The Indian government has approved a new program called the Prime Minister's Employment Generation Programme (PMEGP). This comprehensive policy covers a spectrum of potential hazards including workplace injuries, illnesses, disabilities, and even fatalities. The Ministry of Micro, Small and Medium Enterprises (MoMSME) will oversee this centrally-funded program. The Khadi and Village Industries Commission (KVIC), a statutory body under MoMSME, will manage it nationally.
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At the state level, implementation will involve State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs), District Industries Centres (DICs), and banks. Government subsidies will be channeled through KVIC and distributed to beneficiaries' bank accounts by identified banks. Implementing agencies such as KVIC, KVIBs, and DICs will collaborate with NGOs, autonomous institutions, Self Help Groups (SHGs), National Small Industries Corporation (NSIC), and other relevant bodies to identify beneficiaries, develop viable projects, and provide entrepreneurship training.
Objectives of PMEGP
The objectives of the Prime Minister's Employment Generation Programme (PMEGP) are as follows:
Create job opportunities in both rural and urban areas by establishing new self-employment ventures, projects, and micro-enterprises.
Bring together traditional artisans and unemployed youth from rural and urban areas, providing them with self-employment opportunities.
Ensure continuous and sustainable employment for traditional artisans and unemployed youth, aiming to prevent rural-to-urban migration.
Enhance the earning potential of artisans and contribute to the growth of rural and urban employment rates.
Quantum and Nature of Financial Assistance
Levels of funding under PMEGP
Categories of beneficiaries under PMEGP
Beneficiary's contribution (of project cost)
Rate of Subsidy (of project cost)
Area (location of project/unit)
Urban
Rural
General Category
10%
15%
25%
Special (including SC / ST / OBC /Minorities/Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas etc.)
5%
25%
35%
Important Notes:
For projects in the manufacturing sector, the maximum allowable cost is Rs. 25 lakh.
For projects in the business or service sector, the maximum allowable cost is Rs. 10 lakh.
Banks will provide the remaining funds required for the total project cost as a term loan.
Eligibility Criteria for Beneficiaries:
Individuals aged 18 years and above are eligible.
There is no income limit for project assistance under PMEGP.
For projects costing over Rs. 10 lakh in manufacturing or over Rs. 5 lakh in business/service sectors, beneficiaries must have at least an eighth-grade educational qualification.
Assistance is exclusively available for new projects sanctioned under PMEGP.
Self Help Groups, including those from Below Poverty Line (BPL) backgrounds who haven't benefited from other schemes, are eligible.
Institutions registered under the Societies Registration Act, 1860, Production Co-operative Societies, and Charitable Trusts are eligible.
Existing units under previous government schemes or those who've already received government subsidies are not eligible.
Additional Eligibility Conditions:
Beneficiaries belonging to special categories must provide a certified copy of caste/community certificate or relevant document issued by the competent authority, along with the Margin Money (subsidy) Claim to the respective bank branch.
Institutions must provide certified copies of their bye-laws when necessary.
Project cost covers Capital Expenditure and one cycle of Working Capital. Projects without Capital Expenditure are not eligible. Projects over Rs. 5 lakh without working capital require clearance from the Regional Office or Controller of the Bank's Branch.
Land cost should not be included in the project cost. However, the cost of ready-built or leased workspaces can be included, limited to a maximum period of 3 years.
PMEGP applies to all new viable micro enterprises, excluding activities listed in the negative list of Village Industries. Existing units are ineligible. Note:
Notes
Institutions registered as special categories (SC/ST/OBC/Women/Physically Handicapped/Ex-Servicemen and Minority Institutions) in their bye-laws are eligible for special category Margin Money (subsidy). Others are eligible under the general category.
Only one person per family can receive financial assistance under PMEGP. "Family" includes the individual and their spouse.
Implementing Agencies
5.1: Khadi and Village Industries Commission (KVIC), headquartered in Mumbai, will serve as the sole nodal agency at the national level for PMEGP. State-level implementation will be managed by State Directorates of KVIC, State Khadi and Village Industries Boards (KVIBs), and District Industries Centres (DICs) in rural areas. In urban areas, State District Industries Centres (DICs) will handle implementation. KVIC will coordinate with State KVIBs/State DICs and oversee performance monitoring in both rural and urban regions. Additionally, KVIC and DICs will collaborate with other entities such as NSIC, Udyami Mitras under RGUMY, Panchayati Raj Institutions, and reputable NGOs for beneficiary identification.
