• Prime Minister’s Employment Generation Programme (PMEGP)

    The Prime Minister’s Employment Generation Programme (PMEGP) is a scheme offered to provide financial assistance to those who wish to set up new enterprises under the programme. The nodal agency responsible for the implementation of the scheme at the national level is the Khadi and Village Industries Commission (KVIC). The scheme is implemented via State Khadi and Village Industries Commission Directorates, District Industries Centres, State Khadi and Village Industries Board, and banks at the state level.

    Similar to PMEGP Loan we can opt personal loan

    • To create job opportunities in urban areas as well as rural regions of India via the establishment of new self-employment ventures, micro enterprises, and projects.
    • To offer sustainable and continuous employment to a relatively large segment of prospective as well as traditional artisans and unemployed youth from both urban as well as rural areas of India.
    • To connect/unite widely dispersed urban and rural unemployed youth/traditional artisans and provide them with self-employment opportunities.
    • To raise artisans’ wage-earning capacity while contributing to the raise in the growth rate of both urban as well as rural employment.

    Nature of Assistance Offered by Prime Minister’s Employment Generation Programme (PMEGP)

    The maximum amount of the unit/project that is permitted in the manufacturing sector is limited to Rs.25 lakh, while the limit for the service/business sector is set at Rs.10 lakh. Here are the beneficiary’s subsidy rate categories under the programme:

    Beneficiary Categories  Beneficiary’s share of total project  Subsidy rate (From Govt.) – Urban  Subsidy rate (From Govt.) – Rural 
    General  10%  15%  25% 
    Special*  5%  25%  35% 

    *Special category (inclusive of minorities, SC/ST, ex-servicemen, OBC, NER, physically handicapped, hill and border regions, etc.): 25% for urban and 35% for rural

    The remaining amount of the overall project cost will be offered by banks as working capital and term loan.

    PMEGP Eligibility Criteria

    Here are the eligibility criteria for new enterprises (units) that wish to avail the Prime Minister’s Employment Generation Programme:

    • Must be at least 18 years of age
    • Must have completed at least VII standard (for those seeking funding in excess of Rs.5 lakh in the service/business sector and more than Rs.10 lakh in the manufacturing sector)
    • Self Help Groups (SHGs inclusive of those that fall Below Poverty Line provided they have not received any benefits from any other scheme)
    • Institutions registered under Societies Registration Act, 1860
    • Charitable Trusts
    • Production Co-operative Societies
    • Existing units (under REGP, PMRY or any other State or Central Government scheme) and units that have availed subsidies under any other State or Central Government Scheme do not qualify for this programme

    PMEGP Loan Interest Rate

    The interest rate applicable to PMEGP shall be the normal interest rate ranging between 11% to 12%, and the repayment tenure can range from three years to seven years following an initial moratorium.

    How to Apply for PMEGP Loan Online?

    The Divisional/State Directors of Khadi and Village Industries Commission in consultation with the Director of Industries of respective states and the Khadi and Village Industries Board will release local advertisements via electronic and print media wherein applications will be invited together with project proposals from potential beneficiaries who wish to start a service unit or establish an enterprise under the programme.

    The procedure to apply for PMEGP loan on the portals is given below:

    • Visit any one of the websites by clicking on any one of the links kviconline.gov.in or my.msme.gov.in
    • Once you have been directed to the website, click on ‘Prime Minister Employment Generation Programme’ or ‘PMEGP ePortal’ 
    • The next step is to click on ‘Application Form for Individual’. The application form will be displayed on your screen 
    • It is important to note that the portal will have two unique application forms – one for institutional applicants and another for individuals.  
    • You must duly fill the application form by providing details such as name, type of activity, sponsoring agency, educational qualification, details of your bank account, etc. 
    • Once you have filled the form, click on ‘Save applicant data’ 
    • Upload the necessary documents and submit it 
    • Once you have submitted your documents and the application form, you will get an application ID and a password sent to your registered mobile number 

    Documents Required for PMEGP Loan

    Here are the documents you will have to submit for Prime Minister’s Employment Generation Programme:

    • Caste certificate
    • Aadhaar Card
    • PAN card
    • Project Report
    • Special category certificate
    • Education or skill development or Entrepreneurship Development Programme training certificate
    • Rural area certificate
    • Registration certificate, authorisation letter and certificate for special category when required, for institutions

