The PM Employment Generation Programme Scheme is a credit-linked subsidy programme. It was introduced by the government of India in 2008. Additionally, the PMEGP Scheme is a merger of two schemes. Furthermore, the schemes that have been chosen to be merged together are- Rural Employment Generation Programme and Prime Minister’s Rojgar Yojana.
In addition to this, the PM Employment Generation Programme Scheme has been launched with the aim of focusing on generating self-employment opportunities for the educated unemployed youth. Moreover, these employment opportunities will be generated through micro-enterprise establishments in the non-farm sector.
Along with this, the Prime Minister Employment Generation Programme Scheme is administered by the Ministry of MSME. Besides this, the PMEGP Scheme has been implemented by Khadi and Village Industries Commission at the national level.
In addition to this, on the state level, this scheme is being implemented through State Khadi and Village Industries Commission Directorates, State Khadi and Village Industries Boards and District Industries Centres and banks.
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Synopsis |
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1. The Background of the Scheme |
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2. Objectives of Prime Minister’s Employment Generation Programme Scheme |
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3. Scope of the Scheme |
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4. Eligibility Criteria of PM Employment Generation Programme Scheme |
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5. Additional Information |
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6. The Selection of Beneficiaries |
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7. Salient features of PM Employment Generation Programme Scheme |
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8. Areas of Operation |
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9. List of activities under the PM Employment Generation Programme Scheme |
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10. The Margin |
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11. Subsidy under PM Employment Generation Programme Scheme |
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12. Quantum of Margin Money Subsidy |
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13. How does PM Employment Generation Programme Scheme work?? |
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14. Interest Rate and Repayment Schedule |
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15. Security offered under the PM Employment Generation Programme Scheme |
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16. Requisite Documents |
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17. Application Process for the PM Employment Generation Programme Scheme |
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18. Role of Aatmnirbhar Sena |
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19. The Abstract |
Objectives of PM Employment Generation Programme Scheme
This scheme has been introduced with the following objective: –
- The PMEGP Scheme targets generating self-employment and sustainable opportunities in both urban and rural areas of the country.
- Additionally, the main objective of this scheme is also to provide employment opportunities to a greater segment of rural and urban educated unemployed youth, prospective, and traditional artisans through the establishment of micro-enterprises.
- This scheme is also working to facilitate the financial institution’s participation for higher credit flow to the micro sector.
- Furthermore, Prime Minister Employment Generation Programme Scheme also targets to stimulate the earning capacity of the artisans and encourage the growth rate of employment in both urban as well as rural employment.
Scope of the Scheme
The points stated below explains the scope of the PMEGP Scheme: –
- The PM Employment Generation Programme Scheme is applicable to all the workable projects in rural as well as urban areas under the Micro enterprises’ sector.
- Additionally, the maximum cost of the project that is permitted under the manufacturing sector is ₹25 lakhs, and for the services/business sector, it is ₹10 lakhs.
- Except for this, only one member from each family is eligible to obtain the financial assistance granted under the PM Employment Generation Scheme.
- Furthermore, financial assistance will be granted only for the new projects.
- Besides this, this assistance under the scheme will not be available to activities that are indicated in the negative list.
Eligibility Criteria of PM Employment Generation Programme Scheme
Intending to avail of the benefits extended under this scheme, the borrowers or the entrepreneurs must meet the following: –
- The age of the individual should be 18 or above 18 years of age.
- In addition to this, the beneficiaries who want to avail of the benefits must have passed the 7th standard to set up a project or business entity above the cost of ₹10 lakhs.
- Moreover, the candidate must have passed 7th class for setting up the project in the business/service sector above ₹5 lakhs.
- Additionally, the Self-help groups and people belonging to Below Poverty Line (BPL) are also eligible.
- Along with this, the institutions that are registered under the Societies Registration Act,1860 are also eligible under the PM Employment Generation Programme Scheme.
- The Production Co-operative Societies and Charitable Trusts are also eligible.
Additional Information
All the existing units under the Rural Employment Generation Programme and Prime Minister’s Rojgar Yojana that have already availed the Government Subsidy under any other scheme of Government of India or State Government are not eligible under the Prime Minister Employment Generation Programme Scheme.
The Selection of Beneficiaries
1- Under the PM Employment Generation Scheme, the beneficiaries will be identified and selected at the district level.
2- In addition to this, this selection will be done by a Task Force which will consist of the representatives from KVIC/State KVIB/ State DICs and Banks and headed by the District Magistrate / Deputy Commissioner / Collector concerned.
Salient Features of PM Employment Generation Programme Scheme
Let us now learn the key features of this scheme as listed below: –
- This scheme is implemented through Khadi and Village Industries Commission, State Khadi and Village Industries Commission Directorates, State Khadi and Village Industries Boards and District Industries Centres and banks in Urban and Rural areas.
