Prime Minister Employment Generation Programme (PMEGP) is a credit-connected funding program presented by the public authority of India in 2008. PMEGP is a consolidation of two plans, specifically, Head administrator’s Rojgar Yojna and Rural Business Age Programme. This program centers around producing independent work openings through miniature endeavor foundations in the non-farm area by aiding jobless youth and conventional artisans.

The  Assistance of MSME deals with Prime Minister Employment Generation Programme. The PMEGP Plan is being executed by Khadi and Village Industries Commission (KVIC) at the public level. At the State level, the Plan is being carried out through State Khadi and Village Industries Commission Directorates and banks.

Objective Of PMEGP

  •  Generation of economical and persistent independent work open doors in metropolitan and rural spaces of the country
  • Providing economical and persistent work to a huge section of the country and metropolitan jobless youth, conventional and forthcoming artisans through the foundation of miniature ventures
  • Facilitating the monetary organization’s interest for higher credit stream to the miniature area
Objectives of PMEGP
Objectives of PMEGP


  •   People with age of 18 years or more
  •   Passing standard VIII is needed for an undertaking above Rs 5 lakh in the assistance area or more than Rs 10 lakh in the assembling area
  •   Institutions enlisted under Social orders Enrollment Act-1860
  •   Production-based co-usable social orders
  •   Self-help gatherings and beneficent trust

Salient features of the scheme

  • The Plan is executed through Khadi and Village Industries Commission, State Khadi and Village Industries Commission Directorates, State Khadi and Village Industries Boards and District Industries Centers and banks in Metropolitan and Non Metropolitan regions in the ratio of 30:30:40 between Khadi and Village Industries Commission / Khadi and Village Industries Boards / DIC respectively
  •   Assistance under the Prime Minister Employment Generation Programme is simply accessible to new units that are to be set up
  •   There is no payment limit for setting up projects
  •   Existing unit or units that are as of now profiting any administration appropriation (State or Focal) are ineligible
  •   Any industry including coir-based mission (excepting those referred to in the negative overview) can take advantage of this arrangement
  •   The per capita venture under the plan ought not to surpass Rs 1 lakh in plain regions and Rs 1.5 lakh in uneven regions.
  •   The maximum project cost of Rs 10 lakh in the service area and Rs 25 lakh in the manufacturing area is this breaking point.

Areas of Operation

Non-Metropolitan regions, as expressed under Khadi and Town Businesses Commission Act 2006 – Plan, implies the region contained in any town and incorporates the region included around there. The population ought not surpass 20,000 or such other figure as the Central Government may determine occasionally. In the metropolitan region, just District Industries Centers (DIC) are incorporated.

Negative list of activities

  • Businesses/Businesses associated with handling/creations/offer of meat or intoxicant things like skillet/beedi/cigarette and so forth
  • Businesses/Businesses connected with sericulture, development, gardening, cultivation.
  • Manufacture of compartments of reused plastic/polythene convey sacks of under 20 microns
  • Processing of pashmina fleece and different items which includes hand turning and hand weaving which goes under the domain of Khadi Confirmation Rule.
  • Rural transport (aside from houseboat, shikara, vacationer boat in Andaman and Nicobar Islands and in Jammu and Kashmir, auto cart and cycle cart.) CNG auto cart will be allowed uniquely in Andaman and Nicobar Islands and North Eastern District of the country with the earlier endorsement of Boss Secretary of the State on merit.


The margin cash commitment of the Prime Minister Employment Generation Programme is 5% of the expense of the undertaking for uncommon class borrowers and 10% for General classification borrowers. Representation: Assume Miss Nishitha applies to XYZ bank for Rs 8 lakh credit, the bank may back just 80% of the advance sum (i.e. Rs 6,40,000/-). The equilibrium 20% (i.e. Rs 1,60,000/-) is called edge cash and Nishita needs to make plans for something very similar.


  • General Category: The qualified sponsorship is 25% of the expense of the task in country regions and 15% in metropolitan regions.
  • Special Category: The qualified sponsorship is 35% of the expense of the task in country regions and 25% in metropolitan regions

Quantum of margin cash appropriation

Classes of recipients under PMEGPBeneficiary’s own commitment (of project cost)Rate of Sponsorship 
General Category10%15%25%
Special Category (including SC/ST/OBC /Minorities/ Women, Ex-Servicemen, Physically handicapped, NER, Hill, and Border areas etc)5%25%35%

How does this scheme work?

We should accept Mr. Don, a youthful new business visionary from Bangalore Metropolitan, needs to apply for the PMEGP plot Assessed Undertaking Cost – Rs 10 lakh Mr. Don’s Commitment (Required according to PMEGP) – Rs 1 lakh (10% of Rs 10 lakh) Sum Got By Mr. Don – Rs 9 lakh Note:

The edge cash (i.e. 15% of the Undertaking Cost – Rs 1,50,000/ – ) for the most part retained by the bank will be repaid to the bank by KVIC within 24 hours of acknowledgment of the PMEGP application. Henceforth, businesspeople like Mr. Don can get the necessary funding to continue with their endeavor effectively/Note:

  • Banks will fund capital use as a term advance and working capital as money credit. Activities can likewise be financed as composite credit comprising of capital consumption and working capital
  • The bank credit will be going between 60-75% of the expense in the wake of deducting (Money Margin) subsidy and the proprietor’s contribution.
  • Though banks will guarantee appropriation based on the projections of capital consumption referenced in the task report. Money Margin can be benefited just on the real avail of capital use and overabundance assuming any, is to be discounted to KVIC
  •  Working Capital part ought to be used in such a way that at one point. And it should contact 100% constraint of the money credit inside 3 years of the lock-in time of Money Margin and at least 75% usage of as far as possible. To apply visit the site
The rate of Interest and Repayment Schedule Of Prime Minister Employment Generation Programme :

The ordinary financing cost is relevant to the venture every now and then. The Reimbursement Timetable ranges from 3 – 7 years.


No insurance security nor any outsider assurance is demanded here. Any resources made from the bank advance ought to be hypothecated to Bank.

Nodal Agency:

At the public level, KVIC is the nodal office. The plan will be carried out through Khadi and Village Industries Commission, Khadi and Village Industries Boards and DIC in both Metropolitan and Rural regions.


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