    Nodal Agencies in PMEGP Implementation

    The following are the other agencies associated by nodal agencies in PMEGP implementation:

    • Field offices of Khadi and Village Industries Commission along with its state offices
    • District Industries Centre of every Union Territories Administrations and State Governments that report to their respective Secretaries or Commissioners
    • State Khadi and Village Industries Boards(KVIBs)
    • Coir Board
    • Khadi and Village Industries Federation
    • Banks and financial institutions
    • Panchayati Raj Institutions, Department of Women and Child Development, the Army Wives Welfare Association of India, and Nehru Yuva Kendra Sangathan
    • Non-government Organisations that have a minimum of 5 years expertise and experience in project consultancy so far as rural development, technical consultancy services, small agro and rural industrial promotion, social welfare, etc. is concerned
    • Technical colleges or professional institutions recognised by the Government, AICTE (All India Council for Technical Education), University and UGC (University Grants Commission) that have technical courses which offer skill-based training such as rural polytechnic, ITI, etc., and those with departments for vocational training
    • Departmental as well as non-departmental training centres of Khadi and Village Industries Commission or Khadi and Village Industries Board
    • Certified Khadi and Village Industries aided by the Khadi and Village Industries Commission or Khadi and Village Industries Board provided they have the required expertise, manpower and infrastructure for the loan and fall under the B, A, or A+ categories
    • Offices of the National Small Industries Corporation, training centres, technical centres, incubators as well as Training cum Incubation Centres established in PPP Mode
    • MSME Development Institutes, Technical Development Centres and MSME Tool Rooms under the MSME Office of Development Commissioner’s administrative control
    • PMEGP Federation (when formed)
    • Udyami Mitras empaneLled under RGUMY of the Ministry of MSME
    • Financial institutions including every regional rural bank, 27 public sector banks, Small Industries Development Bank of India, Private Sector Scheduled Commercial Banks with the approval of the State Level Task Force Committee headed by the Commissioner (Industries) or the Principal Secretary (Industries)

    Budget and Targets under Prime Minister’s Employment Generation Programme

    Prime Minister’s Employment Generation Programme has received the approval for an outlay of Rs.5,500 crore for three financing years starting from 2017-18 to 2019-20. 2.5 lakh projects are expected to be set up with these funds along with the creation of 20 lakh job opportunities. 1,000 units are also expected to be upgraded every financial year.

    List of Activities not Allowed under PMEGP

    Here are the activities that are not allowed under PMEGP for the purpose of setting up units, projects, or micro enterprises:

    • Businesses or industries associated with meat, that is canning, serving or processing of items
    • Businesses or industries associated with manufacturing or production or sale of intoxicant items such as cigarettes, cigars, beedis, etc.
    • Any dhaba, hotel, or sales outlet engaging in serving alcohol
    • Businesses or industries associated with the tapping of toddy for sale
    • Businesses or industries associated with the production or preparation of tobacco as raw materials
    • Businesses or industries associated with the cultivation of crops
    • Plantations such as coffee, rubber, tea, etc.
    • Sericulture, floriculture, and horticulture
    • Businesses or industries associated with animal husbandry such as piggery, pisciculture, poultry, etc.
    • Businesses or industries associated with the manufacture of polythene bags with thickness of less than 20 microns and manufacture of containers or carry bags made from recycled plastic for packaging, storing, dispensing, or carrying of food stuff or other items that cause environmental problems.

    PMEGP Loan FAQs

    1. Is cost of land included in the project cost? 
    2. No, the cost of land will not be included in the project cost. 

    3. What is the component of the project cost? 
    4. If you belong to the general category, then capital expenditure loan, a cycle of working capital, and 10% of project cost as individual contribution will be the component of the project cost. If you belong to the weaker section, then 5% of project cost will be the component of the project cost. 

    5. How is the cash credit limit utilised? 
    6. The working capital should touch 100% of cash credit limit at least once within 3 years of lock-in period and not less than 75% of the utilisation of the sanction limit. 

    7. Will I have to submit any collateral in order to avail this loan? 
    8. As per the guidelines laid down by RBI, no collateral is required for the cost of project up to Rs.10 lakh. 

    9. Can an entrepreneur submit more than one project? 
    10. No, the entrepreneur cannot submit more than one project. 

    11. What is lock-in period for government subsidy? 
    12. The lock-in period for government subsidy is 3 years. 

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