5.2 Other Agencies:
Field Offices of KVIC and its State offices
State Khadi and Village Industries Boards
District Industries Centre (DIC) of all State Governments/Union Territories Administrations reporting to respective Commissioners/Secretaries (Industries)
Banks/Financial Institutions
Khadi and Village Industries Federation
Department of Women and Child Development (DWCD), Nehru Yuva Kendra Sangathan (NYKS), The Army Wives Welfare Association of India (AWWA), and Panchayati Raj Institutions
NGOs with at least five years of experience in Project Consultancy in Small Agro & Rural Industrial Promotion, Technical Consultancy Services, Rural Development, and Social Welfare, funded by State or National Level Government Agencies in the preceding 3 years
Professional Institutions/Technical Colleges recognized by Government/University, UGC/AICTE providing skill-based training
Certified Khadi and Village Industries institutions aided by KVIC/KVIB with required infrastructure, manpower, and expertise
Departmental and Non-Departmental Training Centers of KVIC/KVIBs
MSME-DIs, MSME Tool Rooms, and Technical Development Centers under the administrative control of Office of Development Commissioner, MSME
NSIC offices, Technical Centers, Training Centers, Incubators, and Training cum Incubation Centers set up in PPP Mode
National level Entrepreneurship Development Institutes such as NIESBUD, NIMSME, and IIE, Guwahati, and their branches and EDCs set up by their Partner Institutions
Udyami Mitras under Rajiv Gandhi Udhyami Mitra Yojana of Ministry of MSME
PMEGP Federation, if established.
Financial Institutions eligible to participate in PMEGP include:
27 Public Sector Banks.
All Regional Rural Banks.
Co-operative Banks approved by the State Level Task Force Committee chaired by the Principal Secretary (Industries)/Commissioner (Industries).
Private Sector Scheduled Commercial Banks approved by the State Level Task Force Committee chaired by the Principal Secretary (Industries)/Commissioner (Industries).
Small Industries Development Bank of India (SIDBI).
Beneficiary Identification:
At the district level, a Task Force comprising representatives from KVIC, State KVIB, State DICs, and Banks will identify beneficiaries. This Task Force, chaired by the District Magistrate/Deputy Commissioner/Collector, will ensure Bank involvement from the outset to prevent application clustering.
Applicants who have undergone a minimum of 2 weeks training under Entrepreneurship Development Programme (EDP), Skill Development Programme (SDP), Entrepreneurship cum Skill Development Programme (ESDP), or Vocational Training (VT) can directly submit applications to Banks.
However, Banks will refer these applications to the Task Force for consideration. Any attempt to inflate project costs solely to obtain higher subsidies will be discouraged. KVIC, in collaboration with SBI and RBI, will develop a scorecard for assessment, shared with District Level Task Forces and other state/district entities.
This scorecard will guide beneficiary selection and will also be accessible on KVIC and Ministry websites to ensure transparency. The selection process will prioritize transparency, objectivity, and fairness, with the involvement of Panchayati Raj Institutions.
Bank Finance
The bank will sanction 90% of the project cost for beneficiaries/institutions in the General Category and 95% for those in special categories. The full amount will be disbursed appropriately to set up the project.
The capital expenditure will be financed by the bank in the form of a term loan, and working capital will be provided in the form of cash credit. Alternatively, the bank may provide a composite loan comprising both capital expenditure and working capital. The bank credit amount will range between 60-75% of the total project cost after deducting 15-35% of margin money (subsidy) and 10% from general category beneficiaries and 5% from special category beneficiaries as owner's contribution.
Banks will claim margin money (subsidy) based on projected capital expenditure in the project report and its sanction. However, margin money (subsidy) will be retained only on the actual availment of capital expenditure. Any excess amount will be refunded to KVIC immediately after the project is ready for production.
The working capital component should be utilized in a way that it reaches 100% of the cash credit limit within three years of the lock-in period of margin money, with at least 75% utilization of the sanctioned limit. If the utilization does not reach the specified limit, the bank/financial institution should recover a proportionate amount of the margin money (subsidy) and refund it to KVIC at the end of the third year.
