What is the PMEGP Scheme

What is the PMEGP Scheme?Eligibility Criteria and Objectives

What is the new scheme of PMEGP 2023?

PMEGP full form is the Prime Minister’s Employment Generation Programme, (PMEGP) is a credit-linked subsidy program initiated by the Government of India to encourage self-employment and entrepreneurship, particularly in the micro, small, and medium enterprise (MSME) sector. The scheme is implemented by the Ministry of Micro, Small and Medium Enterprises (MSMEs). Here is a detailed description of the PMEGP scheme:

The government subsidy on the project varies from 15% to 35% while the enterprise owners need to invest only 5% to 10% of the project value. The funding is offered by banks in the form of a term loan or a working capital loan.  However, the project cost is capped at ₹50 lakh for manufacturing units and ₹20 lakh for business units.

Here are some of the key details of the PMEGP:

Interest rateDepends on the bank (typically up to 12% p.a.)
Minimum age of the applicant18 years
Minimum educational qualification of the applicantVIII passed subject to terms and conditions
Government subsidy rate15% to 35% depending on rural or urban projects in general or special category
Maximum project cost ₹50L for manufacturing units and ₹20L for service units
EntitiesEntrepreneurs, MSMEs, Co-operative Societies, Charitable Trusts, Self Help Groups, etc.


  • The primary aim of the PMEGP scheme is to generate sustainable employment opportunities by promoting the establishment of micro-enterprises in both rural and urban areas of the country.
  • It seeks to create a culture of entrepreneurship and self-reliance among individuals.
  • To provide financial assistance from government and banks to new micro-enterprises in both urban and rural areas of India
  • To create sustainable employment opportunities, especially for youth and women, through the establishment of new ventures
  • To promote self-employment among the unemployed youth of the country
  • To limit forced migration to urban areas by enhancing employment opportunities in rural areas
  • To encourage the setting up of micro-enterprises in traditional as well as modern industries
  • To enhance the overall economic development of the country through the creation of new businesses and job opportunities

Who is eligible for PMEGP loan?

Below are the eligibility criteria for the PMEGP Loan scheme:


  • The applicant should be a citizen of India.

Age Limit:

  • There is no specific age limit for availing benefits under PMEGP. Individuals of any age can apply.

Educational Qualification:

  • The educational qualification required varies based on the nature of the project. There is no specific educational criterion for all projects, but some projects may require specific skills or qualifications.

Type of Beneficiaries:

  • Individuals, including educated unemployed youth, rural and urban entrepreneurs, and women, can apply for assistance under PMEGP.
  • Self-help groups (SHGs), institutions registered under the Societies Registration Act, and production-based co-operative societies are also eligible.

Project Cost:

  • PMEGP primarily supports micro-enterprises. The maximum cost of the project that can be considered under PMEGP is defined based on the sector (manufacturing or service) and the location (urban or rural).

Income Criteria:

  • The family income of the beneficiary should be within the prescribed limit, which may vary depending on factors like location (urban/rural) and the category of the beneficiary.

Employment Generation:

  • The project should have the potential to generate employment opportunities.

Industry Sector:

  • PMEGP covers a wide range of economic activities, including manufacturing, services, and business sectors. The proposed project should fall within the list of activities approved under PMEGP.

Existing Units:

  • Existing units that undertake expansion or diversification are also eligible for assistance under PMEGP, provided the proposed project meets the scheme's criteria.

Documents Required While Applying for PMEGP:

  • PMEGP application form with passport-sized photographs
  • Identity & address proofs like PAN card, Aadhaar card & VIII Pass certificate
  • Project report
  • Special category certificate, if applicable
  • Certificate of EDP
  • Caste Certificate for SC/ST/OBC/Minority/Ex-Servicemen/PHC
  • Certificate of academic and technical courses, if any Any other documents required by the lender

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