The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme of the Government of India designed to promote self-employment and generate employment by supporting the establishment of new micro enterprises in rural as well as urban areas. The scheme is implemented nationally by Khadi and Village Industries Commission (KVIC) through KVIC/KVIB offices, District Industries Centres (DICs) and participating banks.

Key Features of the PMEGP Scheme

1. Financial Assistance
PMEGP provides Margin Money Subsidy linked with bank finance for eligible new micro-enterprises. The maximum project cost eligible for subsidy is ₹50 lakh for manufacturing projects and ₹20 lakh for business/service projects. The remaining eligible project cost, after the beneficiary’s contribution, is financed by the bank.

2. Government Subsidy up to 35%
Eligible applicants can receive subsidy ranging from 15% to 35% of the project cost, depending on the applicant category and location of the project. Special-category beneficiaries in rural areas can receive up to 35% subsidy

3. Support for New Businesses
The scheme is primarily available for new viable micro-enterprises in manufacturing and business/service activities. Projects must include eligible capital expenditure and comply with PMEGP guidelines.

4. Bank Loan Support
PMEGP combines government margin-money subsidy with bank finance, helping eligible entrepreneurs establish their businesses with a relatively lower initial own contribution. General-category beneficiaries contribute 10%, while special-category beneficiaries contribute 5% of the project cost.

5. Employment Generation
The main objective of PMEGP is to create sustainable self-employment and employment opportunities by encouraging entrepreneurs, artisans and unemployed youth to establish micro-enterprises in both rural and urban areas.