The Prime Minister’s Employment Generation Programme (PMEGP) helps people set up new micro enterprises in manufacturing and services by giving a subsidy on bank loans. It is one of the main self employment schemes of the central government. Here is a simple guide.
Who runs it
PMEGP is run by the Ministry of Micro, Small and Medium Enterprises. The Khadi and Village Industries Commission (KVIC) is the nodal agency at the national level. State KVIC offices, Khadi and Village Industries Boards and District Industries Centres implement it on the ground, while banks give the loans.
Project cost limits
- Manufacturing units: up to Rs 50 lakh.
- Service units: up to Rs 20 lakh.
Subsidy rates
The subsidy, called margin money, depends on the applicant’s category and location:
- General category: 15 percent in urban areas and 25 percent in rural areas.
- Special categories, including SC, ST, OBC, minorities, women, ex servicemen, persons with disabilities, transgender persons and people from the North East, hill and border areas and aspirational districts: 25 percent in urban areas and 35 percent in rural areas.
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Own contribution
- General category: 10 percent of the project cost.
- Special categories: 5 percent.
The rest is given as a bank loan.
Who is eligible
- Any individual above 18 years of age.
- For projects above Rs 10 lakh in manufacturing or Rs 5 lakh in services, the applicant should have passed at least class 8.
- Only new projects qualify. Existing units and units that have already received a government subsidy are not eligible.
- Self help groups, charitable trusts and some societies can also apply.
How to apply
- Visit the PMEGP e-portal on the KVIC website.
- Choose the application form for individuals or others.
- Fill in personal details, project details and the bank you prefer.
- Upload a project report and documents.
- Submit and track the status online.
The application is checked by a district level committee and sent to the bank. After the loan is sanctioned, the applicant completes a short entrepreneurship training programme.
Second loan for upgrade
Existing PMEGP units that perform well can get a second loan for expansion, with a smaller subsidy, under conditions set in the scheme.
Scheme period
The scheme has been approved for the current Finance Commission cycle. Check the official portal for the latest guidelines and any change in limits.
Bottom line
PMEGP lowers the cost of starting a small business through a subsidy of 15 to 35 percent. A sound project report and the online KVIC portal are the keys to getting started.
Source / स्रोत: PMEGP e-portal, KVIC, Ministry of Micro, Small and Medium Enterprises, Press Information Bureau
