{"id":13958,"date":"2026-05-27T07:33:19","date_gmt":"2026-05-27T07:33:19","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/pmegp-scheme\/"},"modified":"2026-05-27T07:33:19","modified_gmt":"2026-05-27T07:33:19","slug":"pmegp-scheme","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/pmegp-scheme\/","title":{"rendered":"PMEGP Scheme: Generating Self-Employment in India"},"content":{"rendered":"<h1 id=\"pmegp-scheme-a-practical-guide-for-entrepreneurs\">PMEGP Scheme: A Practical Guide for Entrepreneurs<\/h1>\n<p>The Prime Minister&#x2019;s Employment Generation Programme (PMEGP) is a government scheme to support new ventures and create jobs. It offers credit-linked subsidies to new entrepreneurs. Indian first-time business owners use PMEGP to start their ventures with government support.<\/p>\n<p>This guide explains how PMEGP works.<\/p>\n<h2 id=\"what-is-pmegp\">What Is PMEGP?<\/h2>\n<p>PMEGP merges two earlier schemes (REGP and PMRY). The scheme offers:<\/p>\n<ul>\n<li>Bank loans for new ventures<\/li>\n<li>Subsidy from the government<\/li>\n<li>Focus on micro enterprises<\/li>\n<\/ul>\n<p>The scheme is run by KVIC (Khadi and Village Industries Commission), KVIB (Khadi and Village Industries Board), and DIC (District Industries Centre).<\/p>\n<h2 id=\"pmegp-loan-limits\">PMEGP Loan Limits<\/h2>\n<p>Project cost limits:<\/p>\n<ul>\n<li>Manufacturing units: up to &#x20B9;50 lakh<\/li>\n<li>Service or <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/trading\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">trading<\/a> units: up to &#x20B9;20 lakh<\/li>\n<\/ul>\n<p>The borrower puts in own contribution. The bank lends the rest. The government provides a subsidy.<\/p>\n<h2 id=\"subsidy-rates\">Subsidy Rates<\/h2>\n<p>The subsidy depends on location and category:<\/p>\n<h3 id=\"urban-area\">Urban Area<\/h3>\n<ul>\n<li>General category: 15 percent<\/li>\n<li>Special category (SC, ST, OBC, women, etc.): 25 percent<\/li>\n<\/ul>\n<h3 id=\"rural-area\">Rural Area<\/h3>\n<ul>\n<li>General category: 25 percent<\/li>\n<li>Special category: 35 percent<\/li>\n<\/ul>\n<p>This subsidy lowers the total loan burden.<\/p>\n<h2 id=\"why-pmegp-matters\">Why PMEGP Matters<\/h2>\n<p>PMEGP matters for three reasons:<\/p>\n<ol>\n<li>It offers government subsidy<\/li>\n<li>It supports first-time entrepreneurs<\/li>\n<li>It creates rural and urban employment<\/li>\n<\/ol>\n<p>A clean PMEGP loan supports new ventures.<\/p>\n<h2 id=\"eligibility\">Eligibility<\/h2>\n<p>The scheme is open to:<\/p>\n<ul>\n<li>Indian citizens aged 18 and above<\/li>\n<li>Class 8 pass (for projects above &#x20B9;10 lakh in manufacturing, or above &#x20B9;5 lakh in service)<\/li>\n<li>No income limit<\/li>\n<li>Setting up a new venture<\/li>\n<\/ul>\n<p>The simple criteria help wide participation.<\/p>\n<h2 id=\"common-uses\">Common Uses<\/h2>\n<p>Entrepreneurs use PMEGP for:<\/p>\n<ul>\n<li>Small manufacturing units<\/li>\n<li>Service businesses<\/li>\n<li>Trading ventures<\/li>\n<li>Food processing<\/li>\n<li>Handicrafts and khadi<\/li>\n<\/ul>\n<p>The scope is wide.<\/p>\n<h2 id=\"how-to-apply\">How to Apply<\/h2>\n<p>A common method:<\/p>\n<ol>\n<li>Apply online at the KVIC portal<\/li>\n<li>Submit project report and personal details<\/li>\n<li>Get selection through district screening<\/li>\n<li>Bank reviews and approves the loan<\/li>\n<li>Government releases subsidy<\/li>\n<\/ol>\n<p>The process can take a few months.<\/p>\n<h2 id=\"documents-needed\">Documents Needed<\/h2>\n<p>Common documents:<\/p>\n<ul>\n<li>KYC<\/li>\n<li>Caste certificate (for special category)<\/li>\n<li>Project report<\/li>\n<li>Education proof if needed<\/li>\n<li>Address proof<\/li>\n<\/ul>\n<p>The list is straightforward.<\/p>\n<h2 id=\"benefits\">Benefits<\/h2>\n<p>PMEGP offers:<\/p>\n<ol>\n<li>Government subsidy<\/li>\n<li>Bank loan support<\/li>\n<li>Training options through KVIC<\/li>\n<li>Focus on local employment<\/li>\n<\/ol>\n<p>These benefits support new businesses.<\/p>\n<h2 id=\"risks\">Risks<\/h2>\n<p>Risks include:<\/p>\n<ul>\n<li>Repayment pressure after the moratorium<\/li>\n<li>Project execution risk<\/li>\n<li>Subsidy delays<\/li>\n<li>Bank approval timelines<\/li>\n<\/ul>\n<p>A clear plan helps manage these.