Normal interest rates will be charged, and the repayment schedule may range between 3 to 7 years after an initial moratorium as prescribed by the concerned bank/financial institution. The routine insistence on credit guarantee coverage by banks, regardless of the proposal's merits, will be discouraged. RBI will issue necessary guidelines to prioritize sanctioning projects under PMEGP and exclude certain banks from implementing the scheme.
Bank Financing:
Banks will sanction 90% of the project cost for General Category beneficiaries/institutions and 95% for special categories, disbursing the full amount for project setup.
Banks will finance Capital Expenditure through Term Loans and Working Capital through cash credit or Composite Loans. Bank credit will range from 60-75% of the total project cost after deducting 15-35% as margin money (subsidy) and 10% from general category beneficiaries and 5% from special category beneficiaries. This scheme necessitates increased loan allocations and sanctions from participating banks, aligning with RBI's guidelines for a 20% year-on-year credit growth to the MSME Sector.
While Banks will claim Margin Money (subsidy) based on project report projections and sanction, only the subsidy on actual Capital Expenditure availed will be retained, with any excess refunded to KVIC upon project readiness.
Working Capital utilization should reach 100% of the cash credit limit within three years of the Margin Money lock-in period, with at least 75% utilization of the sanctioned limit. Failure to meet these limits will result in proportional recovery of Margin Money (subsidy) by the Bank/Financial Institution, refunded to KVIC at the end of the third year.
Interest rates and repayment schedules:
Normal interest rates apply. Repayment schedules may span 3 to 7 years after an initial moratorium, as prescribed by the respective bank/financial institution.
Banks will be guided to prioritize PMEGP projects, and RBI will issue guidelines to exclude certain RRBs and banks from Scheme implementation.
Village Industry:
A Village Industry, including Coir-based projects (excluding those in the negative list), situated in rural areas, engages in the production of goods or provision of services, with or without power usage. The fixed capital investment per full-time artisan or worker, calculated as Capital Expenditure on workshop/workshed, machinery, and furniture divided by the number of full-time jobs created by the project, should not exceed Rs. 1 lakh in plain areas and Rs. 1.50 lakh in hilly areas.
Rural Area:
Any area designated as a Village according to the revenue records of the State/Union Territory, regardless of population.
Additionally, it encompasses any area classified as a town, provided its population does not exceed 20,000 individuals.
Process Flow for Online Application and Fund Disbursement under the Scheme:
Project proposals will be solicited from potential beneficiaries at the district level through various channels such as press, advertisements, radio, and other multimedia platforms by KVIC, KVIBs, and DICs at regular intervals based on the allocated targets for each district. The scheme will also be promoted and publicized through Panchayati Raj Institutions, which will aid in beneficiary identification.
From May 1, 2016, only online applications will be accepted; manual submissions will not be permitted.
The online portal will offer separate application forms for individuals and institutional applicants.
Upon initial registration (application filing), applicants will receive a unique User ID and Password to track their application status.
Upon final submission, applicants will receive an application ID.
Applicants are encouraged to provide their Aadhaar number. In case of institutional applications, the authorized person should furnish their Aadhaar number. If Aadhaar number is unavailable, the individual/enterprise's PAN Card or the operational bank account number of the institution may be provided.
The one-page online application form allows for data saving at any stage.
Detailed guidelines for completing each section will accompany the application form.
Frequently Asked Questions (FAQs) about the scheme and the online application process will be available, along with a short video demonstrating the online application process.
The application form will include a link for applicants to prepare their own project report using a provided template.
Applicants can upload necessary photos and documents crucial for application screening before submission. These documents include:
Caste Certificate
Special Category Certificate, as applicable
Rural Area Certificate
Project Report
Education/EDP/Skill Development Training Certificate
For Institutions, self-attested copies of:
Registration Certificate
Authorization Letter/Copy of Bye-laws authorizing Secretary, etc., to apply
Certificate for Special Category, if required
The application form and PMEGP MIS portal will be designed to be mobile-friendly.