- Its implementation ratio is 30:30:40 between Khadi and Village Industries Commission / Khadi and Village Industries Boards / DIC, respectively.
- Additionally, the assistance under the PM Employment Generation Programme Scheme is only accessible to the new units.
- Besides, there is no income ceiling for setting up the projects.
- Except for this, the existing units are not allowed to avail of the benefits offered.
- Furthermore, the industry which is not mentioned in the negative list can take advantage of this scheme.
- Along with this, the per capita investment under the scheme should not exceed ₹1.5 lakh in hilly areas and ₹1 lakh in plain areas.
- Additionally, the maximum project cost of ₹ 10 lakh in the service sector and ₹25 lakh in the manufacturing sector is this limit.
Areas of Operation
1- As stated under the Khadi and Village Industries Commission Act, 2006 – Scheme, rural area means the area that is comprised in any village.
2- Additionally, the rural area includes the area comprised in any town.
3- Except for this, the population should not exceed twenty thousand or such other figure as the Central Government may define from time to time.
4- Also, only District Industries Centres (DIC) are included in the urban area.
List of Activities under the PM Employment Generation Programme Scheme
Below depicted is a list of all the activities:-
- Processing of Pashmina wool as well as other products, which entails hand spinning & hand weaving which falls under the purview of the Khadi Certification Rule.
- Businesses/ Industries linked with cultivation, sericulture, horticulture, and floriculture.
- Production of containers of recycled plastic/polythene carry bags of not more than 20 microns
- Industries or Businesses that are linked with the processing, production, or sale of meat or intoxicant items such as pan/beedi/cigarette etc.
- Rural transport except for the shikara, tourist boat,
- houseboat in Andaman & Nicobar Islands.
- CNG auto rickshaw will be allowed solely in Andaman & Nicobar Islands.
The Margin
- The margin money contribution is only 5% of the cost of the project for special category borrowers.
- Whereas, it is 10% for the General category borrowers.
Subsidy under PM Employment Generation Programme Scheme
Under the PM Employment Generation Programme Scheme, the subsidy is being granted to two categories as mentioned in the infographic below: –
1- For the General Category, the eligible subsidy is 15% of the cost of the project in urban areas and it is 25% in rural areas.
2- For the Special Category, the eligible subsidy is 25% of the cost of the project in urban areas and it is 35% in rural areas.
Quantum of Margin Money Subsidy
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Categories of beneficiaries under PMEGP |
Beneficiary’s own contribution |
Rate of Subsidy |
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Urban |
Rural |
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General Category |
10% |
15% |
25% |
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Special Category (including Women, Minorities/ SC/ST/OBC) |
5% |
25% |
35% |
How does PM Employment Generation Programme Scheme work??
The points given below explains the working of the PM Employment Generation Programme Scheme.
- The banks will finance capital expenditure in the form of a term loan.
- Whereas, the working capital will be financed in the form of cash credit.
- Additionally, the projects can also be financed in the form of composite loan.
- Except for this, the bank credit will be ranging between 60-75% of the cost after.
- This credit will be calculated after deducting the subsidy, the margin money, and the owner’s contribution.
Interest Rate and Repayment Schedule
- The basic interest rate is applicable from time to time.
- Additionally, the repayment schedule ranges from 3-7 years.
Security offered under the PM Employment Generation Programme Scheme
- Any assets created from the bank loan should be hypothecated to Bank.
- No third-party guarantee is insisted here.
Requisite Documents
Below given are the important documents for applying under the PM Employment Generation Programme Scheme: –
- Aadhaar Card.
- PAN Card.
- Authorization Letter.
- Educational Certificates.
- Caste Certificate.
- Rural Area Certificate.
- Special Category Certificate (only if required).
- Project Report.
Application Process for the PM Employment Generation Programme Scheme
1- Intending to apply under this scheme, visit the official website- http://kviconline.gov.in/ .
2- Now, click the on the link “Prime Minister Employment Generation Programme”.
3- After this, you are required to click on the option “Online Application Form For Individual”.
4- The application form will appear on your screen.
5- Fill in the asked information like- name, first financing bank, sponsoring agency, etc.
6- After filling the application form, click on “Save Application Data”.
7- Now, upload the documents and submit the application.
8- In addition to this, once you submit the application form, you will receive an application id and a password on your registered mobile number.
Role of Aatmnirbhar Sena
Aatmnirbhar Sena is a growing organization that works tirelessly for the development and welfare of our country and its citizens. Our volunteers always remain engaged in working for the betterment of youth as well as the women of the country.
Moreover, Aatmnirbhar Sena also promotes the schemes launched by the government. We also work to create awareness amongst the citizens so that they can be benefited from those and live a better life.
The Abstract
The PM Employment Generation Programme Scheme has been introduced by the government to facilitate the people. Additionally, this initiative will help needy people in setting up a business and earn a better livelihood for them.
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