Prime Minister’s Employment Generation Programme, PMEGP – Credit-linked subsidy programme

Prime Minister’s Employment Generation Programme

The Government of India has allowed the introduction of a new credit linked subsidy program called Prime Minister’s Employment Generation Programme (PMEGP).  PMEGP formed by joining the two schemes that were in operation till 31.03.2008 namely Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) for the generation of employment chances through the establishment of micro enterprises in rural as well as in urban areas. PMEGP scheme will be a central sector scheme to be administered by the Ministry of Micro, Small & Medium Enterprises (MoMSME).

The Prime Minister’s Employment Generation Programme, PMEGP looks to create more than four lakh jobs in the expected fiscal – 2016-17. PMEGP had been announced in 2000 and formally launched during the financial year 2008-09. The Ministry of Micro, Small and Medium Enterprises (MoMSME) administers the program and the Khadi, and Village Industries Commission (KVIC) implements it. The KVIC Directorates are responsible for managing the program at the state level.

Objectives of the PMEGP Scheme

  • To generate consecutively and sustainable employment chances in Rural and Urban areas of the country.
  • To facilitate the participation of financial institutions for higher credit flow to a micro sector.
  • To provide continuous and sustainable employment to a large segment of traditional and prospective artisans, rural and unemployed urban youth in the country through setting up of micro enterprises.

Eligibility of PM’s Employment Generation Programme

  • Individuals above 18 years of age.
  • VIII Std. Pass required for the project above Rs.10.00 lakhs in manufacturing and above Rs. 5.00 lakhs for Service Sector.
  • Self Help Groups and Charitable Trusts.
  • Institutions Registered under Societies Registration Act- 1860.
  • Production based Co-operative Societies.

Prime Ministers Employment Generation Programme, PMEGP   Credit linked subsidy programme

Key Features of PM Employment Generation Program

  • No income cover for setting up of projects.
  • Assistance under the program is available only to new units to be established.
  • The PMEGP Scheme is implemented through KVIC and State/UT Khadi & V.I. Boards in Rural areas and through District Industries Centres in Urban and Rural areas in the ratio of 30:30:40 between KVIC / KVIB / DIC respectively.
  • Any enterprise including Coir Based projects excluding those mentioned in the negative list.
  • Existing units or units already availed under any Govt. Subsidy either under State/Central Govt. Schemes are not eligible.
  • Per capita investment should not exceed Rs. 1.00 lakhs in common areas and Rs. 1.50 lakhs in Hilly areas.
  • The Maximum project cost of Rs. 25.00 lakhs in manufacturing sector & Rs. 10.00 lakhs in Service Sector.

Categories of beneficiaries under PMEGP

PMEGP Category beneficiariesBeneficiary’s contribution (of project cost)Rate of Subsidy
General Category10%15%25%
Special (including SC/ST/OBC /Minorities/ Women, Ex-Servicemen, Physically handicapped, NER, Hill and Border areas, etc.)05%25%35%

Indicative Sectors of PMEGP Program

  1. Agro-based food processing industries.
  2. Polymer and chemical-based industries.
  3. Forest-based industries.
  4. Rural engineering and biotech industries.
  5. Handmade paper and fiber industries.
  6. Service and textile industries.
  7. Mineral-based industries.
  8. Application procedure.