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PMEGP Scheme (Prime Minister’s Employment Generation Programme)

PMEGP SCHEME - Introduction

PMEGP Scheme (Prime Minister’s Employment Generation Programme) is a credit-linked subsidy programme initiated by the Government of India aimed at generating self-employment opportunities through the establishment and upgradation of micro-enterprises in both rural and urban areas. The scheme is administered by the Ministry of Micro, Small, and Medium Enterprises (MSME) and implemented through Khadi and Village Industries Commission (KVIC) as the single nodal agency.

PMEGP Scheme (Rapid Consulting)

Objectives

PMEGP aims to generate sustainable and continuous employment opportunities for a large segment of traditional and prospective artisans, rural and urban unemployed youth. The programme focuses on creating self-employment ventures in the non-farm sector, preventing the migration of rural youth to urban areas, and increasing the income and wage-earning capacity of artisans.

Quantum of Assistance

The grant-in-aid available under the PMEGP (Prime Minister’s Employment Generation Programme) includes financial assistance for both setting up new micro-enterprises and for upgrading existing units.

Here’s a detailed breakdown

For New Micro-Enterprises Subsidy Rates: Urban Areas: General category: 15% of the project cost. Special category (SC, ST, OBC, Minorities, Women, etc.): 25% of the project cost.

Rural Areas
General category: 25% of the project cost.
Special category: 35% of the project cost.

Maximum Project Cost
Manufacturing sector: 50 lakhs.
Service/Business sector: 20 lakhs.

Financial Assistance
The balance amount of the project cost, after excluding the beneficiary’s contribution, is provided by banks. For Upgrading Existing Units Subsidy Rates for Upgradation: Uniform subsidy of 15-20% by the government. For manufacturing units, the financial assistance can be up to ₹1.00 crore. For service/trading units, the assistance is capped at ₹25 lakhs.

Selection of Units
Units are selected based on performance metrics such as turnover and profit and must have repaid their first PMEGP/REGP/MUDRA loan on time.

Eligible Activities

PMEGP supports a wide array of activities excluding those listed in the negative list (e.g., meat processing, intoxicant products, etc.). The scheme promotes environmentally sustainable and socially inclusive ventures, particularly favouring projects that employ traditional skills and local resources.

Implementation Period

The current guidelines cover the 15th Finance Commission cycle, from 2021-2022 to 2025-2026, ensuring long-term implementation and impact assessment. The period is strategically planned to align with national economic cycles and developmental agendas.

Eligibility for New Micro Enterprises

Age Requirement: Any individual above 18 years of age.

Educational Qualification: For projects costing above ₹10 lakh in the manufacturing sector and above ₹5 lakh in the service sector, the applicant should have at least passed the 8th standard.

Residency: Both rural and urban residents are eligible.

Other Requirements: The applicant should not have availed benefits under any other subsidy-linked government schemes. Projects without capital expenditure are not eligible. The cost of land should not be included in the project cost. The scheme is applicable to all new viable micro-enterprises, including village industries but excludes activities listed in the negative list of the guidelines.

Eligibility for Upgrading Existing Units

Previous Loan Performance: The first loan under PMEGP/REGP/MUDRA should have been repaid successfully.

Operational Profitability: The unit must be profit-making with a good turnover and should demonstrate potential for further growth with modernization or technology upgrades.

Compliance with Previous Subsidy Schemes: The margin money (subsidy) availed under previous schemes must have been adjusted successfully.

Project Performance: There should be no default in meeting the financial obligations of the previous project.

General Conditions

Projects aimed at setting up new enterprises or upgrading existing ones in the manufacturing, services, or trading sector are eligible under the conditions stated. Certain activities like those associated with intoxicants, meat processing, and environmentally harmful products are excluded. Special emphasis is given to socially disadvantaged groups (SC/ST/OBC, minorities, women, ex-servicemen, physically challenged) offering them higher subsidy rates and lower contribution requirements.

Application and Documentation

Applications are processed online through a dedicated PMEGP portal, ensuring transparency and efficiency. Required documentation includes a detailed project report, caste certificate for special category beneficiaries, and proof of educational qualification among others.

Procedure for Disbursement and Appeals

Subsidy disbursement is linked to physical verification and successful project implementation, with funds transferred to the beneficiary’s account after verification. An online grievance redressal mechanism is established to handle appeals and disputes related to subsidy disbursements and project implementation.

Conclusion

PMEGP is a pivotal scheme aimed at fostering self-reliance among the youth by promoting micro-enterprises in India. The programme not only supports economic growth but also contributes to social equity by prioritizing disadvantaged groups and integrating them into the mainstream economic activities.

Rapid Consulting’s Role in Facilitating the Process

Rapid Consulting could offer specialized services to help entities set up infrastructure for micro-enterprises under PMEGP. They could guide stakeholders including government departments, PSUs, NGOs, cooperatives, SHGs, private companies, and FPOs through the scheme’s eligibility requirements, preparing and submitting applications, and ensuring compliance with the scheme’s guidelines. Their support would be aimed at maximizing financial incentives and ensuring efficient project implementation.

Impact of the Scheme on Industrial Growth

The PMEGP aims to stimulate economic growth by creating micro-enterprise ventures in rural and urban areas through the setting up of new self-employment ventures. By enhancing the infrastructure and providing financial support for new and existing enterprises, the scheme is expected to increase employment opportunities, integrate traditional artisans into the economy, and prevent migration from rural to urban areas.

Future Prospects and Enhancements

Future enhancements may include an increase in the financial support limits and an expansion of the types of businesses supported. The scheme could also see integration with other developmental programs to provide comprehensive growth support, enhancing the overall impact on industrial and economic development.

