In 2008, the Government of India launched a very important scheme called the Prime Minister’s Employment Generation Programme or PMEGP Scheme . It is a special program aimed at creating new jobs in both rural and urban areas by helping people start small businesses. The Ministry of Micro, Small, and Medium Enterprises (MSME) manages this scheme.
What Is PMEGP Scheme?
PMEGP is a credit-linked subsidy scheme that was created by merging two older programs: the Prime Minister’s Rojgar Yojana (PMRY) and the Rural Employment Generation Programme (REGP). It has been approved to continue from 2021-22 to 2025-26. This program is expected to create 30 lakh jobs (3 million jobs) through the establishment of 4 lakh micro-enterprises over five years, with a total budget of ₹13,554.42 crore.
Objectives of PMEGP Scheme
- Generate Employment: PMEGP helps people, especially in rural areas, to set up businesses and create jobs.
- Support Local Artisans and Youth: It encourages young people and skilled workers to start businesses close to home so they don’t have to move to cities for work.
- Sustainable Jobs: The aim is to provide jobs that last a long time and pay well, helping reduce migration from villages to urban areas.
- Boost Incomes: By providing job opportunities, PMEGP helps increase the income of workers and artisans in rural and urban areas.
How PMEGP Works
The PMEGP scheme gives money in the form of a subsidy to people who want to start a micro-enterprise or upgrade an existing one. This financial help is known as Margin Money Subsidy, and it reduces the amount of loan that needs to be repaid.
Who Implements PMEGP Scheme?
- At the National Level: The main agency is the Khadi and Village Industries Commission (KVIC).
- At the State Level: State offices of KVIC, State Khadi and Village Industries Boards (KVIBs), District Industries Centres (DICs), and Coir Board are responsible for implementing the scheme. Banks also play a major role in providing loans.
Benefits of PMEGP Scheme
PMEGP funds are split into two main parts:
- Margin Money Subsidy:
- Money is set aside each year for people starting new businesses.
- ₹100 crore per year is reserved to upgrade existing businesses.
- Backward and Forward Linkages:
- 5% of the total budget is used for training programs, awareness camps, exhibitions, meetings, and workshops to promote the scheme.
- Funds are also used for things like setting up Entrepreneurship Facilitation Centres (EFCs), hiring experts, upgrading IT infrastructure, and physical verification of businesses.
Support Levels Under PMEGP Scheme
1. Setting Up New Micro-Enterprises
Beneficiary Categories and Subsidy Rates:
- General Category: Must contribute 10% of the project cost. Subsidy is:
- 15% for urban areas.
- 25% for rural areas.
- Special Category: (Includes SC/ST/OBC, minorities, women, ex-servicemen, differently-abled, and people from the North-East Region or hill areas)
- Must contribute 5% of the project cost. Subsidy is:
- 25% for urban areas.
- 35% for rural areas.
- Must contribute 5% of the project cost. Subsidy is:
Project Cost Limits:
- For manufacturing units, the maximum project cost eligible for subsidy is ₹50 lakh.
- For service or business units, the limit is ₹20 lakh.
- Any amount above these limits can be financed by banks without government subsidy.
2. Upgrading Existing Units
Second Loan for Upgradation:
- Beneficiary Contribution: 10% of the project cost.
- Subsidy Rate:
- 15% for most areas.
- 20% for the North-East Region and hill states.
Project Cost Limits for Upgradation:
- Manufacturing Units: Maximum project cost eligible for subsidy is ₹1 crore, with a maximum subsidy of ₹15 lakh (or ₹20 lakh in special areas).
- Business/Service Units: Maximum project cost eligible is ₹25 lakh, with a maximum subsidy of ₹3.75 lakh (or ₹5 lakh in special areas).
Who Can Apply?
- Eligibility for New Enterprises:
- Must be 18 years or older.
- There is no income limit for applicants.
- If the project cost is more than ₹10 lakh (manufacturing) or ₹5 lakh (service/business), the applicant must have passed at least 8th grade.
- Only new projects are eligible, and businesses that have already received subsidies under other government schemes cannot apply.
