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Prime Minister’s Employment Generation Program (PMEGP): Creating Employment Opportunities for India’s Youth

The Prime Minister’s Employment Generation Program (PMEGP) is an ongoing plan scheme initiated by the Government of India to promote entrepreneurship and generate employment opportunities for unemployed youth. Implemented by the Ministry of Micro, Small and Medium Enterprises (MSME), PMEGP aims to assist in the establishment of micro-enterprises in the non-farm sector across the country. The Khadi and Village Industries Commission (KVIC) serves as the national-level nodal agency, while state offices of KVIC, State Khadi and Village Industries Boards (KVIBs), and District Industries Centers (DICs) act as implementing agencies. Additionally, the Coir Board is responsible for implementing the program in the coir sector.

Online Application and Funding Process:

The entire process of application, sanctioning, and release of funds by banks is conducted online through the dedicated portal: https://www.kviconline.gov.in/pmeepeportal/pmegphome/index.jsp.

Program Achievements:

Since its inception in 2008-09, the PMEGP has provided support to approximately 7.8 lakh micro enterprises with a subsidy amounting to Rs. 19,995 Crore. These enterprises have generated sustainable employment opportunities for an estimated 64 lakh individuals. Notably, around 80% of the assisted units are located in rural areas, and about 50% of the units are owned by individuals from SC, ST, and women categories.

Continuation and Enhancements:

The PMEGP has been approved for continuation over the 15th Finance Commission Cycle for a period of five years, from 2021-22 to 2025-26. The scheme has been allocated an outlay of Rs. 13,554.42 Crore during this period. To further enhance its impact, several modifications and improvements have been introduced:

  1. Increased Maximum Project Cost: The maximum project cost has been raised from Rs. 25 lakh to Rs. 50 lakh for manufacturing units, and from Rs. 10 lakh to Rs. 20 lakh for service units. This increase aims to accommodate larger-scale enterprises and encourage their growth.

  2. Revised Definition of Village Industry and Rural Area: The definition of village industry and rural area has been modified. Areas falling under Panchayati Raj institutions will be accounted for as rural areas, while areas under municipalities will be treated as urban areas. This distinction allows for better classification and targeted support.
  3. Streamlined Application Processing: All implementing agencies are now authorized to receive and process applications in both rural and urban areas. This change simplifies the application process, ensuring equal opportunities for entrepreneurs across all regions.
  4. Special Category Applicants: PMEGP applicants belonging to aspirational districts and the transgender community will be treated as special category applicants. They will be entitled to a higher subsidy, recognizing the unique challenges they face and promoting inclusivity.

Impact and Coverage:

The PMEGP, with its revised provisions and enhanced funding, is expected to create sustainable employment opportunities for approximately 40 lakh individuals over the next five financial years. All states and union territories in India will be covered under the scheme, ensuring nationwide reach and benefit.

Margin Money Subsidy:

The subsidy rates under PMEGP vary based on the category of applicants and the project location:

  • Special category applicants, including SC, ST, OBC, women, transgender, physically disabled, applicants from the Northeastern region, aspirational districts, and border districts, will receive a higher subsidy. In rural areas, they will be eligible for a subsidy of 35% of the project cost, while in urban areas, the subsidy will be 25%.
  • General category applicants will receive a subsidy of 25% of the project cost in rural areas and 15% in urban areas.

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