PMEGP Scheme: Eligibility, Subsidyand How to Apply
The Prime Minister's Employment Generation Programme (PMEGP) provides up to 35% government subsidy on project costs for new manufacturing and service enterprises. Learn who qualifies and how to apply.
What is the PMEGP Scheme?
The Prime Minister's Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme implemented by the Ministry of MSME through the Khadi and Village Industries Commission (KVIC). It aims to generate employment by helping individuals set up new micro-enterprises.
Under PMEGP, new manufacturing units can avail of project funding up to ₹25 Lakhs and service-sector enterprises up to ₹10 Lakhs. The government provides a subsidy of 15% to 35% of the project cost depending on the applicant category and location, while the applicant contributes 5% to 10% as their own margin money.
PMEGP is available across all states and union territories of India and is administered through KVIC, State Khadi and Village Industries Boards (KVIBs), and District Industries Centres (DICs). It does not support expansion of existing units — only new enterprises qualify.
Key Benefits of PMEGP
High Subsidy for Rural Areas
Rural applicants from general categories get 25% subsidy; SC/ST/Women/Minorities/Ex-servicemen and Differently Abled in rural areas get 35% subsidy.
Urban Subsidies Available
Urban general category applicants receive 15% subsidy; special categories (SC/ST/Women etc.) get 25% subsidy.
Low Own Contribution
General category beneficiaries contribute only 10% of the project cost; special categories contribute just 5%.
No Collateral for Small Loans
Projects up to ₹10 Lakhs under manufacturing and ₹5 Lakhs under service sector typically don't require collateral.
Wide Sector Coverage
Covers manufacturing, food processing, textile, handicrafts, agro-based industries, bio-technology and service sectors.
Government-Backed Credit
Bank loan component is backed by the government subsidy, improving approval chances significantly.
PMEGP Eligibility Criteria
To qualify for the PMEGP scheme, applicants must meet the following requirements. Only new enterprises are eligible — existing businesses cannot apply for PMEGP expansion.
Age
Minimum 18 years of age at the time of application.
Education
8th standard pass is mandatory for projects costing above ₹10 Lakhs.
New Units Only
Only new businesses qualify. Existing units, upgrades or expansions are not eligible.
Special Categories
SC/ST, Women, Ex-servicemen, Differently Abled, NER residents, Minorities and Hill/Border area residents get higher subsidies.
Institutions
Self Help Groups (SHGs), Charitable Trusts, and Institutions registered under Societies Registration Act 1860 are also eligible.
No Prior Beneficiary
Applicants who have already availed of government subsidy under any other scheme are not eligible.
Documents Required for PMEGP
Have these documents ready before applying on the PMEGP portal:
Identity Proof
Aadhaar card, PAN card, or Voter ID.
Address Proof
Bank passbook, electricity bill, or Aadhaar.
Project Report
Detailed Project Report (DPR) with cost estimates, revenue projections and market analysis.
Educational Certificate
8th standard certificate or higher (mandatory for projects above ₹10 Lakhs).
Caste/Category Certificate
SC/ST, OBC, minority or ex-serviceman certificate if claiming special category subsidy.
Udyam Registration
Udyam registration or proof of new enterprise intent.
Photographs
Recent passport-size photographs of the applicant.
How to Apply for PMEGP
Register on PMEGP Portal
Create an account on the official PMEGP e-Portal (kviconline.gov.in) and fill in your personal and enterprise details.
Prepare Your Project Report
Draft a detailed project report covering business plan, investment plan, employment projection and market feasibility.
Submit Application Online
Upload all required documents and submit your application online through the PMEGP portal.
Interview by Task Force
A Task Force committee (KVIC/KVIB/DIC) reviews your application and conducts an interview or field visit.
Bank Sanction & Margin Money
After committee approval, the bank sanctions the loan. You deposit your margin money contribution.
Subsidy Credited
Once the unit starts production, the subsidy amount is credited to your loan account by the bank within 3 years.
Register on PMEGP Portal
Create an account on the official PMEGP e-Portal (kviconline.gov.in) and fill in your personal and enterprise details.
Prepare Your Project Report
Draft a detailed project report covering business plan, investment plan, employment projection and market feasibility.
Submit Application Online
Upload all required documents and submit your application online through the PMEGP portal.
Subsidy Credited
Once the unit starts production, the subsidy amount is credited to your loan account by the bank within 3 years.
Bank Sanction & Margin Money
After committee approval, the bank sanctions the loan. You deposit your margin money contribution.
Interview by Task Force
A Task Force committee (KVIC/KVIB/DIC) reviews your application and conducts an interview or field visit.
Frequently Asked Questions
Need help with your PMEGP application?
Enego's advisors guide you from document preparation to bank sanction — maximising your subsidy and approval chances.