Prime Minister’s Employment Generation Programme (PMEGP) Scheme

The Prime Minister’s Employment Generation Programme (PMEGP) was launched in 2008 to promote self-employment opportunities in non-farm sectors across India. The goal behind launching this scheme was to generate sustainable employment by providing financial assistance for setting up new micro-enterprises or projects. 

 

Under PMEGP, eligible beneficiaries can access loans up to ₹25 lakh for manufacturing and ₹10 lakh for service and business sectors. The scheme is implemented through the Khadi and Village Industries Commission (KVIC) at the national level.

 

The PMEGP came about to merge two previous similar government schemes that shared similar goals and benefits - the Prime Minister’s Rozgar Yojana and the Rural Employment Generation Programme. The prime objective of these two programs and the PMEGP scheme is to provide much-needed financial encouragement to Indian entrepreneurs in rural and urban sectors to set up their businesses and enterprises.

 

As a result of these initiatives, the program strives to encourage employment among the country’s youth and aid the community with new ventures. The administration of the PMEGP is handled by the Ministry of Micro Small and Medium Enterprises, while the Khadi and Village Industries Commission governs the implementation on the national level. On the district level, the scheme is handled by District Industries Centres and banks.

 

Here are the highlights covering the PMEGP loan details:

Below are  the key objectives of the PMEGP loan:

• Generating employment opportunities in India's rural and urban areas by setting up various new projects, micro-enterprises, and ventures

• Providing a common structure and source of self-employment opportunities for artisans and sections of unemployed youth spread across the country

• To eliminate the need for rural people to migrate and seek employment opportunities in urban areas by providing them with stable modes of employment within their region. This goes a long way in aiding traditional artisans and sections of unemployed youth who only manage to secure seasonal employment in a year.

• To help boost artisans' income-earning opportunities and capacity and increase the employment rate in rural and urban areas

The PMEGP scheme allows beneficiaries to pay a minimum portion of the cost of the project while applying for subsidies on the loans taken from banks that have been linked to the scheme. The subsidy under this scheme is known as margin money, and it is decided based on the category and geographical area where the applicant is based. Here are the subsidy rates that can be accessed under the PMEGP scheme:

The loan limit available under the PMEGP scheme is ₹50 Lakhs. In the manufacturing sector, the maximum project cost has been set at ₹50 Lakhs. In the business or service sector, this limit is capped at ₹20 Lakhs. For both, the special and general beneficiary of the scheme is required to contribute 5% and 10% of the amount, respectively. Meanwhile, the bank pays the remaining 95% and 90% of the amount, respectively.

 

On the other hand, existing manufacturing units can get additional funding of up to ₹1 Crore under this scheme. Similarly, existing service and trading companies are eligible for extra funding of up to ₹25 Lakhs, as per the regulations of PMEGP.

The PMEGP scheme strives to make a substantial improvement in the employment and entrepreneurship landscape of the country. It follows that the PMEGP loans have specific criteria for budding entrepreneurs or businesses that may be eligible for this beneficial opportunity.

 

Here is a comprehensive list of individual and organisation criteria that determine the eligibility of the PMEGP loan scheme.

• If the beneficiary is an individual, he or she must be above 18 years of age

• For individuals seeking a PMEGP loan for a project cost above ₹ 10 Lakhs within the manufacturing sector, he or she must have studied and passed at least Class 8. The same loan criteria apply for project costs above ₹ 5 Lakhs within the business or service sector.

• Self-help groups are also eligible for PMEGP loans. This is, however, contingent on the condition that the group has not received any benefits under any other scheme.

• Societies registered under the Societies Registration Act of 1860 are eligible for PMEGP loans

• Co-operative Societies involved in production businesses

• Charitable Trusts

 

Here is the list of documents you will need to apply for the scheme:

• Application form with passport-sized photographs

• Identity & Address Proofs

• PAN card, Aadhaar card & VIII Pass certificate

• Project Report

• Special category certificate, if required

• Certificate of Entrepreneur Development Programme (EDP)

• Caste Certificate for SC/ST/OBC/Minority/Ex-Servicemen/PHC

• Certificate of academic and technical courses, if any

• Any other documents required by the bank or NBFC

Below we have tabulated the leading financial institutions that support funding assistance as part of the PMEGP scheme.

IDFC First Bank	Bank of Baroda
Indian Bank	Bank of India
Federal Bank	Canara Bank
Punjab National Bank	Central Bank of India
IDBI Bank	HDFC Bank
UCO Bank	ICICI Bank Ltd.
Union Bank of India	Axis Bank Ltd.

For the PMEGP scheme list, please visit the official website of PMEGP.

Finally, after checking your eligibility criteria and collecting all the necessary documents, all that remains in the process of getting the PMEGP loan is the application process. Here are the simple steps you need to follow while making a PMEGP online application:

• Start by logging on to the official E-portal page of the PMEGP scheme on the KVIC website online

• Click on the applicable option available on the page - individual or non-individual - and you will be directed to an online application form

• Fill out the relevant details on the form

• When completed, click the ‘Save Applicant Data’ button at the bottom of the page

• The last step will require you to upload the necessary documents and submit the application

• You will receive all application-related details on the contact details you provide. The applicable PMEGP loan for you will subsequently be processed.

Finally, after checking your eligibility criteria and collecting all the necessary documents, all that remains in the process of getting the PMEGP loan is the application process. 

 

Here are the simple steps you need to follow while making a PMEGP online application:

• Start by logging on to the official E-portal page of the PMEGP scheme on the KVIC website online https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp

• Click on the applicable option available on the page and you will be directed to an online application form

• Fill out the relevant details on the form

• When completed, click the ‘Save Applicant Data’ button at the bottom of the page

• The last step will require you to upload the necessary documents and submit the application

• You will receive all application-related details on the contact details you provide. The applicable PMEGP loan for you will subsequently be processed.

 

Those seeking to become beneficiaries of subsidies under the PMEGP scheme can apply through the offline mode using the following steps: 

• Download the PMEGP scheme application form by visiting https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp#

• You will see a sliding message on the screen to download the application form in regional languages. At the end of the message, you will see the “Click Here” option.

• Download the application and fill in all the necessary details

• Submit the print out of the form at the nearest network bank

• The bank will require you to complete some formalities

• A bank representative will get in touch with you upon the approval or rejection of your application