January 31, 2023
Pragati Pandey

Prime Minister Employment Generation Programme (PMEGP)

The Prime Minister's Employment Generation Programme, or PMEGP, began on March 31, 2008, when the previous PMRY (Prime Minister Rozgar Yojana) and REGP merged (Rural Employment Generation Programme). In order to focus on a coordinated attempt to motivate young people to start microenterprises in both the rural and urban sections of the nation, it was decided to unite the two programmes with related objectives. The administrative oversight of the programme is vested in the Ministry of MSME (Micro Small and Medium Enterprises), Government of India.

The Prime Minister's Employment Generation Programme (PMEGP) will now run for a further five years, through FY26, with approval from the Ministry of Micro, Small, and Medium Enterprises.

With a budget of Rs 13,554.42 crore, the PMEGP will now be extended for another five years, from 2021–2025, during the 15th Finance Commission Cycle.


In 2008, the Indian administration offered the go-ahead for the implementation of the Prime Minister's Employment Generation Programme (PMEGP), a credit-linked subsidy programme designed to create jobs in both urban and rural areas.

It enables business owners to build facilities or units.


The Ministry of Micro, Small, and Medium Enterprises is in charge of managing this central sector programme (MoMSME).

Khadi and Village Industries Commission (KVIC), a constitutional entity under the administrative supervision of the Ministry of MSME, is the implementing agency at the national level.

The PMEGP is being carried out by the KVIC (Khadi and Village Industries Commission) at the national level, its directorates and boards at the state level, and DIC at the district level.. It is largely a credit-linked subsidy offered to promote economic growth among the nation's youth by encouraging them to engage in manufacturing and service-related businesses by establishing new companies. It is essential to go into the PMEGP scheme specifics in greater detail in order to fully understand the scheme's complexities.

PMEGP Loan Scheme Features:

The PMEGP loan program's fundamental tenet is to extend financing in the form of subsidies for starting a microbusiness in order to make the project financially viable. The following characteristics distinguish this crucial venture:


Combining PMEGP KVIC's four-fold, which include the following, is its main goal.

to create new micro-enterprise ventures that will provide employment possibilities in both urban and rural locations.

by combining efforts with the nation's numerous craftspeople and unemployed youth to find self-employment opportunities.

By supporting traditional occupations year-round, you can stop rural youngsters from moving to metropolitan areas in pursuit of lasting employment.

to increase traditional craftsmen' incomes in rural areas by giving them access to self-employment opportunities.

The PMEGP rules, which fall under the general formula that is applicable to MSME, set quantity constraints in the following manner:

Manufacturer: Rs.25 lakhs maximum.

Services: Rs.10 lakhs maximum.

Self-Investment: It is determined depending on the location of the enterprise.

Plains: Maximum Rs.1 lakh.

Hills: Maximum Rs.1.5 lakhs

Specifications of the PMEGP loan:

The following breakdown of the basic characteristic provides a complete view of the funding made for the PMEGP application:

1. Persons who fall under the defined group also entail women, physically challenged people, former members of the defense services, people from the North East, and people from border regions.

2. The banks offer a term loan to fill the funding gap.

3. PMEGP Loan Tenure: The Term loan has a three- to seven-year payback term. The banks have consistently prolonged the embargo period for six months.

4. Allocation Ratio: The PMEGP loan's proportionate allocation follows the manner shown below:

5. The incentive, which is based on the borrower's capital investment, is regarded as margin cash. Any leftovers are given back to KVIC.

Eligibility Criteria for PMEGP Loan:

1. People and organizations are eligible for the lending option if they fulfill the criteria for PMEGP application eligibility.

2. The person must be older than 18 years old.

3. People must have passed the school's class VIII exams.

4. The project's size for people must adhere to the following standards:

5. Maker: More than Rs. 10 lakhs.

6. Over Rs. 5 lakh in service.

7. If self-help organizations have not previously utilized any other plan benefits, they are eligible.

8. Licensed Organizations

9. Partnerships for charities; and

10. Cooperative societies are active in the production industry.

11. There is no upper limit on income for those who qualify for the loan.

12. Only new businesses and those that have not previously benefited from comparable programmes are eligible for the lending facility.

List of eligible activities: Any operations that have been officially allowed may use the loan; activities that are on the "negative list" cannot.

Accepted List:

Food processing as long as it is agricultural.

manufacturing of handmade paper and fiber.

Forests, minerals, chemicals, and polymers are sources for products.

Rural engineering and biotechnology.

textile items and services.


Meat processing facilities.

Liquor is available in restaurants and dhabas.

tobacco and comparable goods.

Toddy sales and tapping.

cash crop-related activities.

floriculture, gardening, etc.

The list is not exhaustive and is just a suggestion.

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