5% of the total allocation under BE for a Financial Year against PMEGP, or as approved by the competent authority, shall be earmarked as funds under Backward and Forward Linkages and will be utilized for arranging awareness camps, State/District level monitoring meetings, Workshops, Exhibitions, Bankers meetings, TNDA, Publicity, Entrepreneurship Development Programme (EDP) training, Physical verification & Geo-tagging, Evaluation & impacts Assessment study, Setting of Entrepreneurship Facilitation Centre (EFC), Center of Excellence (CoE), Engagement of Field Experts and Data Entry Operators (DEOs), Creation and Upgradation of IT infrastructure, Awards, Call Centre facility, PMU, and other related activities and settlement of other residual liabilities by the KVIC.
Levels of support under PMEGP
1. For setting up new micro-enterprise (units)
a) Categories of beneficiaries under PMEGP (for setting up of new enterprises): General Category
Beneficiary's contribution (of project cost): 10% Rate of Subsidy (of project cost): 15% for Urban Areas, 25% for Rural Areas.
b) Categories of beneficiaries under PMEGP (for setting up of new enterprises): Special Category (including SC, ST, OBC, Minorities, Women, Ex-Servicemen, Transgenders, Differently abled, NER, Aspirational Districts, Hill and Border areas(as notified by the Government), etc.
(ii) Rate of Subsidy (of project cost): 25% for Urban Areas, 35% for Rural Areas.
Note:
The maximum cost of the project/unit admissible for Margin Money subsidy under the Manufacturing sector is ₹50,00,000.
The maximum cost of the project/unit admissible for the Margin Money subsidy under the Business/Service sector is ₹20,00,000.
The balance amount (excluding the own contribution)of the total project cost will be provided by Banks.
If the total project cost exceeds ₹50,00,000 or ₹20,00,000 for Manufacturing and Service/Business sector respectively, the balance amount may be provided by Banks without any Government subsidy.
2. 2nd Loan for Upgradation of Existing PMEGP / REGP / MUDRA Units
a) Categories of beneficiaries under PMEGP (for upgradation of existing units): All Categories
b) Beneficiary's contribution (of project cost): 10%
c) Rate of Subsidy (of project cost): 15% (20% in NER and Hill States).
Note:
1) The maximum cost of the project/unit admissible for Margin Money subsidy under the Manufacturing sector for upgradation is ₹10,00,00,000. The maximum subsidy would be ₹15,00,000 (₹20,00,000 for NER and Hill States).
2) The maximum cost of the project/unit admissible for Margin Money subsidy under the Business/Service sector for upgradation is ₹25,00,000. The maximum subsidy would be ₹3,75,000 (₹5,00,000 for NER and Hill States).
3) The balance amount (excluding the own contribution)of the total project cost will be provided by Banks.
4) If the total project cost exceeds ₹10,00,00,000 or ₹25,00,000 for Manufacturing and Service/Business sector respectively, the balance amount may be provided by banks without any Government subsidy.
There will be no income ceiling for assistance in setting up projects under PMEGP.
For setting up of project costing above Rs.10 lakh in the Manufacturing sector and above ₹ 5,00,000 in the Business /Service sector, the beneficiaries should possess at least VIII standard pass educational qualification.
Assistance under the scheme is available only for new projects sanctioned specifically under the PMEGP.
Existing Units (under PMRY, REGP, or any other scheme of the Government of India or State Government) and the units that have already availed of Government Subsidy under any other scheme of the Government of India or State Government are not eligible.
For up-gradation of existing PMEGP / REGP / MUDRA units
Margin Money(subsidy)claimed under PMEGP has to be successfully adjusted on the completion of the lock-in period of 3 years.
The first loan under PMEGP/REGP/MUDRA has to be successfully repaid in the stipulated time.
The unit is profit-making with good turnover and has the potential for further growth in turnover and profit with modernization/upgrading of the technology.
Reservation / Preference / Priority
Priority will be given to the persons affected by natural calamities/disasters in the areas which are declared as affected by "disaster" as defined under Section 2(d) of the Disaster Management Act, 2005 by the Ministry of Home Affairs.
Existing Units (under PMRY, REGP, or any other scheme of the Government of India or State Government) and the units that have already availed of Government Subsidy under any other scheme of the Government of India or State Government are not eligible.
Only one person from one family is eligible for obtaining financial assistance for setting up of projects under PMEGP. The 'family’ includes self and spouse.
