Prime Minister's Employment Generation Programme (PMEGP)

PMEGP 2015-2016 Application Form and Checklist Operational Guidelines / Minutes Circulars Physical Verification of PMEGP units Guidelines Flow Chart PMEGP Scheme Bank
This programme has been launched by merging the two schemes that were in operation till 31.03.2008 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. PMEGP is a central sector scheme administered by the Ministry of Micro, Small and Medium Enterprises (MoMSME). The Scheme is implemented by Khadi and Village Industries Commission (KVIC), a statutory organization under the administrative control of the Ministry of MSME as the single 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) and District Industries Centres (DICs) and banks.
Objective :
  • To generate employment opportunities in rural as well as urban areas through setting up of self employment ventures.
  • 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 and also to increase their income
  • 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.
Levels of funding under PMEGP
Categories of beneficiaries under PMEGP
Beneficiary's contribution (of project cost)
Rate of Subsidy (of project cost)
Area (location of project / unit)  
General Category
Special (including SC / ST / OBC / Minorities / Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas etc.
  1. The maximum cost of the project/unit admissible under manufacturing sector is Rs. 25 lakh.
  2. The maximum cost of the project/unit admissible under business/service sector is Rs. 10 lakh.
  3. The balance amount of the total project cost will be provided by Banks as term loan
  • 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 scheme is aimed at encouraging manufacturing sector.
  • The assistance under the scheme will not be available to activities indicated in the negative list including business activities like grocery shop, stationery shops etc; farm related activities like goatery, piggery, poultry etc; and urban/rural transport activities(except auto rickshaw, tourist boat & house boat in A & N Islands; Shikara & tourist boat in J & K, & cycle rickshaw)
Eligible Entrepreneurs / Borrowers
  • Any individual, above 18 years of age
  • There will be no income ceiling for assistance for setting up projects under PMEGP.
  • The beneficiaries should have passed at least VIII standard, for setting up of project costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business /service sector,
  • 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.
  • Institutions registered under Societies Registration Act,1860
  • Production Co-operative Societies
  • 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 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.

Project Cost

Cost of the project should not exceed Rs. 25 lakhs in respect of manufacturing activity and Rs. 10 lakhs in respect of Service / business activity for all categories of eligible borrowers.

Bank finance
Subsidy from KVIC
Promoter's contribution
Urban Area
Rural Area
General Category beneficiary / institution
Special category beneficiary / institution

Rate of Interest: As applicable to the type of activity (industry/service).
Repayment: 3 to 7 years with an initial moratorium not exceeding 6 (six) months.

  1. Assets created out of the bank's finance.
  2. Personal guarantee of the proprietor / promoter.
  3. No collateral security up to Rs. 5 lakhs.
  4. Eligible units to be covered under Credit Guarantee Fund scheme for Micro & small Enterprises – CGMSE. (excluding Margin Money / subsidy component)
  1. The credit decision rests with the Bank, on the basis of viability of each project.
  2. The selected beneficiary has to undergo EDP/Skill Development training for 2-3 weeks at KVIC/KVIB/accredited training centers is mandatory.
  3. Applications  with project report and all relevant documents may be submitted to KVIC/KVIB/ Banks
  4. Application formats may be obtained from the website of KVIC at
Negative List of Activities

The following list of activities will not be permitted under PMEGP for setting up of micro enterprises / projects / units.

  1. Any industry/business connected with Meat(slaughtered),i.e. processing, canning and/or serving items made of it as food, production/manufacturing or sale of intoxicant items like Beedi/Pan/ Cigar/Cigarette etc., any Hotel or Dhaba or sales outlet serving liquor, preparation/producing tobacco as raw materials, tapping of toddy for sale.
  2. Any industry/business connected with cultivation of crops/ plantation like Tea, Coffee, Rubber etc. sericulture (Cocoon rearing), Horticulture, Floriculture, Animal Husbandry like Pisciculture, Piggery, Poultry, Harvester machines etc.
  3. Manufacturing of Polythene carry bags of less than 20 microns thickness and manufacture of carry bags or containers made of recycled plastic for storing, carrying, dispensing or packaging of food stuff and any other item which causes environmental problems.
  4. Industries such as processing of Pashmina Wool and such other products like hand spinning and hand weaving, taking advantage of Khadi Programme under the purview of Certification Rules and availing sales rebate.
  5. Rural Transport (Except Auto Rickshaw in Andaman & Nicobar Islands, House Boat, Shikara & Tourist Boats in J&K and Cycle Rickshaw).