<\/p>\n<h2 id=\"interest-rates\">Interest Rates<\/h2>\n<p>Rates depend on:<\/p>\n<ul>\n<li>Bank&#x2019;s MCLR<\/li>\n<li>Borrower profile<\/li>\n<li>Project size<\/li>\n<\/ul>\n<p>Rates are usually similar to regular <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/bank-rate\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">bank rate<\/a>s.<\/p>\n<h2 id=\"repayment\">Repayment<\/h2>\n<p>PMEGP loans usually allow:<\/p>\n<ul>\n<li>Tenure up to 7 years<\/li>\n<li>Moratorium during project setup<\/li>\n<\/ul>\n<p>This eases early-stage <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/cash-flow\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">cash flow<\/a>.<\/p>\n<h2 id=\"common-mistakes\">Common Mistakes<\/h2>\n<p>Borrowers often:<\/p>\n<ul>\n<li>Skip detailed project planning<\/li>\n<li>Overestimate <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/revenue\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">revenue<\/a><\/li>\n<li>Miss subsidy claim steps<\/li>\n<li>Use funds for non-business needs<\/li>\n<\/ul>\n<p>A clean plan avoids these errors.<\/p>\n<h2 id=\"tips-for-better-use\">Tips for Better Use<\/h2>\n<p>A few habits help:<\/p>\n<ol>\n<li>Build a strong project report<\/li>\n<li>Take KVIC training<\/li>\n<li>Keep books and records<\/li>\n<li>Pay on time<\/li>\n<li>Use the subsidy correctly<\/li>\n<\/ol>\n<h2 id=\"edp-training\">EDP Training<\/h2>\n<p>PMEGP makes Entrepreneurship Development Programme (EDP) training mandatory before loan disbursement. The training:<\/p>\n<ul>\n<li>Builds business skills<\/li>\n<li>Helps with planning<\/li>\n<li>Improves chances of success<\/li>\n<\/ul>\n<p>Use this support fully.<\/p>\n<h2 id=\"pmegp-vs-mudra-loan\">PMEGP vs Mudra Loan<\/h2>\n<p>The two differ:<\/p>\n<ul>\n<li>Mudra: smaller loans, no subsidy<\/li>\n<li>PMEGP: medium loans with subsidy, new ventures only<\/li>\n<\/ul>\n<p>Each suits different stages and needs.<\/p>\n<h2 id=\"pmegp-vs-stand-up-india\">PMEGP vs Stand Up India<\/h2>\n<p>The two differ:<\/p>\n<ul>\n<li>Stand Up India: larger loans for SC\/ST and women<\/li>\n<li>PMEGP: open to all with subsidy<\/li>\n<\/ul>\n<p>Both support entrepreneurship.<\/p>\n<h2 id=\"sectors-excluded\"><a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/sector\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Sector<\/a>s Excluded<\/h2>\n<p>PMEGP does not cover:<\/p>\n<ul>\n<li>Agriculture<\/li>\n<li>Tobacco-related businesses<\/li>\n<li>Some specific industries<\/li>\n<\/ul>\n<p>Confirm the list before applying.<\/p>\n<h2 id=\"key-takeaways\">Key Takeaways<\/h2>\n<ul>\n<li>PMEGP supports new ventures with credit and government subsidy<\/li>\n<li>Project cost up to &#x20B9;50 lakh (manufacturing) and &#x20B9;20 lakh (service)<\/li>\n<li>Subsidy ranges from 15 to 35 percent<\/li>\n<li>Targets first-time entrepreneurs<\/li>\n<li>Indian micro businesses should explore the scheme<\/li>\n<\/ul>\n<p>PMEGP turns small business ideas into reality. Apply with a clear plan, use training, and let government support help build your venture.<\/p>\n<h2 id=\"pmegp-and-job-creation\">PMEGP and Job Creation<\/h2>\n<p>The scheme focuses on creating employment, especially in rural areas. New units must show projected job creation in the proposal.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>PMEGP Scheme: A Practical Guide for Entrepreneurs The Prime Minister&#x2019;s Employment Generation Programme (PMEGP) is a government scheme to support new ventures and create jobs. It offers credit-linked subsidies to new entrepreneurs. Indian first-time business owners use PMEGP to start their ventures with government support. This guide explains how PMEGP works. What Is PMEGP? PMEGP [&#x2026;]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-13958","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"PMEGP Scheme: A Practical Guide for Entrepreneurs The Prime Minister&#x2019;s Employment Generation Programme (PMEGP) is a government scheme to support new ventures and create jobs. It offers credit-linked subsidies to new entrepreneurs. Indian first-time business owners use PMEGP to start their ventures with government support. This guide explains how PMEGP works. What Is PMEGP? PMEGP&hellip;","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/13958","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/13958\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=13958"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}