Upon completion of the application and uploading of required documents on the portal, the applicant will click the SUBMIT button, finalizing the submission. The entire set of documents and the application form will be electronically forwarded to the District Representatives of KVIC, State KVIB, and the District Industries Centre of the respective district.
Within five working days of receiving the application, the nodal officers of KVIC, State KVIB, and DIC will personally interact with the applicant via telephone or in-person meeting to confirm receipt and preliminary scrutiny acceptance of the application. The nodal officers will assist the applicant in correcting any errors in the application, consult and cross-check with the applicant, and provide support at each stage. They will evaluate the applications using the same methodology as banks for loan approval. Applications that do not adhere to scheme guidelines or remain incomplete or irrelevant even after consultation with the applicant will be rejected by the respective nodal officer, with reasons recorded for rejection. Applicants can file grievances against such rejections to the State Director, KVIC.
A Task Force will be established to scrutinize received applications, consisting of the following members:
Chairman: District Magistrate/Deputy Commissioner/Collector
Vice Chairman: PD - DRDA/EO - Zilla Panchayat
Member: Lead Bank Manager
Member: Representative of KVIC/KVIB/DIC
Special Invitee: Representative of NYKS/SC/ST Corporation
Special Invitee: Representative of MSME-DI, ITI/Polytechnic
3 Members: Representatives from Panchayat
To be nominated by Chairman/District Magistrate/Deputy Commissioner/Collector by rotation
Member: Director RSETI/RUDSETI
Member Convener: General Manager, DIC of the District
After preliminary scrutiny, District level Agencies (KVIC/KVIB/DIC) will simultaneously forward the corrected applications to the DLTFC, one of the chosen Financing Banks by the applicant, and the Lead Bank Manager (LBM).
The General Manager of the District Industries Centre (DIC) will serve as the Convener of the District Level Task Force Committee (DLTFC), responsible for presenting all received applications to the committee. DLTFC meetings will convene at least once a month, preferably on the first Monday of each month (or on mutually agreed dates by the Director of KVIC, KVIB, and GM of DIC). Additional meetings may be scheduled within the same month if necessary.
The meeting dates will be published on the PMEGP web portal of all districts. The Collector, or in their absence, the EO/PD of DRDA or Deputy Collector, will chair the DLTFC meetings, with the Project Director-DRDA serving as the vice-chairman. The committee will review each application and provide its recommendations online.
DLTFC decisions will be communicated electronically to the District Implementing Agencies (KVIC/KVIB/DIC) within three working days of the meeting. Upon receipt of the decision, the respective agency will forward the recommended applications to the concerned banks within 48 hours.
The entire process must be completed within 45 days of receiving the application online. While interviews by the DLTFC are not preferred, applicants may be called for personal interaction or interviews if deemed necessary. If the DLTFC fails to reach a decision within 45 days, the banks may proceed to appraise the projects independently. Applicants must be informed of rejection reasons clearly.
An Online Grievance Portal and Grievance Cell will be established by KVIC HQ. The Grievance Cell will address online complaints within 48 hours and instruct concerned state officers to take necessary action. Applicants dissatisfied with the committee's recommendations can file grievances with the GM of DIC or State Director of KVIC, whichever is senior. The CEOs of KVIC and KVIB and the Principal Secretary (Industry) will serve as appellate authorities for respective cases.
The Bank will independently assess the viability of each project and make credit decisions accordingly. For projects approved by the Task Force and involving loans up to Rs.10 lakh, Banks will not require collateral security, aligning with RBI guidelines. However, they will conduct technical and economic appraisals, ensuring that each project meets criteria such as:
Industry classification
Per Capita Investment
Own Contribution
Rural Areas (for projects sponsored by KVIC/KVIBs/DICs)
Compliance with the Negative List (refer to Para 29 of the guidelines)
Applications approved by the District Task Force must meet these requirements upfront to prevent delays in loan approval by Banks.
Banks will approve or reject loan applications within a set timeframe. Once approved, applicants receive a sanction letter via email or hard copy within 30 days of the District Agencies recommending the application. If applicants haven't completed Entrepreneurship Development Program (EDP) training, the letter will be sent to the training center. EDP training is required before loan disbursement.
Applicants don't have to wait for loan approval to start EDP training; they can do it anytime after submitting the application by coordinating with the State KVIC office and paying the fees.
