Prime Minister's Employment Generation Programme (PMEGP)

Prime Minister’s Employment Generation Programme (PMEGP) stands out as a flagship credit linked subsidy scheme to empower aspiring entrepreneurs in India. Implemented by the Ministry of Micro, Small and Medium Enterprises (MSME) and the Khadi and Village Industries Commission (KVIC) in August 2008, the scheme offers financial support and assistance to help you establish new micro-enterprises.

If you’re an ambitious entrepreneur looking to build and grow your business, understanding everything about the PMEGP Scheme 2025 will help you immensely in securing financial resources.

What is the PMEGP Scheme?

The Prime Minister’s Employment Generation Programme (PMEGP) is a scheme that offers financial assistance to business owners who are aiming to establish new micro-enterprises in both manufacturing and service sectors. The scheme combines both a bank loan with a government subsidy, which significantly reduces the financial burden. You get the loan having a certain amount as a subsidy, which you don’t need to repay.

Objectives of the PMEGP Scheme

• By supporting new businesses, PMEGP aims to generate self-employment and create job opportunities in both rural and urban areas.
• It encourages the growth of traditional and village industries, helping local crafts and skills survive and thrive.
• The scheme especially focuses on supporting businesses in rural areas, leading to balanced regional development.

Key Features of the Prime Minister Employment Generation Programme

• It’s designed exclusively for new businesses.
• You get a loan + subsidy combo, making it easier for you to secure funding and reduce your financial burden.
• The scheme is open to both urban and rural applicants, ensuring everyone has a chance to benefit from it.
• The scheme is run by KVIC, DIC, and KVIB under the Ministry of MSME, hence, you can trust that it's a well-established and supported program.
• You can submit online applications year-round, so you can apply whenever you’re ready to take the next step.

Subsidy Breakdown for PMEGP Scheme 2025

One of the standout features of the PMEGP Scheme is the attractive subsidy provided on project costs. This significantly reduces the upfront capital burden, making it easier for you to get your business off the ground without a heavy financial strain.

I. For Setting Up New Enterprises

Note:

• Special categories such as SC, ST, OBC, Minorities, Women, Ex-Servicemen, Transgenders, Differently-abled individuals, NER, Aspirational Districts, and Hill and Border areas are eligible for additional support.
• Once your project is approved and the disbursement is made, the PMEGP subsidy claim is processed to further reduce your financial burden.
• The subsidy is credited as margin money to your project allowing you to avail of a bank loan for the remaining amount. This helps make your business setup much more affordable and accessible.

II. 2nd Loan for Upgradation of Existing PMEGP/MUDRA Units

If you already have a business established under the PMEGP Scheme or through Mudra loans, you can apply for a second loan specifically for the upgradation and expansion of your existing unit. This option is designed to help you modernize operations, boost productivity, and scale your business without worrying about finances. 

For upgradation purposes: 

• In the manufacturing sector, the maximum project cost eligible for the margin money subsidy is Rs. 1 crore.
• For the business or service sector, the maximum admissible project cost is Rs. 25 lakh.

Loan & Repayment Terms of PMEGP Scheme

• Loan Amount
  You can avail up to Rs. 50 lakh for the manufacturing sector and up to Rs. 20 lakh for the service sector.
• Interest Rate
  The interest rate is set as per the bank’s prevailing rate at the time of application.
• Repayment Period
  You’ll have 3 to 7 years to repay the loan, with a 6-month moratorium period to give you time to stabilize your business.
• No Collateral
  For loans up to Rs. 10 lakh, you won’t be required to provide any collateral.

Business Types Allowed Under PMEGP

You can apply for new, viable projects in the following areas:

• Manufacturing units, including pottery, printing, garment making, handicrafts, and more.
• Service businesses, like salons, mobile repair, catering, and similar services.
• Agro-processing, such as spice grinding, pickle making, juice extraction, and food preservation.

