Prime Minister’s Employment Generation Programme (PMEGP): A Guide to the Guidelines

The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme by the Government of India, aimed at generating employment opportunities through the establishment of new micro-enterprises in both rural and urban areas. This piece provides an overview of the PMEGP guidelines, its objectives, and implementation strategies.

Background and Objectives

The PMEGP was launched by merging two existing schemes: the Prime Minister’s Rozgar Yojana (PMRY) and the Rural Employment Generation Programme (REGP). The scheme seeks to address unemployment by:

• Generating employment opportunities in rural and urban areas.

• Bringing together traditional artisans and unemployed youth.

• Providing continuous and sustainable employment.

• Increasing the wage-earning capacity of artisans.

Implementation of PMEGP

The scheme is implemented by the Ministry of Micro, Small and Medium Enterprises (MSME) through the Khadi and Village Industries Commission (KVIC). At the national level, KVIC is the single nodal agency, with implementation at the state level through:

• State KVIC Directorates

• State Khadi and Village Industries Boards (KVIBs)

• District Industries Centres (DICs)

Financial Assistance Under PMEGP

The scheme provides financial assistance through subsidies on project costs. The level of subsidy varies based on the category of beneficiary and the location of the project:

• Maximum project cost for manufacturing sector: ₹50 lakh.

• Maximum project cost for business/service sector: ₹20 lakh.

• The remaining amount of the project cost is provided by banks as term loan.

Eligibility Criteria for Beneficiaries

To be eligible for PMEGP, beneficiaries must:

• Be above 18 years of age.

• Not have any income ceiling.

• Possess at least VIII standard pass qualifications for projects above ₹10 lakh in the manufacturing sector and above ₹5 lakh in the business/service sector.

• Belong to a Self-Help Group (SHG) that has not availed benefits under any other scheme.

• Be registered under the Societies Registration Act, 1860.

• Be a Producing Co-operative Society or Charitable Trust.

• Not be an existing unit that has already availed government subsidy under any other scheme.

Other Eligibility Conditions

• A certified copy of the caste/community certificate is required for special categories.

• A certified copy of the byelaws of the institutions is required.

• Project cost should include capital expenditure and one cycle of working capital.

• Cost of land and ready-built sheds is not included in the project cost.

• PMEGP is not applicable to new mineral mining enterprises.

• Existing units under PMRY, REGP, or other similar schemes are not eligible.

Implementing Agencies

The scheme is implemented through:

• Khadi and Village Industries Commission (KVIC) at the national level.

• State KVIC Directorates, KVIBs, and DICs at the state and district levels.

• Banks and financial institutions.

Other agencies include:

• Field offices of KVIC and its state offices.

• District Industries Centres (DIC).

• Banks/Financial Institutions.

• KVI Federation.

• Department of Women and Child Development (DWCD), Nehru Yuva Kendra Sangathan (NYKS), and other relevant organizations.

• Professional/Technical Colleges and Training Institutes.

• Micro, Small and Medium Enterprises Development Institutes (MSME-DIs).

• National Small Industries Corporation (NSIC) offices and training centers.

• National Level Entrepreneurship Development Institutes.

• Udyami Mitras empanelled under Rajiv Gandhi Udyami Mitra Yojana (RGMY).

Financial Institutions

The scheme is supported by various financial institutions:

• 27 Public Sector Banks.

• All Regional Rural Banks (RRBs).

• Co-operative Banks approved by State Level Task Force Committees.

• Private Sector Scheduled Commercial Banks.

• Small Industries Development Bank of India (SIDBI).

Identification of Beneficiaries

The identification of beneficiaries is done at the district level by a Task Force, including representatives from KVIC/KVIB, DICs, and banks. The Task Force scrutinizes applications and selects beneficiaries based on skill, experience, and project viability.

Bank Finance

• Banks finance 90% of the project cost for general categories and 95% for special categories.

• Loans are provided as a combination of term loans and working capital.

• Margin money (subsidy) is released by KVIC.

• Rate of interest is as per the bank’s norms.

Village and Rural Areas

• Village Industry: Any industry in the rural area using local resources and manpower.

• Rural Area: As defined by the revenue record of the State/Union Territory.

Modalities of Scheme Operation

• Project proposals are invited through advertisements and multi-media platforms.

• Sponsoring of projects by any agency is not mandatory.

• A Task Force scrutinizes the applications.

• KVIC is the nodal agency and releases funds to implementing agencies.

• Banks make their own credit decisions based on project viability.

Entrepreneurship Development Programme (EDP)

• A two to three-week mandatory training program is provided to beneficiaries before the first installment of the loan is released.

• The training aims to motivate and develop entrepreneurial skills.

• Training is provided by KVIC, KVIB, DIC training centers, and other recognized institutions.

Monitoring and Evaluation

• The Ministry of MSME monitors the scheme at the national level.

• KVIC reviews performance with State KVIBs and DICs.

• State governments monitor the scheme at the state level.

• A comprehensive evaluation is conducted after two years of implementation.

Conclusion

The Prime Minister’s Employment Generation Programme (PMEGP) is a significant initiative to promote self-employment and create job opportunities in both rural and urban areas. By providing financial assistance, training, and support, the scheme empowers individuals to become entrepreneurs and contribute to the economic growth of the nation. The guidelines ensure a structured and transparent implementation of the scheme.