After receiving the loan sanction letter, applicants must deposit their contribution and EDP certificate to the bank within 10 working days.
Banks release the first loan installment, and then claim Margin Money subsidy online. KVIC validates and uploads the subsidy claim within 3 working days.
The online claim form automatically checks two conditions: first, that the first loan installment was released before filing the Margin Money subsidy claim, and second, that the installment amount exceeds the claimed subsidy amount. KVIC validates and uploads the subsidy claim within 3 working days.
The Nodal Bank transfers the validated Margin Money subsidy claim amount to the financing bank branch within 24 hours of validation.
Once the Margin Money subsidy is received by the bank for the borrower, it must be placed in a three-year Term Deposit Receipt (TDR) within 24 hours at the branch level, under the borrower's or institution's name. No interest will be paid on the TDR, and no interest will be charged on the corresponding loan amount.
Efforts will be made to send SMS/email alerts to the applicant automatically at each stage, either by the system or by relevant officials.
If the bank's advance turns "bad" within the three-year period due to reasons beyond the borrower's control, the Margin Money subsidy, along with interest, will be returned to KVIC. Any subsequent recoveries made by the bank will be used to settle their outstanding dues.
The Margin Money subsidy is a one-time assistance provided by the government and is not available for increasing credit limits or expanding/modernizing projects.
Projects financed by two different sources (such as banks or financial institutions) are ineligible for Margin Money subsidy assistance.
Before releasing bank finance, the bank must obtain an undertaking from the beneficiary stating that if KVIC/KVIB/State DIC raises objections (in writing), the beneficiary will refund the Margin Money subsidy kept in the TDR or released to them after the three-year period.
Banks, KVIC, KVIBs, and DICs must ensure that each beneficiary prominently displays a signboard at the main entrance of their project site.
Unit Name: __________________________
Financed By: _________________________ (Bank), _____________________ District Name
Under Prime Minister's Employment Generation Programme (PMEGP) Ministry of Micro, Small and Medium Enterprises
The PMEGP portal needs to be updated to record loan repayments made by PMEGP beneficiaries. Nodal offices of relevant agencies like KVIC/KVIB/DIC should conduct visits to these units at least once every six months after their establishment to assess their progress, offer guidance, and provide mentoring. These visits should be recorded on the PMEGP MIS portal. Additionally, the portal should track physical verification of units by third-party agencies and disbursements of Margin Money adjustments into beneficiaries' loan accounts.
The portal's Management Information System (MIS) should prevent overlap between sanctioned loans and disbursements throughout the financial year. It should also generate various reports based on categories, rural or urban settings, banks, districts, states, years, industry sectors, and project sizes.
Entrepreneurship Development Programme (EDP)
The aim of EDP is to provide comprehensive training in various managerial and operational aspects such as finance, production, marketing, enterprise management, banking procedures, and bookkeeping. Previously, under REGP, EDP lasted only 3 days, and under PMRY, it extended to 10 days. However, feedback from the Department Related Parliamentary Standing Committee for Industry (DRPSCI) highlighted the inadequacy of the 3-day format. Consequently, under PMEGP, the duration has been extended to two to three weeks. This extended period includes interaction with successful rural entrepreneurs, banks, and field visits to enhance effectiveness.
EDP sessions will be conducted by various entities including KVIC, KVIB Training Centers, Accredited Training Centers operated by Central Government, NSIC, and national-level Entrepreneurship Development Institutes (EDIs) such as NIESBUD, NIMSME, and IIE, along with their partner institutions. Additionally, State Governments, Banks, Rural Development and Self-Employment Training Institutes (RUDSETI), reputable NGOs, and other organizations recognized by the Government will also conduct these programs.
Participation in EDP is mandatory for all PMEGP beneficiaries. However, those who have previously completed EDP programs lasting at least two weeks through KVIC/KVIB or other reputable training centers will be exempted from undergoing further training. KVIC will identify and publicize the available training centers/institutes, along with details about course content, duration, etc., to all Implementing Agencies.
