Prime Minister's Employment Generation Programme (PMEGP)

What is it?

PMEGP helps people start new micro enterprises by combining a bank loan with a government subsidy. You put in a small share of the project cost yourself, the government contributes a margin money subsidy, and a bank finances the balance.

The subsidy rate depends on two things: where the unit is located, and whether you belong to a special category. Rural projects attract a higher rate than urban ones, and applicants from SC, ST, OBC, minority, women, ex-servicemen, differently-abled and hill or border area backgrounds receive more while also contributing less of their own money.

The programme is deliberately open. There is no income ceiling and anyone over 18 can apply. The main restrictions are that the enterprise must be new, only one person per family can benefit, and larger projects require a minimum level of schooling.

Potential benefit

Margin money subsidy of 15 per cent (urban) or 25 per cent (rural) for general category applicants, and 25 per cent (urban) or 35 per cent (rural) for special category applicants. Maximum project cost Rs 50 lakh for manufacturing and Rs 20 lakh for business or service units. Potential benefit subject to bank sanction and official approval.

Who can apply?

• Age 18 or above

  Where this comes from

  Any individual, above 18 years of age

  Official source ↗
• You run a business or want to start one improves your chances rather than being required

  Where this comes from

  Any individual, above 18 years of age

  Official source ↗
• Special category applicants receive a higher subsidy and contribute less improves your chances rather than being required

  Where this comes from

  Special (including SC / ST / OBC /Minorities/Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas etc.

  Official source ↗
• Women are a special category and receive a higher subsidy improves your chances rather than being required

  Where this comes from

  Special (including SC / ST / OBC /Minorities/Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas etc.

  Official source ↗
• Rural projects receive a higher subsidy rate than urban ones improves your chances rather than being required

  Where this comes from

  General Category [contribution] 10% [Urban] 15% [Rural] 25%

  Official source ↗

Other conditions stated by the government

• There is no income ceiling for assistance under this scheme.
• For projects costing above Rs 10 lakh in manufacturing or Rs 5 lakh in the service sector, you must have passed at least Class 8.
• Only one person from a family is eligible.
• Only new enterprises qualify. Units already receiving a subsidy under another central or state government scheme are not eligible.
• The unit must be registered on the Udyam portal before physical verification and adjustment of the subsidy.

Eligibility information is provided for informational purposes only. Final eligibility and approval are determined by the relevant government authority.

Documents you will need

We have not been able to confirm the document list from an official source, so we have left it out rather than guess. Check the official source linked above.

How to apply

Apply online through the PMEGP e-portal, choosing an implementing agency (KVIC, your State Khadi and Village Industries Board, or the District Industries Centre). A district-level task force interviews and scores you, and approved cases go to a bank for loan appraisal and sanction. After the loan is sanctioned and you complete entrepreneurship development training, the subsidy is released to the bank and later adjusted against your loan.

Where to apply: online and bank

Deadline

No fixed deadline. Applications are accepted on a rolling basis.