The approval of projects under the government’s flagship Prime Minister’s Employment Generation Programme (PMEGP), implemented by the Khadi and Village Industries Commission (KVIC), increased 44 per cent between April and August 18 compared to last year.

KVIC has approved and forwarded 1.03 lakh project applications to the financing banks as compared to 71,556 projects during the corresponding period last year.

During April-August in 2020, financing banks sanctioned 11,191 projects and a Rs 345.43-crore margin money was disbursed to applicants as compared to the Rs 276.09-crore margin money disbursed for 9,161 projects in the first five months of the previous year.

The number of sanctioned projects by banks thus increased 22 per cent, while the disbursement of margin money by the KVIC rose 24 per cent as compared to the previous year.

In April, the ministry of MSME amended the guidelines to away with the role of the District Level Task Force Committee in approving the PMEGP projects.

Prime Minister’s Employment Generation Programme

It is a major credit-linked subsidy programme aimed at generating self-employment opportunities through establishment of micro-enterprises in the non-farm sector by helping traditional artisans and unemployed youth.

PMEGP was launched in 2008 by merging two schemes — Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) — for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas. 

PMEGP is being implemented by Khadi and Village Industries Commission (KVIC), State Khadi and Village Industries Board (KVIB) and District Industries centres (DIC). Under the scheme, loan is being provided by all public sector banks, selected private sector banks and co-operative banks with margin money subsidy being given by ministry of MSME through KVIC.

Objectives of PMEGP

1) To generate employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures. 

2) To bring together widely dispersed traditional artisans, rural and urban unemployed youth and give them self-employment opportunities to the extent possible, at their place. 

3) To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth in the country, so as to help arrest migration of rural youth to urban areas.

4) To increase the wage earning capacity of artisans.

5) Contribute to increase in the growth rate of rural and urban employment.

The maximum cost of the project/unit admissible in the manufacturing sector is Rs 25 lakh and in the business/service sector is Rs 10 lakh. 

Any individual above 18 years of age is eligible for applying under the scheme. General category beneficiaries can avail margin money subsidy of 25 per cent of the project cost in rural areas and 15 per cent in urban areas. 

Further, ministry of MSME introduced a new component of second financial assistance for expansion/upgrading the existing PMEGP/MUDRA units for manufacturing units up to Rs 1 crore and for service/trading units up to Rs 25 lakh with subsidy of 15 per cent from the year 2018-19.

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