Budget for EDP Charges to the Training Centers
Under the Scheme, a budget ranging from Rs. 2500/- to Rs. 4000/- per trainee is allocated for a duration of two to three weeks. This amount covers expenses such as course materials, honorarium for guest speakers, and lodging and boarding. KVIC will reimburse these expenses to the selected training centers/institutes. Specific procedures for reimbursement will be developed by KVIC and shared with KVIBs and DICs.
Physical verification of PMEGP Units
KVIC will conduct 100% physical verification of all units established under PMEGP, including those set up via KVIBs and DICs. This verification will be carried out by state government agencies or, if necessary, outsourced to professional institutes with expertise in this area. The procedures will adhere to the General Financial Rules (GFR) of the Government of India. Banks, DICs, and KVIBs will collaborate with and assist KVIC in ensuring the completion of this verification. KVIC will develop a suitable proforma for the physical verification of units. Quarterly reports, following the prescribed format, will be submitted by KVIC to the Ministry of MSME.
Awareness Camps
KVIC and State DICs will collaborate closely with KVIBs to organize nationwide awareness camps aimed at promoting PMEGP and educating potential beneficiaries in rural, semi-rural, and urban areas about the Scheme. These camps will actively involve unemployed individuals, with a special focus on marginalized groups such as SC, ST, OBC, persons with disabilities, ex-servicemen, minorities, and women. To gather necessary information and details, KVIC/KVIBs/DICs will liaise with state-level organizations like SC/ST Corporations, AWWA, NYKS, reputable NGOs, and Employment Exchanges.
Each district may host up to two camps - one organized by KVIC in coordination with the relevant KVIB, and another by DIC. Ideally, KVIC and DIC should jointly organize these camps for specific districts. A Committee comprising the Lead Bank, KVIC/KVIB/DIC, and the Principal of Multi-Disciplinary Training Centers (MDTC) of KVIC will select beneficiaries and refer them for training, project formulation assistance (RICS), and project sanction by the Bank.
Funds allocated for publicity, arrangements, and other necessary expenses related to organizing these camps will be communicated separately through guidelines provided by KVIC.
Mandatory Activities in Awareness Camps:
Publicity: Display banners, posters, hoardings, and advertisements in local newspapers.
Presentation: Officials from KVIC/KVIB/DIC will provide information about the scheme.
Lead Bank Presentation: The Lead Bank of the area will deliver a presentation.
Success Stories: Successful PMEGP/REGP Entrepreneurs will share their experiences.
Distribution: Issuance of sanction letters to PMEGP entrepreneurs approved by the bank.
Press Conference: Interaction with the media.
Data Collection: Gather information from potential beneficiaries, including profiles, skills, backgrounds, qualifications, experiences, and project interests. A committee comprising representatives from the Lead Bank, KVIC, KVIB, DIC, and Principal of MDTC will shortlist beneficiaries for orientation, training, RICS, and project sanction.
Shelf of Projects: KVIBs and DICs will forward project details to KVIC for inclusion in the Shelf of Projects. KVIC will expand this list in consultation with banks, KVIBs, and DICs.
Marketing Support: (a)Product Marketing: Utilize KVIC's Marketing Sales outlets whenever possible based on quality, pricing, and other criteria specified by KVIC to KVIBs/DICs.
(b)Additional Support: Arrange exhibitions, workshops, buyer-seller meets, etc., at district, state, zonal, national, and international levels for the benefit of PMEGP beneficiaries.
Workshops
Objectives:
Inform potential beneficiaries about the benefits of the PMEGP Scheme and other KVIC schemes like PRODIP, SFURTI, etc.
Establish a Data Bank of PMEGP units containing details such as products, services/business activities, production capacity, marketing setup, employment, and project costs.
Engage with PMEGP entrepreneurs to gather feedback about their units, challenges faced, required support, success stories, etc.
Involve marketing and export experts to assist PMEGP units in these areas.
Notes:
Ensure a minimum participation of 200 prospective entrepreneurs in each workshop.
One State-level workshop for KVIC and one for DIC are allowed.
KVIC and DIC may jointly organize workshops in specific states.
Each workshop will have one representative from both KVIC and DIC.
State Level Workshop Activities:
Presentation on the PMEGP Scenario of the State.
Views from Banks: Senior officials from the lead bank in the state will share insights on PMEGP.
