The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy programme launched by the Indian government in 2008. PMEGP is the result of the combination of two schemes: the Prime Minister’s Rojgar Yojna and the Rural Employment Generation Programme. This initiative aims to create self-employment opportunities in the non-farm sector by assisting unemployed youth and traditional craftspeople in establishing micro-enterprise establishments.
The Prime Minister’s Employment Generation Programme is managed by the Ministry of MSME (PMEGP). The PMEGP Scheme is being implemented at the national level by the Khadi and Village Industries Commission (KVIC). The Scheme is being implemented at the state level through State Khadi and Village Industries Commission Directorates, State Khadi and Village Industries Boards, District Industries Centres, and banks.
Generation Programme
- Creation of long-term and continual self-employment options in the country’s urban and rural locations
- Providing long-term and consistent employment to a significant number of jobless rural and urban youngsters, traditional and future craftspeople, through the establishment of micro-enterprises
- Facilitating financial institution engagement in order to increase credit flow to the micro sector
Eligibility
- Individuals over the age of 18 must pass Standard VIII to work on projects worth more than Rs 5 lakh in the service sector and more than Rs 10 lakh in the manufacturing sector.
- Production-based co-operative societies registered under the Societies Registration Act of 1860
- Self-help organisations and charitable trusts
Features
- The Scheme is implemented through the Khadi and Village Industries Commission, State Khadi and Village Industries Commission Directorates, State Khadi and Village Industries Boards, and District Industries Centres and banks in urban and rural areas in a 30:30:40 ratio between the Khadi and Village Industries Commission, Khadi and Village Industries Boards, and DIC. respectively
- Assistance under the PMEGP is only accessible to newly founded units.
- There is no income limit for establishing projects.
- Existing units or units that are currently receiving any type of government subsidy (State or Central) are ineligible.
- This plan is open to any industry, including coir-based initiatives (excluding those on the negative list).
Areas of operation
According to the Khadi and Village Industries Commission Act 2006 – Scheme, a rural area is defined as any village and includes any town. The population should not exceed 20,000 people or any other quantity specified by the Central Government from time to time. Only District Industries Centres (DIC) are included in the urban area.
Margin
The margin money contribution is 5% of the project cost for special category borrowers and 10% for general category borrowers. Illustration: If Miss Nishitha applies to XYZ bank for a loan of Rs 8 lakh, the bank may only finance 80% of the loan amount (i.e. Rs 6,40,000/-). The remaining 20% (Rs 1,60,000/-) is referred to as margin money, and Nishita must make provisions for it.
Subsidy
General Category: The eligible subsidy is 25% of the project cost in rural areas and 15% in urban areas.
Special Category: The eligible subsidy is 35% of the project cost in rural areas and 25% in urban areas.