PMEGP Scheme (Prime Minister’s Employment Generation Programme)
▪️ What is PMEGP
Credit-linked subsidy scheme of Government of India implemented through KVIC, KVIB, and District Industries Centre (DIC) to support new micro-enterprises.
▪️ Objective
To generate employment by helping individuals establish new manufacturing and service businesses in rural and urban areas.
▪️ Implementing Authorities
Nodal Agency (National Level)
Khadi and Village Industries Commission (KVIC)
State Level Agencies
KVIC / KVIB / District Industries Centre (DIC)
Financing Authority
Public Sector Banks, RRBs, Cooperative Banks, and approved private banks
▪️ Subsidy (Margin Money)
General Category
15% (Urban) and 25% (Rural)
Special Category (SC/ST/OBC/Women/Minority etc.)
25% (Urban) and 35% (Rural)
▪️ Own Contribution
General Category
Minimum 10% of project cost
Special Category
Minimum 5% of project cost
▪️ Project Cost Limit
Manufacturing Sector
Up to ₹50 Lakhs
Service Sector
Up to ₹20 Lakhs
▪️ Loan Structure
Bank provides Term Loan + Working Capital, and subsidy is kept as margin money (TDR) and adjusted after lock-in period.
▪️ Eligibility
Age Criteria
Applicant must be 18 years or above
Project Type
Only new business units are allowed
Education Condition
Minimum 8th pass required if project cost exceeds ₹10L (manufacturing) or ₹5L (service)
Other Conditions
- Existing businesses are not eligible
- Projects must involve capital expenditure
- Land cost is not included in project cost
▪️ Eligible Applicants
- Individuals
- Self Help Groups (SHGs)
- Trusts / Societies
- Co-operative Institutions
▪️ Documents Required
- PAN
- Adhar
- Phone Number
- Mail ID
- Passport Size Photo
- Project Report
- Caste Certificate
- Rural Area Certificate
- Special Category Certificate, if applicable
- Education & EDP Certificates
- Leaving certificate / Birth certificate / Domicile
- Undertaking Form
▪️ Application Process
Online Application
Apply through official PMEGP portal
Agency Selection
Choose KVIC / KVIB / DIC as implementing agency
Scrutiny Stage
Application is verified by District Level Task Force Committee (DLTFC)
Bank Processing
Forwarded to bank for loan appraisal and sanction
EDP Training
Entrepreneurship Development Programme (mandatory before subsidy release)
Subsidy Release
Margin money is kept in deposit and adjusted after 3 years of successful operation
▪️ Collateral Rules
No collateral required for loans up to ₹10 Lakhs as per RBI guidelines
Above that, loans are generally covered under CGTMSE guarantee
▪️ Important Conditions
New Unit Mandatory
Only first-time business projects are eligible
Subsidy Lock-in
Subsidy is adjusted after 3 years, not upfront
Udyam Registration
Mandatory before final subsidy adjustment
Negative List Applies
Certain activities are not allowed under the scheme
▪️ Type of Activities Allowed
Manufacturing, service, village industries, and certain trading activities (restricted cases)
▪️ Practical Insight
Project Report is Critical
Loan approval depends heavily on DPR viability
Bank Decision Matters
Final sanction depends on bank appraisal, not just scheme eligibility
Time Frame
Approval and subsidy process may take time due to multi-level verification
Disclaimer: Above contents are for general information purpose only, and we do not assure correctness and completeness of all the information. You are requested to contact our customer service executives for latest updates and information.
