Prime Minister’s Employment Generation Programme (PMEGP)
Introduction
India’s biggest challenge is not just creating jobs but ensuring sustainable self-employment opportunities. Many youths, especially in rural and semi-urban areas, remain unemployed despite having basic skills. To support them, the government introduced the PM Employment Generation Programme (PMEGP), which provides financial assistance for setting up micro-enterprises.
It is a Central Sector Scheme, implemented mainly through the Khadi and Village Industries Commission (KVIC), and in the case of coir-based units, through the Coir Board.
Quick Facts
- Purpose: Employment generation for unemployed youth and traditional artisans.
- Type: Central Sector Scheme.
- Implementing Agency:
- KVIC – Nodal agency.
- Coir Board – For coir-based enterprises.
- Tenure: Extended up to 2025–26.
Objectives
- Provide financial assistance to self-employment ventures.
- Generate sustainable employment in both rural and urban areas.
- Promote entrepreneurship among unemployed youth and traditional artisans.
Salient Features
- Background:
- Launched in 2008, but under the MSME Champions Scheme (2022), it was reorganized.
- It has subsumed earlier schemes:
- Prime Minister’s Rojgar Yojana (PMRY)
- Rural Employment Generation Programme (REGP)
- Eligibility & Coverage:
- Only new units are eligible.
- Open to all viable micro enterprises in rural and urban areas.
- No income ceiling for applicants.
- Only one person per family can receive assistance.
- Education Requirement:
- For projects above ₹10 lakh (manufacturing) or ₹5 lakh (services), applicant must have passed 8th standard.
- Maximum Project Cost:
- ₹50 lakh → Manufacturing sector
- ₹20 lakh → Service sector
- Digitization: Entire process is online, with margin money directly transferred by banks.
Financial Assistance Pattern
Funding is a mix of bank finance + subsidy + promoter’s contribution.
- General Category:
- Bank Finance: 90%
- Promoter’s Contribution: 10%
- Subsidy (by KVIC):
- 15% in urban areas
- 25% in rural areas
- Special Category (SC, ST, OBC, minorities, women, ex-servicemen, NER, aspirational districts, disabled, transgenders, etc.):
- Bank Finance: 95%
- Promoter’s Contribution: 5%
- Subsidy:
- 25% in urban areas
- 35% in rural areas
👉 This clearly shows the inclusive focus, as vulnerable groups and backward regions get higher subsidies.
Inclusivity and Support for Vulnerable Groups
Special emphasis is placed on:
- SC/ST, minorities, women, ex-servicemen
- North Eastern Region (NER)
- Aspirational districts
- Differently-abled and transgenders
They receive enhanced subsidy support, ensuring financial inclusion.
Conclusion
The PMEGP is essentially a credit-linked subsidy scheme that empowers unemployed youth and artisans to become entrepreneurs. Instead of waiting for salaried jobs, beneficiaries are encouraged to set up micro-enterprises with government support in the form of subsidy, bank loans, and training.
It plays a crucial role in promoting self-reliance, rural industrialization, and inclusive development, making it a very important scheme for UPSC preparation.