How to Get Benefited from the Prime Minister’s Employment Generation Programme?

Business & Finance

The Prime Minister’s Employment Generation Programme (PMEGP full form) came into effect back in 2008 with the prime objective to generate self-employment to the unemployed youth of India by providing subsidised financial assistance.

Rate of unemployment in India (as of 2018) –

  • Overall – 6.1%.
  • Urban areas – 7.8%.
  • Rural areas – 5.3%.

This programme is the merger of the following schemes –

  1. Pradhan Minister’s Rozgar Yojana (PMRY)

Pradhan Minister’s Rozgar Yojana (PMRY) was launched in 1993 and aimed to generate employment for 10 Lakh unemployed youth by establishing 7 Lakh micro enterprises within 1995.

After 1995, the government continued this scheme with significant changes – PMRY provided subsidised loans up to Rs. 10 Lakh with tenors ranging from 3 to 7 years.

  1. Rural Employment Generation Programme (REGP)

Rural Employment Generation Programme (REGP) was launched in the year 1995. It aimed at providing loans up to Rs. 25 Lakh to individuals, Self Help Groups (SHGs), trusts, and cooperative societies.

The primary objectives were to generate rural industrialisation, create employment, and develop entrepreneurial skills among the unemployed youth in rural areas.

Overview of Prime Minister’s Employment Generation Programme

The PMEGP scheme is a government business loan scheme implemented by the Khadi and Village Industries Commission (KVIC), an apex body under the Ministry of Micro, Small & Medium Enterprises (MoMSME).

At the state level, this programme is implemented by –

  • District Industries Centres (DICs.)
  • State Khadi and Village Industries Boards (KVIBs)
  • State KVIC Directorates.
  • Financial institutions.

This scheme is implemented by the KVIC, KVIBs, and DICs in the ratio of 30:30:40 in rural areas.

Who can benefit from this scheme?

Following beneficiaries are eligible for the Prime Minister’s Employment Generation Programme –

  • Self Help Groups.
  • Charitable trusts.
  • Production-based cooperative societies.
  • Bodies registered under the Societies Registration Act, 1860.
  • Individuals aged 18 years or above.

Beneficiaries have to be standard VIII pass to avail a PMEGP loan above Rs. 10 Lakh for the manufacturing sector and Rs. 5 Lakh for the service sector.

Additionally, individuals and bodies which have already availed the benefits of PMRY or REGP are not eligible for this programme.

Those who are not eligible for this programme can easily get a collateral-free business loan from NBFCs.

How to apply for this scheme?

Eligible beneficiaries can apply for this scheme from KVIC’s official website. Additionally, the State and Divisional Directors of the KVIC also provide local advertisements to invite eligible individuals and bodies to apply for this programme.

Highlights of Prime Minister’s Employment Generation Programme

This programme provides financial assistance to businesses, where the maximum project cost must not exceed the following –

  • 10 Lakh for the services sector.
  • 25 Lakh for the manufacturing sector.

The project cost is the representation of the capital expenditure and working capital of a business for one financial year.

In addition to the above criteria, the per capita investment is also restricted to Rs. 1.5 Lakh in hilly regions and Rs. 1 Lakh in other areas.

Some of the PMEGP loan details include –

Margin money

Beneficiaries have to contribute a specific percentage of the project cost as margin money. For general category individuals, it is 10% while that for special category (border regions, north-eastern states, hilly regions, women, ex-servicemen, SC/ST/OBC, and minorities) is 5%.

Subsidy

The subsidy is also segregated as per the category and region in the following manner –

  • Special category – 25% in rural and 15% in urban regions.
  • General category – 35% in rural and 25% in urban areas.

The Ministry of Micro, Small and Medium Enterprises recently notified that PMEGP generated 5.87 Lakh jobs in the micro-enterprise sector during 2018-19; its initial target was 5.79 Lakh jobs.

Jammu and Kashmir is the state with the highest jobs creation – 60,000+ followed by Maharashtra – 45,000+, Uttar Pradesh – 41,000+, and Tamil Nadu – 41,000+.

New beneficiaries can benefit exceptionally from the PMEGP, which has already established more than 400 units in the last 3 years.

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