PMEGP Loan Scheme and Eligibility

Empow­er­ing Employ­ment and Entre­pre­neur­ship: Prime Min­is­ter’s Employ­ment Gen­er­a­tion Pro­gramme (PMEGP)

The Gov­ern­ment of India has tak­en a sig­nif­i­cant step towards fos­ter­ing employ­ment oppor­tu­ni­ties and entre­pre­neur­ship by intro­duc­ing the Prime Min­is­ter’s Employ­ment Gen­er­a­tion Pro­gramme (PMEGP). This ini­tia­tive merges two pre­vi­ous­ly oper­a­tional schemes, the Prime Min­is­ter’s Roj­gar Yojana (PMRY) and the Rur­al Employ­ment Gen­er­a­tion Pro­gramme (REGP), with the aim of gen­er­at­ing employ­ment across both rur­al and urban areas through the estab­lish­ment of micro enterprises.

PMEGP oper­ates as a cen­tral sec­tor scheme under the admin­is­tra­tion of the Min­istry of Micro, Small and Medi­um Enter­pris­es (MoMSME). The Kha­di and Vil­lage Indus­tries Com­mis­sion (KVIC), a statu­to­ry orga­ni­za­tion under the admin­is­tra­tive con­trol of the Min­istry of MSME, acts as the sin­gle nodal agency at the nation­al lev­el. The imple­men­ta­tion of the scheme takes place at var­i­ous lev­els, involv­ing State KVIC Direc­torates, State Kha­di and Vil­lage Indus­tries Boards (KVIBs), Dis­trict Indus­tries Cen­tres (DICs), and banks.

The scheme envi­sions pro­vid­ing gov­ern­ment sub­si­dies to ben­e­fi­cia­ries and entre­pre­neurs through iden­ti­fied banks. Var­i­ous imple­ment­ing agen­cies, includ­ing KVIC, KVIBs, and DICs, col­lab­o­rate with Non-Gov­ern­ment Orga­ni­za­tions (NGOs), autonomous insti­tu­tions, Self Help Groups (SHGs), and oth­er rel­e­vant bod­ies to facil­i­tate the iden­ti­fi­ca­tion of ben­e­fi­cia­ries and the devel­op­ment of viable projects. These agen­cies also play a cru­cial role in pro­vid­ing train­ing in entre­pre­neur­ship development.

Objec­tives of PMEGP:

The key objec­tives of PMEGP are as follows:

1. Gen­er­at­ing Employ­ment Oppor­tu­ni­ties: PMEGP aims to cre­ate employ­ment oppor­tu­ni­ties in both rur­al and urban areas by estab­lish­ing new self-employ­ment ven­tures, projects, and micro enterprises.
2. Empow­er­ing Tra­di­tion­al Arti­sans and Unem­ployed Youth: The pro­gram seeks to bring togeth­er tra­di­tion­al arti­sans and unem­ployed youth, pro­vid­ing them with self-employ­ment oppor­tu­ni­ties in their respec­tive regions.
3. Pre­vent­ing Rur­al-Urban Migra­tion: By offer­ing con­tin­u­ous and sus­tain­able employ­ment to tra­di­tion­al arti­sans and unem­ployed youth, the scheme aims to curb the migra­tion of rur­al youth to urban areas.
4. Enhanc­ing Wage Earn­ing Capac­i­ty: PMEGP aims to increase the wage earn­ing capac­i­ty of arti­sans, con­tribut­ing to the growth rate of rur­al and urban employment.

Finan­cial Assis­tance under PMEGP:

The pro­gram offers dif­fer­ent lev­els of fund­ing based on the cat­e­go­ry of ben­e­fi­cia­ries and their project location:

• For the gen­er­al cat­e­go­ry, the sub­sidy rates range from 10% to 25%.
• Spe­cial cat­e­gories, includ­ing SC/ST/OBC/Mi­nori­ties/­Wom­en/Ex-ser­vice­men/­Phys­i­cal­ly hand­i­capped, receive sub­si­dies rang­ing from 5% to 35%.

The project cost eli­gi­ble for fund­ing varies depend­ing on whether it falls under the man­u­fac­tur­ing sec­tor (up to Rs. 25 lakh) or the business/service sec­tor (up to Rs. 10 lakh).

Eli­gi­bil­i­ty Conditions:

To be eli­gi­ble for assis­tance under PMEGP, ben­e­fi­cia­ries must ful­fill the fol­low­ing conditions:

• Indi­vid­u­als above 18 years of age.
• No income ceil­ing for assistance.
• Edu­ca­tion­al qual­i­fi­ca­tion require­ments for projects cost­ing above cer­tain thresholds.
• Assis­tance avail­able only for new projects sanc­tioned specif­i­cal­ly under PMEGP.
• Self Help Groups, reg­is­tered insti­tu­tions, pro­duc­tion co-oper­a­tive soci­eties, and char­i­ta­ble trusts are eligible.
• Exist­ing units under pre­vi­ous schemes are not eligible.

Bank Finance and Repayment:

Banks sanc­tion 90% to 95% of the project cost for gen­er­al and spe­cial cat­e­go­ry ben­e­fi­cia­ries respec­tive­ly. The financ­ing includes cap­i­tal expen­di­ture and work­ing cap­i­tal in the form of term loan or cash cred­it. The rate of inter­est and repay­ment sched­ule depend on the con­cerned bank/financial insti­tu­tion. RBI issues guide­lines to pri­or­i­tize PMEGP projects and spec­i­fies exclud­ed banks.

Phys­i­cal Ver­i­fi­ca­tion and Neg­a­tive List:

PMEGP units under­go 100% phys­i­cal ver­i­fi­ca­tion by KVIC, ensur­ing the estab­lish­ment and work­ing sta­tus of each unit. The scheme also main­tains a neg­a­tive list of activ­i­ties that are not eli­gi­ble, includ­ing cer­tain indus­tries relat­ed to meat pro­cess­ing, intox­i­cant items, cer­tain plan­ta­tions, and envi­ron­men­tal­ly harm­ful activities.

Con­clu­sion:

The Prime Min­is­ter’s Employ­ment Gen­er­a­tion Pro­gramme (PMEGP) stands as a com­pre­hen­sive ini­tia­tive to empow­er indi­vid­u­als, pro­mote entre­pre­neur­ship, and address unem­ploy­ment chal­lenges in both rur­al and urban areas. By merg­ing two suc­cess­ful schemes and pro­vid­ing finan­cial assis­tance and guid­ance, PMEGP con­tributes to sus­tain­able eco­nom­ic growth, increased employ­ment oppor­tu­ni­ties, and enhanced skill devel­op­ment, ulti­mate­ly shap­ing a more resilient and self-reliant India.