Prime Minister’s Employment Generation Programme (PMEGP)- Details & Objectives

Prime Minister’s Employment Generation Programme (PMEGP)

The Prime Minister’s Employment Generation Programme (PMEGP) is a scheme which was implemented by Khadi and Village Industries Commission (KVIC), as the nodal agency at the National level. While at the State level, the Scheme is implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) as well as banks. The Government subsidy under the Scheme is routed by KVIC through the identified Banks for eventual distribution to the beneficiaries / entrepreneurs in their Bank accounts by the government.

Government of India has approved the introduction of new credit linked subsidy programme called Prime Minister’s Employment Generation Programme (PMEGP) by merging the two schemes that were in operation namely Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas.


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The maximum cost of the project/unit admissible in manufacturing sector is ₹ 25 lacs while in the business/service sector, it is ₹ 10 lacs.
Categories of Beneficiary’s Rate of subsidy under PMEGP (of project cost) is as follows:
Area wise (location of project/unit) :–

  • General category 15%(Urban), 25%(Rural),
  • Special categories including SC/ ST/ OBC/ Minorities/Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas, etc. 25%(Urban), 35%(Rural).

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


The objectives of the Prime Minister’s Employment Generation Programme (PMEGP) are as follows:

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

(ii) To bring together widely dispersed traditional artisans or 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, in order to help arrest migration of rural youth to urban areas, and

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

Eligibility Conditions of Beneficiaries

The beneficiaries are eligible to apply for the respective scheme if they fulfil following eligibility criteria:

  • Any individual, above 18 years of age is eligible for the scheme.
  • There will be no income ceiling of assistance for setting up projects under PMEGP.
  • For setting up of project costing above Rs.10 lacs in the manufacturing sector and above Rs. 5 lacs in the business /service sector, the beneficiaries should possess at least VIII standard pass educational qualification are eligible.
  • Assistance under the Scheme is available only for new projects sanctioned specifically under the PMEGP are eligible.
  • Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme) are also eligible for assistance under PMEGP are also eligible.
  • Institutions registered under Societies Registration Act,1860 are eligible.
  • Production Co-operative Societies are also eligible.
  • Charitable Trusts are 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 for availing the facilities provided by the scheme.

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