FAQs ?

What is the Prime Minister’s Employment Generation Programme (PMEG)?
PMEGP is a credit-linked subsidy program aimed at generating self-employment opportunities by establishing micro-enterprises in the non-farm sector.

Who is eligible for this scheme?
Any individual above 18 years, SHGs, charitable trusts, and institutions registered under the Societies Registration Act 1860 are eligible.

How does an entity apply for this scheme?
Entities need to apply online through the PMEGP e-portal where applications are processed and forwarded to the banks for credit decisions.

What are the financial benefits of participating in this scheme?
The scheme offers a subsidy of 15-35% on the project cost, depending on the location and the social category of the applicant. The maximum project cost under manufacturing is Rs. 25 lakhs and for the service sector is Rs. 10 lakhs.

What happens if incorrect information is provided in the application?
Incorrect or fraudulent information can lead to cancellation of financial support and legal action against the applicant.

How does Rapid Consulting assist in this process?
Rapid Consulting helps ensure that applicants meet all requirements from the initial application through to final approval and implementation, helping to avoid common pitfalls and efficiently manage documentation and compliance requirements.

Target Sectors in India

The Prime Minister’s Employment Generation Programme (PMEGP) targets the establishment of new micro enterprises and the expansion of existing ones in non-farm sectors across both rural and urban India. This initiative integrates the merger of earlier schemes to bolster employment through the creation of micro enterprises. The sectors covered are broad, aiming to include diverse non-farm activities to increase self-employment among artisans and unemployed youth, which will hopefully reduce migration from rural to urban areas.

Eligibility for Existing Businesses and New Ventures

Eligibility for the PMEGP scheme is extended to any individual over the age of 18, without income ceilings, encouraging wide participation. For projects exceeding certain cost thresholds in the manufacturing and service sectors, the applicant should have a minimum educational qualification of VIII standard pass. The scheme specifically excludes existing units that have previously availed government subsidies under other schemes, ensuring that the benefits are distributed to new entrants and projects.

Integration with Other Subsidies and Incentives

The scheme offers subsidy in the form of margin money, differentiated by general and special categories of beneficiaries and project location (urban or rural). Special emphasis is given to projects in northeastern states, hill states, and other identified backward regions, with higher rates of subsidy to stimulate economic growth in these areas.

Application Process: Applications must be submitted online through the PMEGP e-portal, accompanied by necessary documents such as project reports and educational qualifications. A detailed screening process ensures compliance with the technical and financial norms of the scheme, including a mandatory training in Entrepreneurship Development for beneficiaries, which is crucial for qualifying for the subsidy.

Geographical Preferences in India: The PMEGP prioritizes projects located in rural and backward areas, promoting the development of infrastructure where it is most needed to curb rural unemployment and stabilize regional economies. This strategic focus aligns with the government’s broader goals of balanced regional development and reduction of urban migration by providing sustainable employment opportunities in rural India.

Why Choose Rapid Consulting ?

Specialized Expertise: Our team at Rapid Consulting boasts in-depth knowledge of subsidy schemes, ensuring you get the most out of your investment.

End-to-End Assistance: From initial assessment to final application, we manage the entire process, making it seamless and hassle-free for your business.

Maximized Benefits: We ensure that you fully leverage the financial incentives available, boosting your company’s growth and profitability.

Our comprehensive service includes

Consultation and Eligibility Assessment: We conduct detailed consultations to understand clients’ business ideas and assess their eligibility for the PMEGP scheme. This involves evaluating project feasibility and alignment with PMEGP guidelines.

Documentation Preparation: Our team assists in preparing all necessary documentation required for the subsidy application. This includes business plans, financial projections, project reports, and other relevant information needed for submission to the implementing agencies.

Application Management: We manage the entire application process, ensuring all documents are submitted accurately and on time. Our experts liaise with the Khadi and Village Industries Commission (KVIC) or other implementing agencies to streamline the submission process.

Negotiation and Follow-up: We handle negotiations on behalf of our clients in case of any queries or requests for additional information from the implementing agencies. We ensure prompt responses and provide any further documentation required.

Subsidy Disbursement: Upon approval, we facilitate the disbursement of the subsidy amount to our clients. We ensure that all procedural formalities are completed smoothly for the timely release of funds.

Post-Subsidy Support: Our services extend beyond subsidy acquisition. We provide ongoing assistance to our clients, helping them with compliance requirements, reporting obligations, and any other post-subsidy concerns.

Rapid Consulting’s expertise and experience in navigating the complexities of the PMEGP scheme aim to maximize benefits and foster entrepreneurship among aspiring individuals. We are committed to supporting entrepreneurs in realizing their business aspirations and contributing to economic growth and employment generation.

How to Reach Us ?

Website: Visit our official website for detailed information, and service offerings, and to schedule an online consultation.

Direct Contact: Call us at +91-9467248028 / 9416506136 or email info@rapidconsulting.in to discuss your needs directly with our experts.

Office Visit: Our offices are open for in-person consultations at 134, Rapid Consulting, First floor Below Paysam Restaurant, Near Samsung Care. Lajpat Nagar, Rajgarh Road Hisar, Haryana-125001.

Here, you can meet with our consultants who can provide personalized guidance tailored to your business’s specific circumstances. Engage with Rapid Consulting today to leverage their expertise in enhancing your business’s financial and operational performance through the Collateral Free Credit Guarantee Scheme and other beneficial state initiatives. Whether online, over the phone, or in person, Rapid Consulting is ready to assist you in advancing your business goals in Haryana.

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