Prime Minister’s Employment Generation Programme (PMEGP) : Objectives & Eligibility

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.

The primary aim is to generate jobs in both rural and urban regions, by way of self-employment ventures, micro enterprises, and other eligible projects. It also aims at bringing back the tradition of village artisanship and helping urban youth who are unable to get jobs due to one reason or the other. The programme also looks to provide employment that is continuous and sustainable and make sure its beneficiaries’ earning capacities are enhanced thus.

Prime Minister’s Employment Generation Programme (PMEGP)

The Employment Generation scheme is to be implemented in both rural and urn=ban areas under different operating norms.

  • Rural Area as declared under KVIC Act 2006 – Scheme to be implemented by KVIC, KVIB and DIC (“Rural Area”
  • Urban area – Only District Industries Centres (DIC)

Objectives Of Prime Minister’s Employment Generation Programme (PMEGP)

  • Generating continuous and sustainable employment opportunities in Rural and Urban areas of the country
  • Providing continuous and sustainable employment to a large segment of traditional and prospective artisans, rural and urban unemployed youth in the country through setting up of micro enterprises.
  • To facilitate participation of financial institutions for higher credit flow to micro sector.

Eligibility Conditions for the Scheme

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

  • Any individual, who is 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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Monetary assistance in the Scheme

  • 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).
Categories of beneficiaries under PMEGP Beneficiary’s own contribution (of project cost) Rate of Subsidy
Urban Rural
General Category 10% 15% 25%
Special (including SC/ST/OBC /Minorities/ Women, Ex-Servicemen, Physically handicapped, NER, Hill and Border areas etc) 05% 25% 35%

There are however industries which are not provided any assistance under this scheme. These are as follows:

  • Any industry or business that deals with meat, beedi, pan, cigar, cigarette, liquor, tobacco or toddy.
  • Industry that is in the business of pashmina wool or similar products that need hand weaving and hand spinning – ones that are already being benefitted by the Khadi Programme and enjoy sales rebates.
  • Any industry or business that is related to tea, coffee, rubber, sericulture, horticulture, floriculture and animal husbandry.
  • Rural transport, with the only exceptions being cycle rickshaws, auto rickshaws in Andaman and Nicobar Islands, and house boats, tourist boats, and shikaras in Jammu and Kashmir
  • Any industry that is related to items that may cause environmental issues such as polythene carry bags.

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