PRIME MINISTER EMPLOYMENT GENERATION PROGRAMME (PMEGP) SCHEME

What is PMEGP?

PMEGP is a central government scheme managed by the Ministry of Micro, Small, and Medium Enterprises (Mo MSME). It is carried out by the Khadi and Village Industries Commission (KVIC) and District Industries Centers (DICs).

Duration:

The scheme is available for five years, from FY 2021-22 to FY 2025-26.

Budget and Goals:

A budget of Rs. 13,554.42 crore has been approved for these five years. The goal is to set up 4 lakh new projects and create 30 lakh jobs.

Project Cost

To qualify for subsidies under the PMEGP scheme:

Manufacturing Units: The maximum allowable project cost is Rs. 50 lakh.
Service Units: The maximum allowable project cost is Rs. 20 lakh.

Note: The cost of land is not included in the project cost. If your project cost exceeds Rs. 50 lakh, you can still be eligible for a subsidy, but the subsidy will be limited to a project cost of up to Rs. 50 lakh only.

Quantum of Subsidy (New Units)

Categories of beneficiaries under PMEGP	Rate of Subsidy	Rate of Subsidy	Rate of Subsidy
Rate of Subsidy	Urban	Own Fund	Rural
General Category	15%	25%	10%
Special Category (Women, SC/ST/OBC/Ex-Servicemen)	25%	35%	5%

Note: Only individual applicants can apply for benefits under the PMEGP scheme. Partnership firms and companies are not eligible for this scheme.

Quantum of Subsidy (Upgradation of Existing Units)

Category	Project Cost	Rate of Subsidy
All Categories	10%	15%

Note:

For Manufacturing Sector Upgrades: The maximum project cost is Rs. 1 crore, with a maximum subsidy of Rs. 15 lakh.
For Service Sector Upgrades: The maximum project cost is Rs. 25 lakh, with a maximum subsidy of Rs. 3.75 lakh.

This means you can receive up to Rs. 15 lakh for manufacturing upgrades and up to Rs. 3.75 lakh for service sector upgrades.

Eligibility Conditions for Applicants:

Age Requirement: Must be an individual aged 18 years or older.
Educational Qualification: Applicants should have at least passed the 8th grade.
Family Limitation: Only one person from a family is eligible to apply (this includes either the individual or their spouse, but not both).

This ensures that all applicants meet the basic requirements and helps keep the scheme fair and accessible.

Main Criteria for Projects:

Location: Must be located in a rural area to qualify for rural project subsidies.
Investment Limit: The per capita fixed investment should not exceed Rs. 3 lakh.
Own Fund Contribution: Must meet the required own fund contribution (10% for manufacturing units and 5% for service units).
Negative List: The project must not be listed in the negative list of excluded sectors.
New Units: The project should be for a new unit, not an existing one.
Training Requirement: Completion of Entrepreneurship Development Programme (EDP) training is required.

These criteria help ensure that projects are eligible for support and meet the necessary guidelines for funding and development.

Bank Funding:

Collateral Security: Projects costing up to Rs. 10 lakh under PMEGP do not require any collateral security.
Collateral Guarantee: The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) provides collateral guarantees for projects up to Rs. 2 crore.
Subsidy Lock-in Period: The subsidy has a lock-in period of 3 years. After this period, the subsidy amount will be adjusted against the bank loan.

These terms make it easier to secure funding and manage your project’s financials.

Negative List:

The following types of businesses are not eligible for PMEGP support:

Meat-Related Businesses: Any business involving the processing or sale of meat.
Prohibited Activities: Activities banned by the local government.
Polythene and Carry Bags: Manufacturing or dealing with polythene or carry bags.
Crop Cultivation: Direct farming or cultivation of crops.
Animal Husbandry: Activities related to breeding or managing livestock.
Farming Activities: General farming operations.

These exclusions ensure that the scheme focuses on specific types of projects and sectors.

Documents Required:

To apply for PMEGP, you will need the following documents:

Aadhaar Card: Proof of identity.
PAN Card: For tax identification.
GST Certificate: Proof of Goods and Services Tax registration.
Photo: Recent passport-sized photograph.
Caste Certificate: For those applying under reserved categories.
Special Category Certificate: If applicable, such as for SC/ST/OBC.
Rural Area Certificate: To confirm the project location in a rural area.
Project Report: Detailed plan of your project.
EDP/Skill Development Training Certificate: Proof of completed entrepreneurship or skill development training.

These documents help verify your eligibility and support your application.

KIP : PMEGP Special Services

MSME Registration
GST Registration
Project Report
PMEGP Documentation
Submission of Application
Consultancy & Support for Banking
Subsidy Processing
Other Eligible Subsidy if any
Subsidy Updates
New Business Opportunity
GST Return Filing Services
Income-Tax Return Filing Services

For, more information on this you are requested to contact our KIP subsidy helpline on Mail – sales@kipfinancial.com and contact Number- +918683898080

KIP Financial Consultancy Pvt. Ltd.

DSB – 38, Red Square Market, Hisar – 125001 (HR)