The Prime Minister Employment Generation Programme (PMEGP) is a flagship government subsidy scheme that was launched by the government, especially for the unemployed youth. It is implemented by the Khadi and Village Industries Commission (KVIC) at a national level with the primary aim of encouraging the youth to become entrepreneurs and generate employment for themselves and for others.
PMEGP 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.
Read the article to learn more about the government scheme, including information on the process of viewing the PMEGP scheme list 2025 or about the PMEGP loan apply online process.
Overview
The table below summarises some key details about the PMEGP that one should know before applying for it.
| 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, and charitable trusts. |
| Loan Limit | Rs. 25 lakhs (manufacturing), Rs. 10 lakhs (services). |
| Subsidy | 15%-35%, based on applicant category and location. |
| Collateral Requirement | None for projects up to Rs. 10 lakh. |
| PMEGP loan interest rate | Regular interest rates (11%-12%). |
| Repayment Tenure | 3 to 7 years. |
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What Is The 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 of the PMEGP scheme list 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 Of PMEGP
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:
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Subsidy-Linked Financial Assistance: Financial assistance ranging from 15% to 35% is provided to eligible beneficiaries.
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Focus on New Enterprises: Emphasises new or greenfield enterprises to promote self-employment and reduce dependence on existing businesses.
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Mixed Eligibility: Open to individuals, Self-Help Groups, charitable trusts, cooperatives, and other entities.
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Employment Generation: The scheme aims to create jobs and enhance business activity in both rural and urban sectors.
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Loan Limit: Provides loans up to ₹25 lakh for manufacturing and ₹10 lakh for services.
Objectives Of PMEGP
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:
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To boost income by increasing the wage-earning capacity of artisans and workers.
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To solve the issue of migration by providing employment opportunities to youth in rural and urban areas.
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To retrieve and promote sustainable employment for traditional and prospective artisans.
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Subsidy One Can Get Through The PMEGP Loan Scheme
The PMEGP offers a subsidy based on the project location and the applicant’s category, as mentioned in the PMEGP loan subsidy details PDF. The details are mentioned below in tabular form:
| 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 government 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-access loans. Here are the main aspects of the PMEGP scheme:
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Loan Sanction: Up to 95% of the project cost.
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Subsidy: 15%-30% margin money subsidy provided by the government.
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Interest Rate: Regular bank interest rates apply (11%-12%).
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Repayment Tenure: 3 to 7 years, with a preliminary moratorium period.
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PMEGP Scheme Benefits
The PMEGP offers several incentives to promote self-employment, especially in rural and urban areas. The government scheme helps establish new units, provides credit support, and offers grants to individuals from different backgrounds. Key PMEGP scheme benefits include:
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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.
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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.
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Subsidies: Subsidies are provided based on the project location and the 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.
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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.
What Is The PMEGP Loan 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 PMEGP loan eligibility requirements for applying under this scheme:
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A major, above 18 years of age
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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.
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Self-Help Groups, Charitable Trusts, and Production Cooperative Societies.
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Institutions registered under the Societies Registration Act of 1860.
Application Procedure Of PMEGP
The process of PMEGP loan apply to be a beneficiary under the Prime Minister’s Employment Generation Programme is as follows:
Step 1: Visit the official website PMEGP portal.
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.
What Are The Documents Required For PMEGP?
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:
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Caste Certificate: Proof of caste, if applicable.
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Rural Area Certificate: Required for rural applicants.
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Project Report: Detailed report on the proposed project.
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Education Certificate: For projects above the Rs. 10 lakh (manufacturing) or Rs. 5 lakh (services) threshold.
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ID Proof: Aadhaar card or other identity documents.
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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 schemes like the Prime Minister Employment Generation Programme (PMEGP).
This government initiative not only aims to minimise the rate of unemployment but also motivates the unemployed youth to stop waiting and create employment for themselves and others by entering the field of entrepreneurship. It provides them with support in various forms, like in terms of finance, skill building, and training as and when necessary, so that they establish their micro businesses with proper and adequate knowledge and funds.
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