The Prime Minister’s Employment Generation Programme (PMEGP) is a flagship scheme launched by the Government of India in 2008. It is administered by the Ministry of Micro, Small, and Medium Enterprises (MSME) and implemented by the Khadi and Village Industries Commission (KVIC) at the national level. PMEGP was introduced to merge two earlier schemes—the Prime Minister’s Rojgar Yojana (PMRY) and the Rural Employment Generation Programme (REGP)—and aims to generate employment opportunities in rural and urban areas through the establishment of new micro-enterprises and self-employment ventures.
The scheme focuses on assisting unemployed youth and traditional artisans to set up new enterprises, particularly in the micro sector, thereby generating job opportunities.
Objectives of PMEGP
The key objectives of PMEGP are:
- Employment Generation: To generate continuous and sustainable employment opportunities in both rural and urban areas of the country.
- Rural Industrialization: To provide sustainable and inclusive development in rural and semi-urban areas by establishing micro-enterprises.
- Promotion of Self-Employment: To promote entrepreneurship among the youth, women, SC/ST communities, OBCs, minorities, ex-servicemen, and physically disabled people by providing financial assistance.
- Traditional Industries Support: To support the traditional artisans in rural areas in transitioning their skills into organized, productive enterprises.
Eligibility Criteria for PMEGP
1. Individuals:
- Age: Must be above 18 years of age.
- Educational Qualification: No minimum qualification is required for projects costing up to ₹10 lakh in the manufacturing sector and up to ₹5 lakh in the service sector. However, for projects costing more than the specified amounts, at least an 8th-grade pass is required.
2. Institutions and Societies:
- Self-help groups (SHGs), institutions registered under Societies Registration Act, cooperative societies, and charitable trusts are also eligible under this scheme, provided they are engaged in production-oriented activities.
3. Other Special Categories:
- Individuals from SC/ST/OBC, women, minorities, ex-servicemen, and physically disabled are given higher subsidies.
4. Ineligible Categories:
- Existing units, units already availing subsidies under state or central government schemes, or those who have availed loans under PMRY, REGP, or any other central or state government subsidy scheme are not eligible for PMEGP benefits.
Financial Assistance and Subsidies under PMEGP
The scheme offers credit-linked subsidies to eligible individuals for setting up micro-enterprises. The project cost varies depending on the sector (manufacturing or service) and geographical location (rural or urban).
- Maximum Project Cost:
- Manufacturing Sector: Up to ₹50 lakh.
- Service Sector: Up to ₹20 lakh.
- Subsidy Pattern:
- The subsidy under PMEGP is provided based on the category of the beneficiary and the location of the project (rural or urban):
- Beneficiaries need to contribute 5%-10% of the project cost from their own funds (10% for general category, 5% for special categories).
Loan and Credit Structure
The remaining 90%-95% of the project cost is provided by the financial institutions in the form of term loans. PMEGP is a credit-linked subsidy scheme, which means that the subsidy will be released only after the bank has sanctioned the full project cost.
The subsidy amount is directly transferred into the bank account of the entrepreneur after the project has been sanctioned by the bank.
Implementing Agencies
PMEGP is implemented at the national and state levels by different organizations:
- National Level: Khadi and Village Industries Commission (KVIC) is the national nodal agency responsible for the scheme’s implementation.
- State Level: At the state level, PMEGP is implemented through three primary agencies:
- State Khadi and Village Industries Boards (KVIBs).
- District Industries Centers (DICs).
- Banks: Including public sector banks, regional rural banks, and cooperative banks, which sanction loans to beneficiaries.
Application Process
1. Application Submission: The PMEGP application can be submitted online through the official PMEGP e-portal.
2. Documents Required:
- Aadhaar card.
- Caste/Community certificate (for SC/ST/OBC/Minorities).
- Special category certificate (if applicable).
- Project report/business plan.
- Proof of educational qualifications (if applicable).
- Other documents as required by the bank.
3. Project Proposal Review: The project proposal is reviewed by the District Level Task Force Committee (DLTFC), which forwards it to banks for sanctioning the loan.
4. Bank Approval: Once the bank approves the loan and the entrepreneur deposits their margin contribution, the subsidy amount is credited to the beneficiary’s loan account.
Key Features of PMEGP
- Wide Coverage: PMEGP applies to all sectors, including manufacturing, service, and agro-based industries, covering both urban and rural areas.
- Employment Generation: The scheme has generated millions of employment opportunities since its inception by promoting micro-enterprises.
- Subsidies and Easy Credit: PMEGP offers generous subsidies and simplifies the credit process, making it easier for entrepreneurs to access loans.
- Focus on Marginalized Sections: It prioritizes marginalized groups like SC/STs, women, and people from rural and backward areas, thus promoting inclusive growth.
- Support for Traditional Artisans: PMEGP helps traditional artisans and craftspeople in rural areas transition their skills into formal businesses.
- Monitoring and Guidance: Entrepreneurs receive ongoing support, including project monitoring and guidance from implementing agencies and banks.
Recent Developments and Updates
- The government has increased the maximum project cost to ₹50 lakh for manufacturing units and ₹20 lakh for service units under the scheme.
- Special provisions for aspirational districts, hilly regions, and Northeast states with higher subsidy rates.
