Scheme for providing financial assistance to set up new enterprises under PMEGP

1.1. Prime Minister’s Employment Generation Programme (PMEGP)

Related Scheme


Prime Minister Employment Generation Programme (PMEGP)


The scheme is implemented by Khadi and Village Industries Commission (KVIC) functioning as the nodal agency at the national level. At the state level, the scheme is implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs), District Industries Centres (DICs) and banks. In such cases KVIC routes government subsidy through designated banks for eventual disbursal to the beneficiaries / entrepreneurs directly into their bank accounts.

Nature of assistance

The maximum cost of the project/unit admissible in manufacturing sector is 25 lakhs and in the business/service sector, it is 10 lakhs.

Categories of Beneficiary’s Rate of subsidy under PMEGP (of project cost)

Area (location of project/unit) General category 15%(Urban), 25%(Rural), Special 25%(Urban), 35%(Rural)

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

The balance amount of the total project cost will be provided by the banks in the form of term loan and working capital.

Who can apply?

Any individual, above 18 years of age. At least VIII standard pass for projects costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business / service sector. Only new projects are considered for sanction under PMEGP. Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme), Institutions registered under Societies Registration Act,1860; Production Co-operative Societies, and Charitable Trusts are also eligible.

Existing Units (under PMRY, REGP or any other scheme of Government of India or State Government) and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are NOT eligible.

How to apply?

The State/Divisional Directors of KVIC in consultation with KVIB and Director of Industries of respective states (for DICs) will give advertisements locally through print & electronic media inviting applications along with project proposals from prospective beneficiaries desirous of establishing the enterprise/ starting of service units under PMEGP.

The beneficiaries can also submit their application online at and take the printout of the application and submit the same to respective offices along with Detailed Project Report and other required documents.



(i) To generate employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures/projects/micro enterprises.

(ii) To bring together widely dispersed traditional artisans/ rural and urban unemployed youth and give them self-employment opportunities to the extent possible, at their place.

(iii) To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth in the country, so as to help arrest migration of rural youth to urban areas.

(iv) To increase the wage earning capacity of artisans and contribute to increase in the growth rate of rural and urban employment.


      • The maximum cost of the project/unit admissible under manufacturing sector is Rs.25 lakh and under business/service sector is Rs.10 lakh.

  • Per capita investment should not exceed 1.00 lakh in plain areas and 1.50 lakhs in Hilly areas.


  • Own contribution 5% to 10% of project cost.

  • General category beneficiaries can avail of margin money subsidy of 25 % of the project cost in rural areas and 15% in urban areas.

For beneficiaries belonging to special categories such as scheduled caste/scheduled tribe /women the margin money subsidy is 35% in rural areas and 25% in urban areas.

  • Quantum of Margin Money Subsidy is given as follows:
Categories of beneficiaries under PMEGP


Beneficiary’s own contribution (of project cost)

Rate of Subsidy

Area (location of project /unit)




General Category




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




PMEGP – All India Achievement

Progress of PMEGP during XI(2008-09 to 2011-12) & XII Plan (2012-13 to 2015-16)

YearMM subsidy released (Rs crore)MM subsidy utilized# (Rs crore)No. of projects assistedEstimated employment generated
XI Plan Total (2008-09 to 2011-12)3131.653067.691,64,28316,05,865
XII Plan Total4303.54152.091946481442815
Grand Total [XI and XII Plan]7435.157219.783589313048680
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