PMEGP is implemented by Khadi and Village Industries Commission (KVIC) functioning as the nodal agency at the national level. At the state level, the scheme is implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs), District Industries Centers (DICs) and banks.

1. Conceive a business idea to start a new enterprise in manufacturing or service sector.

2. Identify suitable location, building, plant and machinery etc. of your venture.

3. Make a Project Report/ Business Plan, so that you can enter the details in the application.

4. Apply online through

5. Participate in the interview by DLTFC (District Level Task Force Committee) who will evaluate your project and if found eligible, will forward to banks concerned.

6. Contact bank with relevant documents and convince them the potential of the project, so that they will sanction the loan and you have to deposit beneficiary’s contribution.

7. You have to attend a mandatory EDP training (FREE) for 10 days.

8. You will get the subsidy/ margin money on production of the training certificate at the bank. The subsidy amount will be kept in a TDR (Term Deposit Receipt) for 3 years.

9. The subsidy will be credited to your account only after three years of first disbursement, after ensuring the unit is still working; but you don’t need to pay interest to this amount from the date of receipt of subsidy.

General category 15%(Urban), 25%(Rural), Special 25%(Urban), 35%(Rural)
(including SC/ ST/ OBC/ Minorities/Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas, etc.)

PMEGP in Detail

It is a Government of India Scheme introduced in 2008. The nodal agency of the scheme is Khadi and Village Industries Commission (KVIC). At the State level, the Scheme will be implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) .

Objective of the Scheme

The main objective of the scheme is to generate employment opportunities in rural as well as urban areas of the country through setting up of new self – employment ventures/ projects/ micro enterprises.

Eligibility Conditions of Beneficiaries:

  1. Any individual, above 18 years of age
  2. There will be no income ceiling for assistance for setting up projects under PMEGP.
  3. For setting up of project costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business /service sector, the beneficiaries should possess at least VIII standard pass educational qualification.
  4. Assistance under the Scheme is available only for new projects sanctioned specifically under the PMEGP.
  5. Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme) are also eligible for assistance under PMEGP.
  6. Institutions registered under Societies Registration Act,1860;
  7. Production Co-operative Societies, and Charitable Trusts.
  8. Existing Units (under PMRY, REGP or any other scheme of Government of India or State Government) and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are not eligible.

Rate of Subsidy (of project cost)

  • Location of Enterprise General Category Special Category
  • Urban 15 % 25 %
  • Rural 25 % 35 %
  • Special Category – SC, ST, OBC, Women, Minorities, Ex-Servicemen, Physically challenged, NER, Hill and Boarder areas etc.

Beneficiery’s Contribution:

  • General Category- 10 %
  • Special category- 5 %
  • The maximum cost of the project/unit admissible under manufacturing sector is Rs. 25 lakh.
  • The maximum cost of the project/unit admissible under business/service sector is Rs. 10 lakh. The balance amount of the total project cost will be provided by Banks as term loan

Bank Finance

The Bank will sanction 90 % of the project cost in case of General Category of Beneficiary /institution and 95% in case of special category of the beneficiary/institution, and disburse full amount suitably for setting up of the project.

  • Bank will finance Capital Expenditure in the form of Term Loan and Working Capital in the form of cash credit.
  • Negative List of Activities
  • The following list of activities will not be permitted under PMEGP for setting up of micro enterprises/ projects /units.
    • Any industry/ business connected with Meat(slaughtered), i.e. processing, canning and/or serving items made of it as food, production/manufacturing or sale of intoxicant items like Beedi/Pan/ Cigar/Cigarette etc., any Hotel or Dhaba or sales outlet serving liquor, preparation/producing tobacco as raw materials, tapping of toddy for sale.
    • Any industry/business connected with cultivation of crops/plantation like Tea, Coffee, Rubber etc. sericulture (Cocoon rearing), Horticulture, Floriculture. Value addition under these will be allowed under PMEGP
    • Any industry/business connected with Animal Husbandry like Pisciculture, Piggery,Poultry, etc.
    • Manufacturing of Polythene carry bags of less than 20 microns thickness and manufacture of carry bags or containers made of recycled plastic for storing, carrying, dispensing or packaging of food stuff and any other item which causes environmental problems.