Negative List of Activities:
The following list of activities will not be permitted under PMEGP for setting up of micro
enterprises/ projects/units:-
Any Industry/ Business connected with Meat(slaughtered), i.e., processing, canning and/or serving items made of it as food, production/Manufacturing or sale of intoxicant items like Beedi/Pan/ Cigar/Cigarette etc., any Hotel or Dhaba or sales outlet serving liquor, preparation/producing tobacco as raw materials, tapping of toddy for sale will not be allowed.
Any Industry/Business connected with cultivation of crops/plantation like Tea, Coffee, Rubber etc. Sericulture (Cocoon rearing), Horticulture, Floriculture, Animal Husbandry will not be allowed.However, value addition under these will be allowed under PMEGP. Off Farm/Farm Linked activities in connection with sericulture, horticulture, floriculture etc. will also be allowed.
Activities prohibited by Local Government/Authorities keeping in view environment or socio-economic factors will not be allowed .
Rs.25.00 lakhs for the manufacturing unit and Rs.10.00 lakhs for Service Unit
What Is The Component Of Project Cost?
Capital Expenditure Loan, one cycle of working capital and 10% of project cost as own contribution in case of General category and 5% of project cost in case of weaker section.
Which Are The Financial Agencies?
27 Public Sector Banks, Regional Rural Banks(RRB), Co-operative Banks, and Private Scheduled Commercial Banks approved by respective State Task Force Committee.
How The Capital Expenditure Loan / Cash Credit Limit Be Utilized ?
Working Capital at least once should touch the 100% limit of Cash Credit within three years of the Lock-in period of M.M. and not less than 75% of the utilization of the sanctioned limit on average.
Where The Beneficiary Has To Submit His/Her Application/ Project?
The beneficiary can submit his/her application/Project online on kvic website www.kvic.org.in / kviconline.gov.in/pmegpeportal. A list of office addresses of KVIC/KVIB/DIC is available at our website.
What Is Village Industry ?
Any Village Industry (except those mentioned in the negative list) located in the Rural Area which produces any goods or renders any service with or without the use of power and in which the fixed capital investment for head of a full time artisans or worker does not exceed Rs.1.00 lakh in plain area and Rs.1.50 lakhs in hilly areas and for A & N Island and Laxdeep Rs.4.5 Lakhs.
What Is Rural Area ?
Any area classified as Village as per the revenue record of the State, irrespective of the population. It also includes an area even if classified as town provided its population does not exceed 20000.
What Is Age Limit ?
Any adult beneficiary above 18 years is eligible for financing under PMEGP.
What Are The Main Criteria Of Project?
It should fulfill the criteria of rural area (for Rural Area project), per capita investment, own contribution, negative list, and the unit should be a new one
Whether EDP Training Is Compulsory?
Before MM Claim through the PMEGP portal, EDP training of 10 working days for a Project cost of More than 5.00 lakhs and 6 Working days of training for up to Project Cost of 5.00 lakhs to the beneficiary is compulsory
Whether Collateral Security Is Mandatory?
As per RBI guidelines, the project costing up to Rs.10.00 lakhs under PMEGP loans are free from collateral security. The CGTSME provided a collateral guarantee for the project beyond Rs.5.00 lakhs and up to Rs.25.00 lakhs under the PMEGP scheme.
What Is PMEGP Scheme, And What Are Its Objectives?
Answer: PMEGP stands for Prime Minister's Employment Generation Programme, which is a credit-linked subsidy scheme launched by the Ministry of MSME, Government of India, to generate employment opportunities in the country. The main objective of the scheme is to create self-employment opportunities for unemployed youth and women entrepreneurs in rural and urban areas.
Who Is Eligible To Apply For PMEGP Scheme, And What Is The Age Limit For The Applicants?
Answer: Any individual above 18 years of age can apply for the PMEGP scheme. However, the maximum age limit for applying is 35 years for general category applicants and 40 years for SC/ST/OBC/PH/Women candidates.
How Can I Apply For The PMEGP Scheme, And What Is The Application Procedure?
Answer: You can apply for the PMEGP scheme through the online portal of KVIC, or offline by submitting the application form to the nearest KVIC office or bank. The application procedure involves filling up the application form, attaching the necessary documents, and submitting it along with the project report.
What Are The Different Types Of Projects That Can Be Set Up Under The PMEGP Scheme?
Answer: The PMEGP scheme supports various types of projects, including manufacturing, service, and business projects. The projects should be viable and have the potential to generate employment opportunities.
How Much Financial Assistance Can I Expect To Receive Under The PMEGP Scheme, And What Is The Repayment Period?
