Prime Minister Employment Generation Programme (PMEGP)

Date : 01/01/2018 - | Sector: Government

This Prime Minister Employment Generation Programme (PMEGP) scheme is controlled by Ministry of Micro, Small and Medium Enterprises, Govt. of India.

This scheme is started by Khadi & Village Industries Commission (KVIC), Govt. of India as single nodal agency at National Level. At State Level, the Scheme is to be implemented by State Khadi & Village Industries Boards (KVIBs) in rural areas and by District Industries Centres (DICs) in Urban areas.

The Delhi Govt. has decided to allow the DKVIB to operate both in Rural and Urban Areas so as to enhance their functional operations keeping in view the shrinking of Rural Areas in Delhi on account of urbanization and regularization of many unauthorized colonies in Delhi by the Govt.

The salient features of this scheme are as under: –

(i) Quantum and Nature of Financial Assistance : –

The maximum cost of project/unit admissible under manufacturing sector is Rs.25 lacs.

The maximum cost of project/unit admissible under business / service sector is Rs.10 lacs.

The Government subsidy under the scheme will be routed by KVIC through the identified banks for eventual distribution to the beneficiaries in their Bank Accounts. Banks will sanction 90% of the project cost in case of General Category of beneficiary / institution and 95% in case of special category of beneficiary / institution and disburse the full amount suitably for setting up the project.

(ii) Eligibility Condition

(i) Any individual, above 18 years of age

  1. There will be no income ceiling for assistance for setting up projects under PMEGP.
  2. For setting up of project costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business /service sector, the beneficiaries should possess at least VIII standard pass educational qualification.
  3. Assistance under the Scheme is available only for new projects sanctioned specifically under the PMEGP.
  4. 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.
  5. Institutions registered under Societies Registration Act,1860;
  6. Production Co-operative Societies, and
  7. Charitable Trusts.
  8. 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.

Other Eligibility Conditions

  1. A certified copy of the caste/community certificate or relevant document issued by the competent authority in the case of other special categories, is required to be produced by the beneficiary to the concerned branch of the Banks along with the Margin Money (subsidy) Claim.
  2. A certified copy of the bye-laws of the institutions is required to be appended to the Margin Money (subsidy) Claim, wherever necessary.
  3. Project cost will include Capital Expenditure and one cycle of Working Capital. Projects without Capital Expenditure are not eligible for financing under the Scheme. Projects costing more than Rs.5 lakh, which do not require working capital, need clearance from the Regional Office or Controller of the Bank’s Branch and the claims are required to be submitted with such certified copy of approval from Regional Office or Controller, as the case may be.
  4. Cost of the land should not be included in the Project cost. Cost of the ready built as well as long lease or rental Work-shed/Workshop can be included in the project cost subject to restricting such cost of ready built as well as long lease or rental workshed/workshop to be included in the project cost calculated for a maximum period of 3 years only.
  5. PMEGP is applicable to all new viable micro enterprises, including Village Industries projects except activities indicated in the negative list of Village Industries. Existing/old units are not eligible (Para 29 of the guidelines refers).


  1. The Institutions/Production Co-operative Societies/Trusts specifically registered as such and SC/ ST/ OBC/ Women/ Physically Handicapped / Ex-Servicemen and Minority Institutions with necessary provisions in the bye-laws to that effect are eligible for Margin Money (subsidy) for the special categories. However, for Institutions /Production Cooperative Societies/Trusts not registered as belonging to special categories, will be eligible for Margin Money (Subsidy) for general category.
  2. Only one person from one family is eligible for obtaining financial assistance for setting up of projects under PMEGP. The ‘family’ includes self and spouse.Industries Commission[KVIC], K Blk, Chaudhary Building, Connaught Place,New Delhi-110001.

(iii) The beneficiary can obtain Loan Application form from the office of KVIB and Khadi and Village

The application form can also be downloaded from website, The complete application form will be deposited in the office of DKVIB and Khadi & Village Industries Commissioner and in the office of District Commissioner.

(iv) Selection of Applicants : – KVIB/KVIC/DIC officer, after ascertaining the applications will forward the same to the respective District Task Force Committees for evaluation and recommendation to the Board

(v) Rate of interest and Repayment Schedule Normal rate of interest shall be charged. Repayment schedule may range between 3 to 7 years after an initial moratorium as may be prescribed by the concerned bank/financial institution.

(vi) Village Industry Any Industry including Coir based projects (except those mentioned in the negative list) which produces goods or renders any service with or without the use of power and in which the fixed capital investment per head of a full time artisan or worker i.e. Capital Expenditure on workshop/workshed, machinery and furniture divided by full time employment created by the project does not exceed Rs. 1 lakh in plain areas and Rs.1.50 lakh in hilly areas.

(Vii) Rural Area

  1. Any area classified as Village as per the revenue record of the State/Union Territory, irrespective of population.
  2. It will also include any area even if classified as town, provided its population does not exceed 20,000 persons

Negative List of Activities:

The following list of activities will not be permitted under PMEGP for setting up of micro enterprises / projects /units.

  1. Any industry/business connected with Meat(slaughtered),i.e.processing, canning and/or serving items made of it as food,production/manufacturing or sale of intoxicant items like Beedi/Pan/Cigar/Cigarette etc., any Hotel or Dhaba or sales outlet serving liquor,preparation/producing tobacco as raw materials, tapping of toddy for sale.
  2. Any industry/business connected with cultivation of crops/plantation like Tea, Coffee, Rubber etc. sericulture (Cocoon rearing),Horticulture, Floriculture, Animal Husbandry like Pisciculture, Piggery,Poultry, Harvester machines etc.
  3. Manufacturing of Polythene carry bags of less than 20 microns thickness and manufacture of carry bags or containers made of recycled plastic for storing, carrying, dispensing or packaging of food stuff and any other item which causes environmental problems.
  4. Industries such as processing of Pashmina Wool and such other products like hand spinning and hand weaving, taking advantage of Khadi Programme under the purview of Certification Rules and availing sales rebate.
  5. Rural Transport (Except Auto Rickshaw in Andaman & Nicobar Islands, House Boat, Shikara & Tourist Boats in J&K and Cycle Rickshaw).



Khadi & Village Industries Commission (KVIC), Govt. of India



How To Apply

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