- Enhanced focus on promoting agro-based industries and green businesses such as eco-friendly packaging and renewable energy projects.
Impact of PMEGP
PMEGP has made a significant impact since its launch:
- Employment Generation: The scheme has been instrumental in generating large-scale employment opportunities, particularly in rural areas. By providing financial support to set up micro-enterprises, PMEGP has created more than 79 lakh jobs.
- Promoting Entrepreneurship: It has been successful in promoting self-employment by encouraging youth, women, and artisans to start their businesses.
- Economic Growth: By empowering small entrepreneurs and boosting rural industrialization, PMEGP has contributed to the overall economic development of India, especially in non-farm sectors.
Challenges and Recommendations
While PMEGP has achieved notable success, it faces a few challenges:
- High Non-Performing Assets (NPAs): Some loans disbursed under PMEGP have turned into NPAs due to lack of business knowledge or market challenges faced by entrepreneurs.
- Awareness: Many potential beneficiaries, especially in rural areas, are still unaware of the scheme and its benefits.
- Skill Development: There is a need for improved training and skill development programs to help new entrepreneurs manage their businesses better.
Recommendations:
- Strengthen skill development and mentoring programs to reduce failure rates of new businesses.
- Increase awareness campaigns in remote areas to ensure more people can benefit from the scheme.
- Implement a more robust monitoring system to track the progress of sanctioned projects and prevent NPAs.
Conclusion
The Prime Minister’s Employment Generation Programme (PMEGP) plays a vital role in driving entrepreneurship and self-employment, especially among the economically weaker sections of society. By offering financial support, subsidies, and skill development, the scheme has contributed significantly to the economic development of rural and urban areas across India. With ongoing enhancements and greater outreach, PMEGP can continue to create more opportunities for micro-entrepreneurs, further empowering individuals and boosting the nation’s economy.
Here’s the Prime Minister’s Employment Generation Programme (PMEGP) information presented in a tabular format:
| Aspect | Details |
|---|---|
| Scheme Name | Prime Minister’s Employment Generation Programme (PMEGP) |
| Launched By | Ministry of Micro, Small, and Medium Enterprises (MSME), Government of India |
| Implemented By | Khadi and Village Industries Commission (KVIC) at the national level |
| Objective | – Generate employment through micro-enterprise creation |
| – Promote rural and urban industrialization | |
| – Support self-employment and traditional artisans | |
| – Encourage entrepreneurship among women, SC/ST, minorities, and youth | |
| Eligibility Criteria | – Individuals: Must be above 18 years of age |
| – Educational Qualification: No minimum qualification for projects below ₹10 lakh (manufacturing) and ₹5 lakh (services); 8th-grade pass required for higher-cost projects | |
| – Special Categories: SC/ST/OBC/Minorities, women, ex-servicemen, and physically disabled people given preference | |
| – Other Eligible Entities: Self-help groups (SHGs), registered societies, cooperative societies, charitable trusts | |
| Ineligible Applicants | – Existing units and those who have availed loans under PMRY, REGP, or other subsidy schemes |
| Maximum Project Cost | – Manufacturing Sector: Up to ₹50 lakh |
| – Service Sector: Up to ₹20 lakh | |
| Subsidy Pattern | – Urban Areas: 15% for general category, 25% for special categories |
| – Rural Areas: 25% for general category, 35% for special categories | |
| Beneficiary’s Contribution | – 10% of the project cost for general category |
| – 5% for special categories | |
| Loan/Financial Assistance | – 90%-95% of project cost covered through term loans from banks |
| – Subsidy provided by the government after project approval | |
| Implementing Agencies | – National Level: Khadi and Village Industries Commission (KVIC) |
| – State Level: State KVIBs, District Industries Centers (DICs), and Banks | |
| Application Process | – Apply online through PMEGP e-portal |
| – Submit required documents (Aadhaar, caste certificate, project report, etc.) | |
| – Project reviewed by District Level Task Force Committee (DLTFC) | |
| – Bank sanctions loan after project approval | |
| Subsidy Disbursement | – Subsidy is credited directly to the bank loan account after project sanction |
| Recent Updates | – Increased project cost limits: ₹50 lakh for manufacturing and ₹20 lakh for services |
| – Higher subsidies for aspirational districts, hilly regions, and Northeastern states | |
| – Support for agro-based and green businesses | |
| Impact | – Generated millions of jobs in rural and urban areas |
| – Empowered marginalized communities and traditional artisans | |
| – Promoted rural industrialization and entrepreneurship | |
| Challenges | – High non-performing assets (NPAs) due to lack of business skills |
| – Limited awareness about the scheme in remote areas | |
| – Need for stronger skill development and mentorship programs | |
| Recommendations | – Enhanced training and mentorship for new entrepreneurs |
| – Improved awareness campaigns in rural and remote areas | |
| – Better monitoring of project progress and performance | |
| Conclusion | PMEGP is a crucial initiative that promotes self-employment, generates jobs, and boosts rural and urban economies. With greater outreach and support, it can continue to transform India’s micro-enterprise sector. |
This table provides a detailed and structured overview of the PMEGP scheme, covering all key aspects, benefits, and challenges.
