Who is eligible to apply for PMEGP?

Any individual above 18 years of age can apply. For projects costing above ₹10 lakh in the manufacturing sector and above ₹5 lakh in the business/service sector, the applicant must have at least passed the 8th standard.

What kind of financial assistance is provided under PMEGP?

The maximum cost of the project/unit admissible under the manufacturing sector is ₹25 lakh, and under the business/service sector, it is ₹10 lakh.

How can one apply for PMEGP?

Applications can be submitted online through the official PMEGP e-portal.

What types of projects are eligible for funding under PMEGP?

Only new projects are considered for funding under PMEGP.

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PMEGP Scheme - Prime Minister's Employment Generation Programme for New Entrepreneurs

Q: What is the Prime Minister’s Employment Generation Programme (PMEGP)?

PMEGP is a credit-linked subsidy scheme aimed at generating employment opportunities through the establishment of micro-enterprises in both rural and urban areas of India.

Tanisha

Author

Updated: 28-01-2025 at 6:26 AM

PMEGP Scheme - Prime Minister's Employment Generation Programme for New Entrepreneurs

The PMEGP (Prime Minister Employment Generation Programme) has been approved for continuance by the 15th Finance Commission. The current applicable period of this government scheme began in 2021-2022 and shall end in 2025-2026.

Aspect	Details
Scheme Name	Prime Minister Employment Generation Programme (PMEGP)
Launched By	Ministry of Micro, Small, and Medium Enterprises (MSME)
Implementing Body	Khadi and Village Industries Commission (KVIC)
Eligibility	Individuals above 18 years, SHGs, cooperative societies, charitable trusts
Loan Limit	Rs. 25 lahks (manufacturing), Rs. 10 lahks (services)
Subsidy	15%-35%, based on applicant category and location
Collateral Requirement	None for projects up to Rs. 10 lakh
Interest Rate	Regular interest rates (11%-12%)
Repayment Tenure	3 to 7 years

What Is PMEGP Scheme?

The PMEGP scheme, supported by capital-cum-credit, was introduced by the Ministry of Small-Scale Industries of India to provide micro-enterprises in the non-farm economy with funding assistance. The objective is to promote self-employment by encouraging traditional artisans and unemployed youth to start their ventures. A subsidy is provided, ranging from 15% to 35% of the project cost, depending on the category and location (urban or rural).

Features

The PMEGP scheme is designed to promote entrepreneurship and self-employment across all sections of society, both in rural and urban areas. It allows individuals and institutions to establish new ventures and reduce unemployment by providing capital and grants.

The govt scheme focuses on greenfield projects, encouraging innovation and self-reliance among aspiring entrepreneurs. It is especially beneficial for those aiming to set up small industrial units or service establishments. The main features of the PMEGP scheme include:

Subsidy-Linked Financial Assistance: Financial assistance ranging from 15% to 35% is provided to eligible beneficiaries.
Focus on New Enterprises: Emphasises new or greenfield enterprises to promote self-employment and reduce dependence on existing businesses.
Mixed Eligibility: Open to individuals, Self-Help Groups, charitable trusts, cooperatives, and other entities.
Employment Generation: The scheme aims to create jobs and enhance business activity in both rural and urban sectors.
Loan Limit: Provides loans up to ₹25 lakh for manufacturing and ₹10 lakh for services.

Objectives

The Prime Minister’s Employment Generation Programme (PMEGP) is designed to encourage self-employment and the development of small enterprises in both rural and urban areas. The initiative aims to improve the livelihoods of traditional artisans, unemployed youth, and small business owners by providing financial support, resources, and other means to help them create sustainable livelihoods. The main objectives of PMEGP include:

To boost income by increasing the wage-earning capacity of artisans and workers.
To solve the issue of migration by providing employment opportunities to youth in rural and urban areas.
To retrieve and promote sustainable employment for traditional and prospective artisans.

