Prime Minister's Employment Generation Programme (PMEGP)
Government of India
Prime Minister's Employment Generation Programme (PMEGP)
Quick Navigation
The PMEGP is a central-sector scheme run by the Ministry of Micro, Small & Medium Enterprises, Government of India, with its national-level implementation through the Khadi & Village Industries Commission as the nodal agency. Launched by merging two earlier schemes in 2008-09, the scheme is approved for continuation for the period 2021-22 to 2025-26. The purpose of the scheme is to generate employment opportunities by establishing micro-enterprises in non-farm sectors, both in rural and urban areas. Your business could benefit by accessing credit-linked subsidy support to start or expand a micro-enterprise.
Key Features
Credit-linked subsidy scheme for new micro-enterprises
Under PMEGP you can set up a new unit and avail subsidy on the cost of the project while the balance is financed by the bank.
Applicable in rural as well as urban areas
The scheme covers both rural and urban locations, recognising the need for employment generation beyond agricultural sector.
Maximum project cost limits differ by sector
For example, for new units manufacturing sector the admissible maximum project cost is up to ₹50 lakh and for business/service sector up to ₹20 lakh.
Beneficiary contribution required, subsidy percentage varies by area/category
The applicant must contribute part of project cost (e.g., 10% for General category) and subsidy rate differs: e.g., rural general category 25%, urban general 15% etc. For special categories higher subsidy.
Implemented via banks/financial institutions through nodal agencies
Implementation is through KVIC at national level, state KVIBs or KVIC directorates or District Industries Centres plus banks/finance institutions for sanction & disbursement.
Financial Assistance
| Component | Assistance | Details |
|---|---|---|
| Project cost admissible | Up to ₹50 lakh for manufacturing, ₹20 lakh for business/service sector | Example: If you plan a manufacturing unit costing ₹40 lakh, it's within admissible limit under scheme. |
| Beneficiary contribution | Typically 10% for general category | Example: If project cost is ₹10 lakh, you might contribute ₹1 lakh, rest is bank loan plus subsidy. |
| Subsidy rate | Varies based on category - Rural general category: 25%, Urban general category: 15% of project cost. 35% for special categories such as SC/ST/PwD/Minorities etc | Example: In a rural area project of ₹10 lakh general category, subsidy of 25% i.e., ₹2.5 lakh; rest financed through bank + beneficiary contribution. |
Eligibility Criteria
Who Can Apply
Eligible Candidates
- 1Individuals aged 18 years and above.
- 2Must have passed at least 8th standard for projects above ₹10 lakh or ₹5 lakh.
- 3Self-Help Groups, Societies, Charitable Trusts, and Co-operatives involved in production activity are eligible.
- 4The applicant should not have availed similar subsidy under other schemes.
Who Cannot Apply
Ineligible Candidates
- Existing units or beneficiaries under PMRY, REGP, or any central/state subsidy scheme.
- Non-manufacturing/trading units not engaged in production or service activity.
- Applicants with loan defaults or blacklisted by banks.
Documents Required
Identity proof of applicant
Mandatory
Address proof
Mandatory
Bank account in applicant's name
Mandatory
Project report including cost, item details, machinery list etc.
Mandatory
Training certificate if EDP required
Mandatory
Udyam registration certificate
Mandatory
Any other documents as required by bank or nodal agency
Mandatory
How to Apply
Bank Branch
- 1Visit KVIC online portal or DIC/KVIC field office.
- 2Register with Aadhaar & Udyam Registration number.
- 3Fill the online form or printed application.
- 4Upload DPR, ID proofs, and required documents.
- 5Participate in Entrepreneurship Development Programme training if required.
- 6Application is forwarded to the bank for appraisal and sanction.
- 7Once approved, subsidy is released to the bank and adjusted after successful loan disbursal.