Experience Sharing: PMEGP/REGP entrepreneurs, with a focus on special categories, will discuss their success stories.
Briefing on KVIC Support Schemes: Information on schemes like PRODIP, RISC, SFURTI, MSECDP, CLCSS, and CGTSME will be provided.
NABARD and SIDBI Support: Introduction to cluster and marketing support schemes.
Involvement of Stakeholders: Utilizing the services of NYKS, MWCD, AWWA to engage rural youth, weaker sections, women, minorities, ex-servicemen, and the physically challenged.
Market Potential: Presentation by marketing experts on domestic and export market potential.
Open Discussion: Interactive session with PMEGP entrepreneurs to address implementation challenges, constraints, and future support needs.
Data Collection: Gathering information on PMEGP entrepreneurs in the prescribed format.
Exhibition: Arranging an exhibition cum sale of PMEGP products.
Federation Formation: Discussion on the formation of a PMEGP Federation.
Press Conference.
KVIC will coordinate these workshops and obtain advance approval for the annual workshop calendar from the Ministry.
Exhibitions
KVIC will organize PMEGP Exhibitions at National, Zonal, State, and District levels, with special exhibitions for the North Eastern Zone in coordination with KVIBs and DICs. These exhibitions aim to promote products manufactured by PMEGP units. The Ministry will approve the annual exhibition calendar in advance. Separate pavilions will be allocated for the display of products from units established through KVIBs/DICs. KVIC/KVIBs/DICs will develop distinct logos and names for rural and urban entrepreneurs. For instance, names like GRAMEXPO, GRAMUSTAV, and GRAM MELA may be used for rural PMEGP exhibitions. KVIC, in collaboration with KVIBs and DICs, will organize one district-level, one State-level, and one Zonal-level exhibition annually.
Participation in International Exhibitions
PMEGP units will have the opportunity to participate in International Exhibitions such as the India International Trade Fair (IITF) to expand their export markets. KVIC will coordinate participation in these exhibitions with KVIBs and DICs. KVIC will solicit a list of interested units from KVIBs and DICs. Units set up through KVIBs and DICs will be considered for participation based on the merit, variety, and quality of their products. A maximum amount of Rs. 20 lakh will be provided to cover expenses such as pavilion rental charges, stall fabrication, display, and demonstrations. Additional expenses may be covered from KVIC's regular marketing budget provisions.
Bankers Review Meetings
PMEGP operates as a bank-driven scheme, with project sanction and loan disbursement conducted by the respective banks. Regular interaction between KVIC, KVIBs, DICs, and bank officials at various levels is crucial to address implementation challenges, ensure effective outcomes, and achieve targets. The following levels of Bankers Review Meetings will be organized:
(i) Lead District Managers Meet (LDM): Jointly organized by the State Office and Divisional Office of KVIC in collaboration with KVIB and DIC, this quarterly meeting at the LDM level aims to inform and educate bank officials about PMEGP. It also serves to monitor and review scheme implementation.
(ii) Zonal Review Meeting: Quarterly zonal reviews conducted by KVIC across the six zones involve participation from representatives of KVIC, KVIB, and DIC, alongside invited bank officers. The focus is on reviewing and monitoring PMEGP implementation.
(iii) Top-Level Bankers Meeting: KVIC hosts semi-annual top-level bankers meetings in June and December. These meetings, chaired by the CEO of KVIC, involve CMDs/Senior Executives from nationalized banks, representatives from the Ministry of MSME, State DICs, and KVIBs. Representatives from all States/UTs are invited in two groups to each of these meetings. The focus is on reviewing targets and addressing policy decisions related to bank implementation of PMEGP.
Orientation and Training under PMEGP
To ensure effective implementation of PMEGP, staff and officers of KVIC, KVIBs, DICs, and concerned agencies will receive training on the operational modalities of the scheme. These one-day training workshops will be conducted at the State/District levels by KVIC (in coordination with KVIBs) and DICs. KVIC and DICs will jointly organize 40 such programs per year, each. Guidelines for organizing these workshops will be issued separately by KVIC.