- Eligibility for Upgrading Existing Units:
- The first loan under PMEGP/REGP/MUDRA must be repaid successfully.
- The business must be profitable and have growth potential.
- Margin money from the initial subsidy must have been adjusted after the three-year lock-in period.
Priority and Exclusions
Who Gets Priority?
- People affected by natural disasters in areas officially declared as disaster zones are given priority for assistance.
Who Is Excluded?
- Existing businesses that have already availed of government subsidies are not eligible.
- Only one person from a family (including spouse) can get financial help under PMEGP.
Negative List of Activities: Certain types of businesses are not supported, such as:
- Activities related to meat processing and liquor sales.
- Making or selling intoxicants like cigarettes or tobacco products.
- Environmentally harmful activities, such as making plastic bags below a certain thickness.
- Farming and animal husbandry, except for value-added products like processed dairy or poultry farming.
How to Apply
Applications can be submitted online or offline.
1. Application For New Unit:
- Visit the official website https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp.
- Click on the “Apply” button under the “Application For New Unit” tab .
- Furnish all the required details on https://www.kviconline.gov.in/pmegpeportal/jsp/pmegponline.jsp and click on Save Applicant Data.
- On the next page, upload the required documents and proceed for final submission.
2. Application For Existing Units (2nd Loan):
- Visit the official website https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp.
- Click on the “Apply” button under “Application For Existing Units (2nd Loan)” tab.
- Click on the Online Application tab and fill the complete form on : https://www.kviconline.gov.in/pmegpeportal/pmegpIILOAN/index.jsp.
- Complete the form and click on Next page, upload the required documents and proceed for final submission.
3. Login Form For Registered Applicant of Second Loan Subsidy for Upgrading of Existing Unit:
- Visit the official website of PMEGP Portal: https://www.kviconline.gov.in/pmegpeportal/pmegpIILOAN/applicantLogin.jsp.
- Enter your User ID and Password and click Log in.
Offline Application Form for Individual Applicant:
- Fill the complete form : https://www.kviconline.gov.in/pmegpeportal/dashboard/notification/Drfat%20signed.pdf
- Filled original form shall be submitted to the concerned KVIC/KVIB/DIC/Coir Board Officers of State.
- On submission, the applicant shall receive the Acknowledgement Slip from the department of concerned KVIC/KVIB/DIC/Coir Board Office.
Documents Required:
- Caste certificate (if applicable)
- Special category certificate (if needed)
- Rural area certificate
- Project report
- Educational and training certificates
Login for Registered Applicants:
- Use your User ID and password on the PMEGP portal to track your application status or apply for upgradation.
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Conclusion
PMEGP Schemeis an incredible opportunity for people across India to become entrepreneurs and improve their lives. It focuses on empowering rural and urban populations by providing financial support and training. If you have a business idea and are ready to take the first step, PMEGP could be the key to your success.
Here are the answers to your frequently asked questions regarding the PMEGP (Prime Minister’s Employment Generation Programme) scheme:
Frequently Asked Questions (FAQs)
1. What Is Maximum Project Cost Allowed Under PMEGP?
The maximum project cost allowed under the PMEGP scheme is generally ₹25 lakhs for manufacturing projects and ₹10 lakhs for service projects.
2. What Is The Component Of Project Cost?
The components of project cost typically include land, building, machinery, equipment, and working capital. It may also cover other operational costs necessary for setting up the business.
3. Which Are The Financial Agencies?
Financial agencies involved in the PMEGP scheme include nationalized banks, scheduled commercial banks, regional rural banks, and financial institutions recognized by the government.
4. How The Capital Expenditure Loan / Cash Credit Limit Be Utilized?
The capital expenditure loan can be utilized for purchasing machinery, equipment, and for building or repairing a facility. Cash credit limits may be used for day-to-day operational expenses like raw materials, salaries, and other working capital needs.
5. Where The Beneficiary Has To Submit His/Her Application/ Project?
Beneficiaries must submit their applications to the nearest Khadi and Village Industries Commission (KVIC) office or to the concerned state directorate of industries.
