Prime Minister’s Employment Generation Programme (PMEGP)

Date : 01/12/2017 - 31/03/2019 | Sector: industries

PMEGP is implemented annually where beneficiaries are selected through interview conducted by the board with the Deputy Commissioner as Chairman. The beneficiaries are selected as per the target allocated by the KVIC after which a number of nationalised banks are selected to assist the beneficiaries financially in setting up various units/projects.

PMEGP is the result of the merger of two schemes- Prime Minister’s Rojgar Yojana (PMRY) and the Rural Employment Generation Programme (REGP). It is a credit linked subsidy programme of GOI where the objective of the programme is to generate employment opportunities in rural as well as urban areas through setting up of new self-employment ventures/projects/micro enterprises.

The programme was launched on 15th August 2008.


  • Individual above 18 years of age setting up new projects
  • Institutions registered under societies Registration Act,Specified institutions, Societies and Charitable Trusts
  • Self Help Groups which have not availed benefits under any other scheme
  • Only one person from one family is eligible. There is no ceiling on income
  • The applicant should have passed atleast VIII standard for setting up of project above Rs. 10 lakh in the manufacturing sector and above Rs. 5 lakh in the business/service sector
  • Only new projects for activities excluding the negative list of village industries notified are eligible for assistance under the scheme.Existing units which have already availed subsidy under any scheme are not eligible.

Project Cost:

The maximum cost of the project admissible is Rs. 25 lakh under the manufacturing sector and Rs. 10 Lakh under business/service sector. Project cost will include capital expenditure and one cycle of working capital. Projects without capital expenditure are not eligible for financing under the scheme. Cost of the land should not be included in the project cost. 

working capital component should be utilized in such a way that at one point of stage it touches 100% limit of cash credit within three years and not less than 75% utilization of the sanctioned limit during the first year. if it does not touch the aforesaid limit, proportionate amount of the subsidy will be recovered and refunded to the KVIC at the end of the third year.


The margin money contribution @10% of the project cost for General category borrowers and @5% of the project cost for special category borrowers.


General category: The eligibility subsidy is @15% of the project cost in urban area and @25% of the project cost in rural area. 

Special Category: The eligibility subsidy is @25% of the project cost in urban area and @35% of the project cost in rural area.

Rate of Interest and Repayment Schedule:

Normal rate of interest as applicable to the enterprise from time to time. Repayment Schedule may range between 3 to 7 years.


No collateral security and third party guarantee are insisted. Assets created out of the bank laon should be hypothecated to Bank.

Nodal Agency:

The Khadi and Village Industries Commission (KVIC) is the nodal agency at the national level. The scheme will be implemented through KVIC and KVIB in rural ares and through DICs in both rural and urban areas.


Training for a period of 2 weeks is mandatory for all the beneficiaries. The sponsoring agency will arrange the EDP training through accredited training center on receipt of information of sanction. 



Institutions registered under societies Registration Act, Societies and Charitable Trusts



How To Apply

Khadi and Village Industries Commission (KVIC)

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