Prime Minister's Employment Generation Programme (PMEGP)

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Prime Minister's Employment Generation Programme (PMEGP)

A central sector scheme for setting up new self-employment ventures and micro enterprises in rural and urban areas.

Overview

PMEGP is a central sector scheme being administered by the Ministry of Micro, Small and Medium Enterprises (Mo MSME). The scheme is being implemented by Khadi and Village Industries Commission (KVIC), a statutory organization under the administrative control of the Ministry of MSME as the single nodal agency at the National level. At the State level, the scheme is implemented through State offices of KVIC, State Khadi and Village Industries Boards (KVIBs), District Industries Centres (DICs), Coir Board (for coir related activities) and Banks.

Objectives

To generate employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures/projects/micro enterprises.

To bring together widely dispersed traditional artisans, rural and urban unemployed youth and give them self-employment opportunities to the extent possible, at their place.

To increase the wage-earning capacity of workers and artisans and contribute to increase in the growth rate of rural and urban employment.

Target Group

The participants are mainly the unemployed youths, students of universities, educational institutions, technical institutions, skilled and unskilled artisans comprising of all categories of the society. Special focus should be explored for the target group such as SC/ST, OBC, transgender, women, ex-servicemen etc. during the awareness camps.

Identification of Beneficiaries

The applicants, who have already undergone training of at least 10 Days (for offline mode)/ 60 hours (for online mode) under Entrepreneurship Development Programme (EDP) / Skill Development Programme (SDP) / Entrepreneurship cum Skill Development Programme (ESDP) or Vocational Training (VT) need not undergo EDP training again.

Eligibility Criteria

Any individual, above 18 years of age.

There will be no income ceiling for assistance for setting up projects under PMEGP.

The beneficiaries should possess at least VIII standard pass educational qualification.

Assistance under the scheme is available only for new projects sanctioned specifically under the PMEGP.

Existing units (under PMRY, REGP or any other scheme of Government of India or State Government) and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are not eligible.

Only one person from one family is eligible for obtaining financial assistance for setting up of projects under PMEGP. The family includes self and spouse.

Quantum of Loan and Repayment

For setting up of project costing above Rs.10 lakhs in the Manufacturing sector and above Rs. 5 lakhs in the Business /Service sector.

Repayment schedule may range between 3 to 7 years after an initial moratorium as may be prescribed by the concerned bank/financial institution.

Margin Money Subsidy For New Micro Enterprise Units

Category	Beneficiary Contribution	Urban Subsidy	Rural Subsidy
General Category	10%	15%	25%
Special Category (including SC, ST, OBC, Minorities, Women, Ex-Servicemen, Transgenders, Differently abled, NER, Aspirational Districts, Hill and Border areas)	5%	25%	35%

Project Cost Conditions

For setting up of project costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business /service sector, the beneficiaries should possess at least VIII standard pass educational qualification.

The maximum cost of the project/unit admissible for Margin Money subsidy under manufacturing sector is Rs. 50 lakhs.

The maximum cost of the project/unit admissible for Margin Money subsidy under Business/Service sector is Rs. 20 lakhs.

The balance amount (excluding the own contribution) of the total project cost will be provided by Banks.

If the total project cost exceeds Rs. 50 lakhs or Rs. 20 lakhs for Manufacturing and Service/Business sector respectively, the balance amount may be provided by Banks without any Government subsidy.

Loan For Upgradation Of Existing Units

All categories: Beneficiary contribution 10%, Rate of Subsidy 15% (20% in NER and Hill States).

The maximum cost of the project/unit admissible for Margin Money subsidy under manufacturing sector for upgradation is Rs. 1.00 crore. Maximum subsidy would be Rs.15 lakh.

The maximum cost of the project/unit admissible for Margin Money subsidy under Business/Service sector for upgradation is Rs. 25 lakh. Maximum subsidy would be Rs.3.75 lakh.

The balance amount (excluding the own contribution) of the total project cost will be provided by Banks.

If the total project cost exceeds Rs. 1.00 crore or Rs. 25.00 lakhs for Manufacturing and Service/Business sector respectively, the balance amount may be provided by banks without any Government subsidy.

Eligibility For Up-gradation Of Existing PMEGP Units

Margin Money (subsidy) claimed under PMEGP has to be successfully adjusted on the completion of lock in period of 3 years.

First loan under PMEGP/REGP/MUDRA has to be successfully repaid in stipulated time.

The unit is profit making with good turnover and having potential for further growth in turnover and profit with modernization/upgrading the technology.

Role of Financial Institutions and Bank Finance

All Public Sector Banks.

All Regional Rural Banks, Co-operative Banks, Private Sector Scheduled Commercial Banks regulated by RBI.

Small Industries Development Bank of India (SIDBI).

The Bank will sanction 90% of the project cost in case of General Category of beneficiary and 95% in case of Special Category of the beneficiary and disburse full amount suitably for setting up of the project.

Bank will finance Capital Expenditure in the form of Term Loan and Working Capital in the form of cash credit. Project can also be financed in the form of composite loan consisting of Capital Expenditure and Working Capital.

Maximum project cost under PMEGP is Rs. 50 lakh, which includes Term Loan for Capital Expenditure and Working Capital.

For Manufacturing units, Working Capital component should not be more than 40% of the project cost and for units under Service/Trading sector, the Working Capital shall not be more than 60% of the project cost.

Procedure For Claiming Subsidy For PMEGP (Online Portal)

Registration of applications through online portal.

Task Force Committee - screen the applications and forward recommended applications to Banks.

Pre-sanction activities and documentation by Banks.

Sanction of Bank Loan and Sanctioned Amount (90-95%) in Online Portal.

EDP Training (online/ offline) for sanctioned applicants.

Deposit of Margin money by the applicants. The same to be updated by Banks in Online Portal.

Loan disbursement (including Subsidy Amount) by banks and update the same in the Online Portal.

Upload EDP Training Certificate and Loan account Statement in the Online Portal.

Claim Subsidy in the Online Portal (check for registered Bank A/C No.)

Subsidy will be credited directly to the registered Bank A/C No.

On receipt of Subsidy, separate TDR Account for each beneficiary is to be opened for 3 years and deposit the subsidy amount in that account.

ROI should not be charged for the margin money and subsidy.

After completion of 3 years, subsidy amount to be adjusted against the loan.

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