What is the PMEGP Scheme?
Launched by the Ministry of Micro, Small and Medium Enterprises (MSME), the Prime Minister’s Employment Generation Programme (PMEGP) is a government-backed initiative that offers subsidies linked to business loans. At the national level, the scheme is overseen by the Khadi and Village Industries Commission (KVIC), while implementation at the state level is managed through KVIC offices, District Industries Centres (DICs), and partnered banks.
PMEGP aims to boost job creation in both rural and urban settings by offering financial assistance to individuals who want to start small or micro-level enterprises. It focuses on encouraging self-employment and grassroots entrepreneurship across the country.
Key Features of PMEGP
Loan and Subsidy
Up to ₹25 lakh for manufacturing and ₹10 lakh for service sector units.
Subsidy Rate
The scheme offers a government subsidy ranging from 15% to 35%, which varies based on the applicant’s category (such as general or special) and whether the business is set up in a rural or urban area.
Alsoread…
No Collateral
No collateral required for projects up to ₹10 lakh.
Interest Rate
Standard bank interest rates; subject to negotiation.
Repayment Tenure
Usually 3 to 7 years with a moratorium period.
Who Can Apply for PMEGP?
The PMEGP scheme welcomes participation from a broad spectrum of applicants, including aspiring entrepreneurs, small business owners, and members of recognized institutions or groups. Here’s a brief overview of eligibility:
- Individuals above 18 years of age with at least an 8th-grade education (for projects above ₹10 lakh in manufacturing or ₹5 lakh in service).
- Self-help groups (SHGs).
- Societies registered under Societies Registration Act, 1860.
- Production Co-operative Societies.
- Charitable Trusts.
Importantly, applicants should not have already availed benefits under any other central government subsidy-linked scheme.
Step-by-Step Guide: Starting a Business under PMEGP with Low Investment
Let’s break down the process of starting your own business using the PMEGP scheme, especially for those with limited funds.
1. Identify a Viable Business Idea
The first step is to choose a low-investment business idea that qualifies under PMEGP. The scheme supports a wide range of industries, such as:
- Agro-based industries (flour mills, organic farming)
- Service units (mobile repair shops, beauty parlours)
- Handicrafts (pottery, handmade soaps)
- Textile and garment units
- Food processing (pickle making, bakery)
Make sure the business idea is practical, scalable, and aligns with your skills and local demand.
2. Prepare a Project Report
A detailed project report (DPR) is essential. It should include:
- Business overview
- Estimated project cost
- Market analysis
- Profitability projections
- Employment generation potential
This document will be evaluated during your application process and by the lending bank.
3. Apply Online on PMEGP Portal
Visit the official PMEGP e-portal:
https://www.kviconline.gov.in/pmegp
Steps:
- Register as a new applicant
- Fill in your personal and project details
- Upload necessary documents (ID proof, education certificate, caste certificate if applicable, project report)
Make sure all information is accurate and verifiable.
4. Training and EDP (Entrepreneurship Development Programme)
If your application is accepted, you’ll need to undergo a mandatory 10-day EDP training conducted by KVIC or any recognized institution. This training equips you with basic entrepreneurial skills such as business planning, legal compliance, marketing, and bookkeeping.
5. Loan Sanction and Disbursement
Once training is completed, your application is sent to a partner bank for loan processing. If approved:
- Bank sanctions the loan amount
- Government subsidy is credited to a special account
- You receive the loan minus subsidy, which remains in lock-in for 3 years
This financial support allows you to start your business without heavy personal investment.
Tips for Success
Starting a business is just the beginning. Here are a few tips to make your PMEGP-funded business successful:
Focus on Market Research
Understand your customer base and competition. Local demand plays a key role in success.
Start Small and Scale
Keep initial costs low, use profits to grow gradually. Avoid taking unnecessary financial risks early on.
Maintain Financial Discipline
Keep proper records of income and expenses. This will help with loan repayment and future expansion.
Promote Digitally
Use social media platforms like Instagram, WhatsApp Business, and Facebook to reach local customers. Even small village-based businesses benefit from online visibility.
Common Low-Investment Businesses under PMEGP
Here are some practical and popular businesses you can start with minimal capital under PMEGP:
| Business Idea | Approx. Investment | Suitable For |
|---|---|---|
| Tailoring Unit | ₹1–2 lakh | Urban & Rural |
| Candle/Soap Making | ₹2–3 lakh | Home-based |
| Mobile Repair Shop | ₹2 lakh | Semi-urban areas |
| Pickle/Papad Unit | ₹1.5 lakh | Women entrepreneurs |
| Beauty Parlour | ₹2–3 lakh | Urban & Rural |
| Agarbatti Making | ₹1–2 lakh | Rural areas |
These ventures often require basic skills and tools, and the return on investment can be seen in a few months with good execution.
Advantages of PMEGP for First-Time Entrepreneurs
- Access to formal credit for those without collateral
- Government subsidy reduces repayment burden
- Encourages self-employment and job creation
- Supports rural development and women empowerment
- Opens the door to other MSME benefits (such as Udyam Registration)
Conclusion
The Prime Minister’s Employment Generation Programme is a powerful enabler for aspiring entrepreneurs who want to start a business with low investment. With a clear idea, proper planning, and the right approach, you can establish a profitable business under this scheme.
PMEGP not only provides financial support but also empowers you with training and guidance. It’s an excellent opportunity to become self-reliant and contribute to local employment and economic growth.
Whether you’re a student, homemaker, or unemployed youth, now is the time to turn your ideas into action. Discover how PMEGP can support your business goals and begin your path toward becoming a self-reliant entrepreneur.
Frequently Asked Questions
What is the PMEGP scheme and who launched it?
The Prime Minister’s Employment Generation Programme (PMEGP) is a government initiative launched by the Ministry of Micro, Small and Medium Enterprises (MSME) to promote self-employment by providing financial assistance to individuals who want to start micro or small enterprises.
How much subsidy can I get under PMEGP?
Applicants can receive a government subsidy ranging between 15% to 35%, depending on their social category and whether the business is located in a rural or urban area.
What is the maximum loan amount I can apply for under PMEGP?
For manufacturing businesses, you can apply for up to ₹25 lakh. For service-based businesses, the limit is ₹10 lakh.
Is collateral security required for a PMEGP loan?
No collateral is required for projects up to ₹10 lakh, making it ideal for first-time entrepreneurs without assets to pledge.
Who is eligible to apply for PMEGP?
Indian citizens aged 18 and above with at least an 8th-grade education (for higher-value projects) are eligible. Self-help groups, co-operative societies, registered trusts, and societies are also qualified.