Note:

PMEGP does not support the following businesses:

• Production, manufacturing or sale of intoxicant items
• Industries or businesses connected with meat processing
• Businesses related to liquor, tobacco, and similar products.

Make sure your business aligns with the right categories to avoid rejection during the application process!

Eligibility Criteria for PMEGP Loan

The PMEGP scheme targets a broad range of beneficiaries. Take a quick look at where you fit in the PMEGP loan eligibility criteria.

Eligibility

• You must be 18 years or older (with a minimum of 8th-grade education if your project is above Rs. 10 lakh in manufacturing or Rs. 5 lakh in services).
• Self-Help Groups are eligible, as long as they aren’t linked to other subsidy schemes.
• Charitable trusts, co-operative societies, and institutions under the Societies Registration Act, 1860 can apply.
• Only first-time entrepreneurs can benefit from this scheme.
• If you’re planning a non-farm-based micro-enterprise in manufacturing or services, this scheme is for you!

Non-eligibility

• Existing businesses are not eligible.
• Those who are already availing of other government subsidies cannot apply.
• Applicants with a poor credit or repayment history won’t be considered.
• Agricultural (farm-based primary activities) businesses are excluded from this scheme.

If you meet these eligibility criteria, you’re on the right path to securing financial support for your new venture!

Documents Required for PMEGP Loan

Here is a PMEGP loan documents list to ensure your application passes scrutiny without delays.

• Aadhaar card & PAN card
• Educational qualification proof (if applicable)
• Caste certificate (for claiming a higher subsidy)
• Project report with cost breakdown
• Rent/ownership proof of business premises
• Udyam registration (preferred)
• A recent passport-size photo

How to Apply for a PMEGP Loan Online?

To apply for PMEGP online, follow these simple steps:

Step 1: Visit the official KVIC PMEGP portal at: https://www.kviconline.gov.in/pmegpeportal/pmegphome/index.jsp
Step 2: Click on the ‘Apply’ tab under Application for the new unit.
Step 3: Complete your PMEGP online registration by filling out the application form.
Step 4: Upload all the required documents as per the instructions.
Step 5: Submit your application and make sure to note down your PMEGP login credentials for tracking.
Step 6: Regularly check the PMEGP online application status to stay updated on your progress.
Step 7: In case of any difficulties, you can reach out to the official PMEGP helpline number for support.

Note: You can apply offline as well through a physical application by downloading the form from the website. Complete it and submit it at the nearest nodal office or implementing agency office. Make sure to collect the acknowledgement slip after submission.

Benefits of the PMEGP Scheme

• Get Financial Help to Start a Business
  You receive a subsidy from the government and low-interest loans to set up your own small business or micro-enterprise in the non-farm sector.
• No Collateral for Smaller Loans
  For projects up to ₹10 lakh, you don’t need to provide any collateral security, reducing your risk and paperwork.
• Boosts Employment and Reduces Migration
  By supporting new businesses, the scheme creates jobs locally, especially for unemployed youth and artisans, helping to reduce migration from villages to cities.

• Fair and Inclusive
  The eligibility criteria are simple, and special categories like SC/ST, women, minorities, and ex-servicemen get higher subsidies.

Real-World Examples of PMEGP

• Readymade Garment Manufacturing Unit
• Brass Metal Handicrafts Business
• DTP and Offset Printing Press
• Pickles, Juice, Jam, and Marmalade Manufacturing Unit
• Spices Mill
• Bricks Manufacturing Unit
• Women-led Micro and Small Enterprises
• Food Processing Business

Related Government Support Plans with PMEGP Scheme

PMEGP can be strategically combined or aligned with other government schemes for greater impact:

Final Words

The PMEGP Scheme 2025 presents a fantastic opportunity for you as an aspiring business owner to secure affordable financing along with a valuable government subsidy. With the convenience of digital application through the KVIC PMEGP portal and the extensive support from the government, there’s no reason to wait—apply for PMEGP online today.

Empower your dream, build your enterprise, and contribute to India’s economic growth by making the most of the PMEGP