PMEGP Scheme (Prime Minister’s Employment Generation Programme)

Overview

Launched in August 2008, the Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme under the Ministry of Micro, Small, and Medium Enterprises (MSME). PMEGP aims to create employment opportunities by establishing micro-enterprises in both rural and urban areas.

This scheme merges two earlier initiatives—Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP)—and focuses on generating sustainable self-employment at a local level.

Eligibility Criteria

For New Enterprises

  • Any individual above 18 years of age.
  • No income ceiling for assistance.
  • For projects costing over ₹10 lakh in manufacturing or ₹5 lakh in service/business, the applicant must have at least an eighth-grade education.

For Upgrading Existing Units

  • Must have successfully adjusted the first PMEGP subsidy after three years.
  • The unit should have a good profit record and show potential for further growth.

Loan Details

Loan Amount: Up to ₹50 lakh (manufacturing sector) and ₹20 lakh (service sector)

Subsidy: Up to 35% of the project cost, based on location and applicant category

Interest Rate: As per RBI guidelines, typically 11–12%

Repayment Tenure: 3–7 years including moratorium

Margin Money: 5–10% of the project cost to be contributed by the applicant

Benefits

  • Margin Money Subsidy: Financial assistance to set up new enterprises and upgrade existing units.
  • Subsidy rates depend on the location (urban/rural) and category of beneficiary (general or special).
  • Backward and Forward Linkages: Funds allocated for awareness campaigns, training programs, exhibitions, and IT infrastructure development.
  • Support for setting up Entrepreneurship Facilitation Centres and Centers of Excellence.
  • Upgradation Support: Financial assistance available for existing PMEGP, REGP, or MUDRA units to modernize or expand operations.