Answer: Under the PMEGP scheme, financial assistance is provided in the form of a subsidy, which ranges from 15% to 35% of the project cost, depending on the category of the applicant. The remaining amount can be obtained as a bank loan. The repayment period for the loan is generally 3 to 7 years.
Can I Apply For Multiple Projects Under The PMEGP Scheme, And What Is The Maximum Limit?
Answer: No, an individual can apply for only one project under the PMEGP scheme. However, a group of individuals can apply for a group project, subject to a maximum of 10 members.
What Are The Documents Required To Apply For The PMEGP Scheme?
Answer: The documents required for PMEGP scheme application include a project report, proof of identity and address, caste certificate (if applicable), educational qualification certificate, and bank account details.
How Long Does It Take For The PMEGP Scheme Application To Be Processed?
Answer: The processing time for the PMEGP scheme application varies from state to state and depends on various factors such as the completeness of the application, the availability of funds, and the number of applications received.
Can I Apply For The PMEGP Scheme For An Existing Business?
Answer: No, the PMEGP scheme is meant for setting up a new business or for expanding an existing business. An existing business is not eligible for financial assistance under the PMEGP scheme.
What Is The Role Of The Khadi And Village Industries Commission (KVIC) In The PMEGP Scheme?
Answer: KVIC is the nodal agency for implementing the PMEGP scheme. It is responsible for receiving and processing the applications, conducting training programs, and disbursing the subsidy to the beneficiaries through the banks.
What Is The Project Report, And How Do I Prepare It?
Answer: The project report is a detailed document that provides information about the proposed project, its feasibility, and financial viability. It includes details like project cost, sources of funding, marketing plan, and expected income and expenses. KVIC provides a format for preparing the project report, which can be downloaded from their website.
Can I Apply For The PMEGP Scheme Offline?
Answer: Yes, you can apply for the PMEGP scheme offline by submitting the application form along with the project report and necessary documents to the nearest KVIC office or bank.
Can I Apply For The PMEGP Scheme Online?
Answer: Yes, you can apply for the PMEGP scheme online through the KVIC portal. The process involves registering on the portal, filling up the application form, and uploading the necessary documents.
What Are The Documents Required For The PMEGP Scheme Application?
Answer: The documents required for the PMEGP scheme application include proof of identity and address, educational qualification certificate, caste certificate (if applicable), project report, and bank account details.
Can I Make Changes To My PMEGP Scheme Application After Submission?
Answer: No, you cannot make changes to your PMEGP scheme application after submission. Therefore, it is important to ensure that all the information provided in the application is accurate and complete before submitting it.
How Long Does It Take For The PMEGP Scheme Application To Be Processed?
Answer: The processing time for the PMEGP scheme application varies from state to state and depends on various factors such as the completeness of the application, the availability of funds, and the number of applications received.
How Will I Know If My PMEGP Scheme Application Has Been Approved?
Answer: Once your PMEGP scheme application is approved, you will receive an approval letter from KVIC or the bank, along with the sanction letter stating the amount of subsidy and loan that you are eligible for.
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Frequently Asked Questions
Launched in August 2008, Prime Minister's Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme, administered by the Ministry of Micro, Small and Medium Enterprises (MSME). PMEGP aims to generate employment opportunities through the establishment of micro-enterprises in the non-farm sector for rural as well as urban areas. The scheme has been approved for continuation over the 15th Finance Commission cycle i.e., for the period of five years from 2021-22 to 2025-26. PMEGP was formed by merging the two schemes that were in operation till 31st March 2008, namely Prime Minister's Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP). An outlay of ₹13,554.42 Crore has been approved for PMEGP for five Financial Years (2021-22 to 2025-26) to set up about 4,00,000 projects with the creation of 30,00,000 employment @8 persons per unit). In addition, 1,000 Units will be upgraded in each FY.
Objectives
To generate employment opportunities in rural as well as urban areas of the country through the setting up of new self-employment ventures/projects/micro enterprises.
To bring together widely dispersed traditional artisans! rural and urban unemployed youth and give them self-employment opportunities to the extent possible, at their place.
To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth in the country, so as to help arrest migration of rural youth to urban areas.
To increase the wage-earning capacity of workers and artisans and contribute to an increase in the growth rate of rural and urban employment.
Implementing Agencies
At the National level, the scheme is being implemented by the Khadi and Village Industries Commission (KVIC), a statutory organization under the administrative control of the Ministry of MSME as the single nodal agency.
At the State level, the scheme is implemented through State offices of KVIC, State Khadi and Village Industries Boards (KVIBs), District Industries Centre's (DICs), Coir Board (for coir-related activities), and Banks. The government may also involve other suitable agencies for the implementation of the scheme.
