Prime Minister Employment Generation Program (PMEGP)

Background

Government of India has approved the introduction of a new credit linked subsidy programme called Prime Minister’s Employment Generation Programme (PMEGP) by merging the two schemes that were in operation till 31.03.2008, namely Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas.
The Government subsidy under the Scheme will be routed by KVIC through the identified Banks for eventual distribution to the beneficiaries / entrepreneurs in their Bank accounts.
The Implementing Agencies, namely KVIC, KVIBs and DICs will associate reputed Non Government Organization (NGOs)/reputed autonomous institutions/Self Help Groups (SHGs) / National Small Industries Corporation (NSIC) / Udyami Mitras empanelled under Rajiv Gandhi Udyami Mitra Yojana (RGUMY), Panchayati Raj institutions and other relevant bodies in the implementation of the Scheme, especially in the area of identification of beneficiaries, of area specific viable projects, and providing training in entrepreneurship development.

About Prime Minister’s Employment Generation Programme

PMEGP is a central sector scheme administered by the Ministry of Micro, Small and Medium Enterprises (MoMSME).
Launched in 2008-09, it is a credit-linked subsidy scheme which promotes self-employment through setting up of micro-enterprises, where subsidy up to 35% is provided by the Government through Ministry of MSME for loans up to ₹25 lakhs in manufacturing and ₹10 lakhs in the service sector.

Objectives

To generate continuous and sustainable employment opportunities in Rural and Urban areas of the country
To provide continuous and sustainable employment to a large segment of traditional and prospective artisans, rural and urban unemployed youth in the country through setting up of micro enterprises.
To facilitate participation of financial institutions for higher credit flow to micro sector.

Eligibility

Any individual above 18 years of age, Self Help Groups, Institutions registered under Societies Registration Act 1860, Production Co-operative Societies and Charitable Trusts are eligible.
Existing Units and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are not eligible.
Only new projects are considered for sanction under PMEGP.

Salient features of the scheme

The Scheme is implemented through KVIC and State/UT Khadi & V.I. Boards in Rural areas and through District Industries Centres in Urban and Rural areas in ratio of 30:30:40 between KVIC / KVIB / DIC respectively.
No income ceiling for setting up of projects.
Assistance under the Scheme is available only to new units to be established.
Existing units or units already availed any Govt. Subsidy either under State/Central Govt. Schemes are not eligible.
Any industry including Coir Based projects excluding those mentioned in the negative list.
Per capita investment should not exceed Rs. 1.00 lakhs in plain areas and Rs. 1.50 lakhs in Hilly areas.
Maximum project cost of Rs. 25.00 lakhs in manufacturing sector and Rs. 10.00 lakhs in Service Sector.
Area of Operation
Rural Area as declared under KVIC Act 2006 – Scheme to be implemented by KVIC, KVIB and DIC (“Rural Area” means the area comprised in any Village and includes the area comprised in any town, the population of which does not exceed twenty thousand or such other figure as the Central Government may specify from time to time as declared under KVIC Act 2006)
Urban area – Only District Industries Centres (DIC)

Negative list of activities

Industry / Business connected with productions / processing / sale of meat or intoxicant items like Beedi / Pan / Cigar / Cigarette etc.
Industry / Business connected with cultivation, sericulture, horticulture, floriculture.
Manufacture of Polythene carry bags of less than 20 microns / containers of recycled plastic.
Processing of Pashmina Wool and products involving hand spinning and hand weaving coming under purview of Khadi Certification Rule.
Rural Transport (except Auto rickshaw, House boat, tourist boat in A & N Islands and except house boat, Shikara & Tourist Boats in Jammu & Kashmir and Cycle Rickshaw.)
CNG Auto Rickshaw will be allowed only in A & N Islands and NER with the approval of Chief Secretary of the State on merit.

Implementation:

National Level- Khadi and Village Industries Commission (KVIC) as the nodal agency.
State Level- State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs), District Industries Centres (DICs) and banks.