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Prime Minister Employment Generation Programme, The government of India introduced Prime Minister Employment Generation Programme in 2008. Prime Minister Employment Generation Programme (PMEGP) is a credit-linked subsidy programme executed by the Khadi and Village Industries Commission (KVIC) as the nodal agency at the National level.
Prime Minister Employment Generation Programme is a union of Rural Employment Generation Programme and Prime Minister’s Rojgar Yojana. PMEGP programme generates self-employment opportunities in the non-farm sectors through micro-enterprise organizations. This programme helps unemployed youth and traditional crafters.
Prime Minister Employment Generation Programme is administrated by the Ministry of Micro, Small & Medium Enterprises (MSME). State Khadi and Village Industries Commission Directorates, State Khadi and Village Industries Boards, and District Industries Centres and banks implement the Scheme at the State level.
Prime Minister Employment Generation Programme Objectives:
- The main objective of PMEGP is to generate sustainable and constant employment opportunities for the youth in urban and rural areas of the country.
- Through the establishment of micro-enterprises, creating sustained and continuous employment for a large segment of rural and urban unemployed youths, traditional artisans, and prospective entrepreneurs.
- To reduce the financial organisation’s participation for higher credit flow to the micro sector.
Prime Minister Employment Generation Programme Apply Online:
Step 1: Visit the Prime Minister Employment Generation Programme official website
Step 2: Click on ‘PMEGP‘
Step 3: Then click on ‘PMEGP Portal’
Step 4: Then click on ‘Online Application Form for Individual’, the application form will be displayed
Step 5: Read PMEGP guidelines and fill in the form with the valid information
How does PMEGP work?
In addition to financing capital expenditures with term loans, banks can also provide working capital in the form of cash credit. They can also lend capital expenditures and working capital together in composite loans.
The bank credit will be varying between 60-75% of the cost after subtracting (Margin Money) sponsorship and the owner’s assistance.
Margin Money is a form of loan that is paid to banks according to the projections of capital expenditure in the project report but is available only on the actual amount of capital expenditure, and the excess amount is to be refunded to KVIC if there is any.
As part of the working capital component, it should be operated in such a manner that at some point the total cash credit limit should reach 100% within three years of the margin money lock-in period, and no less than 75% utilization should be achieved.
PMEGP Eligibility:
- Individuals with the age of 18 years or more
- Passing standard VIII is essential for a project above Rs 5 lakh in the service sector
- Passing standard VIII is essential for a project above Rs 10 lakh in the manufacturing sector
- Institutions registered under Societies Registration Act- 1860
- Production-based co-operative societies can apply
- Self-help groups and charitable trusts can apply
Prime Minister Employment Generation Programme Features:
The Scheme is executed in Urban and Rural Areas via Khadi and Village Industries Commission, State Khadi and Village Industries Commission Directorates, State Khadi and Village Industries Boards, and District Industries Centres and banks.
- Only new established units will get assistance under the PMEGP
- There is no income ceiling for setting up projects
- Units that are already availing any government subsidy (State or Central) or existing units are not eligible to apply for the scheme
- An industry including coir based projects can take benefit of this scheme
- Under the PMEGP scheme, the per capita investment should not exceed Rs 1 lakh in plain areas and Rs 1.5 lakh in hilly areas
- The maximum project cost limit for the service sector is Rs 10 lakh and Rs 25 lakh for the manufacturing sector
Nature of Assistance:
Levels of funding under PMEGP:
| Categories of Beneficiary’s under PMEGP | Beneficiaries contribution (of project cost) | Rate of subsidy (of project cost) | |
| Area (location of the project) | Urban | Rural | |
| GENERAL CATEGORY | 10% | 15% | 25% |
| Special (including SC /ST/ OBC/ Minorities/ Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas, etc.) | 5% | 25% | 35% |
The balance amount of the total project cost will be provided as term loans and working capital by the banks.
The rate of Interest and Repayment Schedule:
The normal interest rate is applicable to the enterprise from time to time. The Repayment Schedule ranges from 3 -7 years.
Security:
No collateral security or any third-party guarantee is demanded here. Any investments created from the bank loan should be hypothecated to Bank.
Nodal Agency:
At the national level, KVIC is the nodal agency. The scheme will be implemented through Khadi and Village Industries Commission, Khadi and Village Industries Boards, and DIC in both rural and urban areas.
Training:
The training period of 2 weeks is compulsory for all the beneficiaries.
PM Employment Generation Programme Benefits:
- By getting rated by independent, renowned, and professional rating agencies empanelled with NSIC, MSMEs are able to upgrade their competence in terms of business and technologies.
- Meanwhile, MSMEs who become part of the Performance and Credit Rating Scheme have the liberty of getting rated by any of the rating agencies of their choice.
- The rating process increases the creditability of MSMEs, which can give them timely credit from banks at a liberal interest rate.