• Milind Savardekar

What is Prime Minister Employment Generation Progam?

Updated: May 12

Prime Minister’s Employment Generation Program (PMEGP) is a credit linked subsidy program administered by the Ministry of Micro, Small and Medium Enterprises, Government of India. Khadi & Village Industries Commission (KVIC), is the nodal agency at national level for implementation of the scheme. At state level the scheme is implemented through KVIC, KVIB and District Industries center.

  • Eligibility

  • Interest Rates & Charges


  • To generate employment opportunities in rural as well as urban areas through setting up of self-employment ventures.

  • To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and unemployed youth, so as to help arrest migration of rural youth to urban areas.


  • The scheme is applicable to all viable (technically as well as economically) projects in rural as well as urban areas, under Micro enterprises sector.

  • The maximum cost of the project admissible under manufacturing sector is Rs.25 lakhs and business/services sector is RS.10 lakhs.

  • Only one person from family is eligible for obtaining financial assistance under the scheme.

  • Assistance under the Scheme is available only for new projects

  • The assistance under the scheme will not be available to activities indicated in the negative list under the scheme.

Eligible Entrepreneurs / Borrowers

  1. Any individual, above 18 years of age

  2. The beneficiaries should have passed at least VIII standard, for setting up of project costing above Rs.10 lacs in the Manufacturing Sector and above Rs. 5 lacs in the business /Service Sector,

  3. Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme).

  4. Institutions registered under Societies Registration Act,1860Production Co-operative Societies

  5. Charitable Trusts.


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.

Selection of beneficiaries

The beneficiaries will be identified & selected at the district level by a Task Force consisting of representatives from KVIC/State KVIB/ State DICs and Banks and headed by the District Magistrate / Deputy Commissioner / Collector concerned.

Subsidy Entitlement & Bank Finance

Subsidy from KVIC and the bank finance depends on the cost of project as per details given below :


  • Assets created out of the bank's finance.

  • Personal guarantee of the proprietor / promoter.

  • No collateral security up to Rs. 5 lakhs.

  • Eligible units will be covered under Credit Guarantee Fund scheme for Micro & small Enterprises – CGMSE. (excluding Margin Money / subsidy component)


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