6. What Is Village Industry?
Village industries are small-scale industries located in rural areas that utilize local resources and labor. They often involve traditional crafts and local raw materials.
7. What Is Rural Area?
A rural area is typically defined as a region located outside towns and cities, characterized by low population density and often focused on agriculture or natural resource use.
8. What Is Age Limit?
The age limit for applicants under the PMEGP scheme is usually between 18 and 50 years. However, this can vary based on specific conditions or categories of applicants.
9. What Are The Main Criteria Of Project?
Main criteria include the viability of the project, financial projection, market demand, and the capability of the applicant to run the business successfully.
10. Whether EDP Training Is Compulsory?
Yes, Entrepreneurship Development Programme (EDP) training is often mandatory for applicants to ensure they have the necessary skills to manage and run their business.
11. Whether Collateral Security Is Mandatory?
Collateral security is generally not mandatory for loans under the PMEGP scheme, especially for smaller amounts, but banks may require it based on their policies or the project cost.
12. What Is PMEGP Scheme, And What Are Its Objectives?
The PMEGP scheme aims to facilitate self-employment and entrepreneurship in rural and semi-urban areas by providing financial assistance. Its objectives include generating employment opportunities and promoting small enterprises.
13. Who Is Eligible To Apply For PMEGP Scheme, And What Is The Age Limit For The Applicants?
Eligibility criteria generally include individuals above 18 years, self-help groups, and institutions. The age limit is typically between 18 and 50 years.
14. How Can I Apply For The PMEGP Scheme, And What Is The Application Procedure?
Applicants can apply online through the official PMEGP website or offline by submitting their application to the nearest KVIC office along with the required documents.
15. What Are The Different Types Of Projects That Can Be Set Up Under The PMEGP Scheme?
Projects can include manufacturing units, service industries, and agro-based businesses among others, as long as they meet the eligibility criteria.
16. How Much Financial Assistance Can I Expect To Receive Under The PMEGP Scheme, And What Is The Repayment Period?
Financial assistance can vary, but generally, it covers 15% to 25% of the project cost as a subsidy. The repayment period is typically between 3 to 7 years.
17. Can I Apply For Multiple Projects Under The PMEGP Scheme, And What Is The Maximum Limit?
Yes, you can apply for multiple projects under the PMEGP scheme, but individual project cost limits apply as specified earlier.
18. What Are The Documents Required To Apply For The PMEGP Scheme?
Common documents include identity proof, address proof, project report, bank loan sanction letter, and photographs.
19. How Long Does It Take For The PMEGP Scheme Application To Be Processed?
The processing time can vary, but generally, it may take around 30 to 90 days for application approval.
20. Can I Apply For The PMEGP Scheme For An Existing Business?
Yes, you can apply for financial assistance to expand or diversify an existing business under certain conditions.
21. What Is The Role Of The Khadi And Village Industries Commission (KVIC) In The PMEGP Scheme?
KVIC serves as the nodal agency for implementing the PMEGP scheme, providing guidance, training, and support to beneficiaries.
22. What Is The Project Report, And How Do I Prepare It?
A project report outlines the details of the proposed business, including objectives, market analysis, financial projections, and operational plans. It can be prepared by consulting local industry experts or using templates available online.
23. Can I Apply For The PMEGP Scheme Offline?
Yes, you can apply offline by submitting the application form and required documents to the local KVIC office.
24. Can I Apply For The PMEGP Scheme Online?
Yes, the PMEGP application can be submitted online through the official PMEGP website.
25. What Are The Documents Required For The PMEGP Scheme Application?
Required documents usually include proof of identity, address, a detailed project report, and a bank loan sanction letter.
26. Can I Make Changes To My PMEGP Scheme Application After Submission?
Generally, changes may not be allowed after submission, but it’s best to check with the respective authority for specific policies regarding modifications.
27. How Will I Know If My PMEGP Scheme Application Has Been Approved?
You will typically receive a notification via email or a formal letter from the concerned authority regarding the approval status of your application.