Subsidy One Can Get Through PMEGP Loan Scheme

The PMEGP offers a subsidy based on the project location and the applicant’s category:

Beneficiary Category	Beneficiary’s Share	Urban Subsidy Rate	Rural Subsidy Rate
General Category	10%	15%	25%
Special Category (SC/ST/OBC/Women)	5%	25%	35%

PMEGP Loan Limit

The maximum loan limit under the PMEGP scheme is as follows:

Manufacturing Sector: Up to Rs. 25 lakh.
Service Sector: Up to Rs. 10 lakh.

Beneficiaries are required to contribute 5% to 10% of the project cost, while the remaining 90% to 95% is financed through bank loans. The govt scheme offers a margin money subsidy, reducing the amount the beneficiary needs to borrow.

PMEGP Loan Details

The PMEGP loan scheme is a vital financial assistance initiative for aspiring entrepreneurs with small business ideas. It promotes the establishment of new ventures through a mix of subsidies and easy-to-avail loans. Here are the main aspects of the PMEGP scheme:

Loan Sanction: Up to 95% of the project cost.
Subsidy: 15%-30% margin money subsidy provided by the government.
Interest Rate: Regular bank interest rates apply (11%-12%).
Repayment Tenure: 3 to 7 years, with a preliminary moratorium period.

Benefits

The PMEGP offers several incentives to promote self-employment, especially in rural and urban areas. The govt scheme helps establish new units, provides credit support, and offers grants to individuals from different backgrounds. Key benefits of the PMEGP include:

Financial Assistance: Financial aid is provided for the setting up of small-scale enterprises or MSMEs under the government scheme. Eligible project costs are 25 lakh rupees for the manufacturing sector and 10 lakh rupees for the service sector.
Greenfield Enterprises: Only greenfield or new MSMEs are granted assistance under the Sarkari scheme. No existing units or enterprises are eligible to avail the benefits of this scheme. This promotes the setting up of new enterprises and generates entrepreneurial units as well.
Subsidies: Subsidies are provided based on the project location and category of the applicant. The subsidy rates for applicants from the general category are 15% in the urban areas and 25% in the rural areas. The subsidy rates for members of the SC/ST/OBC community and women get higher subsidy rates.
Job Opportunities: The main goal and benefit of the scheme or programme is that it generates job opportunities for other people as well. It promotes the growth of the country.

Eligibility Criteria

The Prime Minister’s Employment Generation Programme (PMEGP) provides financial support and encourages entrepreneurship across various sectors. Like every government scheme, PMEGP has specific eligibility criteria to ensure that the right people receive the necessary assistance. Whether you're an individual, a group, or an institution, meeting these criteria increases your chances of receiving the financial help needed to start or grow your business. Below, we outline the key eligibility requirements for applying under this scheme:

A major, above 18 years of age
No educational qualification for projects costing up to 10 lakhs in the manufacturing sector and up to 5 lakhs in the services sector. A minimum qualification of having passed the VIIIth grade is necessary for project costs above the ceiling.
Self-Help Groups, Charitable Trusts and Production Cooperative Societies.
Institutions registered under the Societies Registration Act of 1860.

Application Procedure

The application procedure to be beneficiary under the Prime Minister’s Employment Generation Programme is as follows:

Step 1: Visit the official website Of PMEGP.

Step 2: Click on the “Online Application” option.

Step 3: Fill in the requisite details and click on ‘save applicant data’.

Step 4: Upload the required documents such as ID and address proof and proceed with the final submission.

Step 5: Your application will be reviewed and processed.

Step 6: You can check the status of your application here.

Documents Required

In the PMEGP scheme application, applicants must submit certain documents to prove their eligibility and provide details about their project proposal. These documents help assess the applicant’s qualifications and determine how practical their business plan is. The required documents include:

Caste Certificate: Proof of caste, if applicable.
Rural Area Certificate: Required for rural applicants.
Project Report: Detailed report on the proposed project.
Education Certificate: For projects above the Rs. 10 lakh (manufacturing) or Rs. 5 lakh (services) threshold.
ID Proof: Aadhaar card or other identity documents.

Conclusion

The generation of more employment opportunities for youth and local artisans in both urban and rural areas is necessary to prevent migration and loss of traditional artefacts. The Indian small-scale industry is currently flourishing owing to such schemes.

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