TA/DA of Staff and Officers
Officers from KVIC, KVIBs, and DICs will conduct field visits and monitoring activities for PMEGP. A provision of Rs. 1 crore per year is proposed for TA/DA expenses, including administrative costs like stationery, documentation, and contingencies. Approximately 40% of this amount can be allocated to DICs. KVIC will issue detailed guidelines outlining expenditure certification modalities and norms for field visits to optimize assistance and ensure cost efficiency.
Publicity and Promotional Activities
Aggressive publicity campaigns will be undertaken to popularize PMEGP, including posters, banners, hoardings, radio jingles, television messages, advertisements in local newspapers, and press conferences featuring VVIPs and distinguished guests. Advertisements will be published in English, Hindi, and local languages. Quarter-page advertisements will be released for District-level events, while half-page advertisements will be released for State-level events.
An allocation of Rs. 16 crore will be made over a four-year period for publicity and promotional activities for PMEGP. KVIC will earmark 25% of funds for DICs to release advertisements/publicity for the scheme, following guidelines set by KVIC and ensuring coordination with KVIBs and DICs.
MIS Package, Application Tracking System, E-Portal, and Other Supporting Packages
E-governance is essential for effectively monitoring and reviewing the scheme. Additionally, databases of existing REGP and PMRY beneficiaries need to be documented. KVIC will construct a dedicated PMEGP website, integrating relevant links with the Ministry of MSME, State KVIBs, DICs, NIC, and Banks, providing comprehensive information. An application tracking system will be introduced by KVIC, in coordination with KVIBs/DICs, for PMEGP beneficiaries. Furthermore, the Rural Industrial Consultancy Services (RICS) software package for project preparation, utilized by KVIC, will be extended to all training centers nationwide to assist potential beneficiaries in project preparation under PMEGP. A separate provision is available under forward-backward linkages for this purpose, to be utilized by KVIC.
KVIC will issue further guidelines regarding the utilization of funds for the outlined purposes in backward and forward linkages, ensuring proper documentation from KVIBs and DICs. State/KVIBs/DICs will maintain proper accounts of expenditure in this regard, regularly monitored by KVIC.
Proposed Estimated Targets under PMEGP
An outlay of Rs. 8,060 Crore (Rs. 7,800 Crore Margin Money subsidy + Rs. 260 Crore under Backward and Forward Linkages) has been approved for PMEGP in the 12th five-year plan to establish 3.39 lakh projects (with an average margin money of Rs. 2.3 lakh per project), creating 27.12 lakh jobs (at an average of 8 persons per project).
Initially, targets will be distributed among KVIC, State KVIBs, and State DICs in the ratio of 30:30:40, with a focus on micro-enterprises in rural areas. The allocation of margin money subsidy will also follow the same ratio. DICs will ensure that at least 50% of their allocated funds are utilized in rural areas.
Annual targets will be allocated to implementing agencies on a state-wise basis.
Criteria for Distribution of Targets under PMEGP
The following are suggested criteria for distributing state-wise targets:
Degree of backwardness of the state;
Level of unemployment;
Achievement of targets under PMRY and REGP in 2007-08;
Loan recovery performance under PMRY and REGP in 2007-08;
Population of the state/union territory;
Availability of traditional skills and raw materials.
KVIC will allocate targets to State KVIC Directorates, KVIBs, and State Governments. Targets at the district level will be determined by the State Level Bankers Coordination Committee (SLBCC), ensuring equitable distribution within each district. KVIC will provide state-wise targets to SLBCC, where district-wise allocations will be finalized. Any adjustments to KVIC's targets require Ministry concurrence. Nodal Bank Branches, identified by KVIC in consultation with State Governments, will handle Margin Money subsidies for both rural and urban areas.
For assigning targets to KVIC Directorates/KVIBs, KVIC will consider rural population, state backwardness (based on 250 identified backward districts), and past REGP performance, with weightages as follows. Similarly, for DICs, criteria will include state backwardness, urban unemployment levels, and rural population, also considering PMEGP performance from the second year onwards. Approximate weightages for determining targets for implementing agencies are provided below.
Criteria Weightage for Determining Targets
Criteria
KVIC/KVIBs
DICs
Rural Population of the State
40%
30%
Backwardness of the State
30%
40%
Urban Unemployment level
-
30%
Past performance of REGP
30%
-
Rehabilitation of Ailing Units
Ailing units under PMEGP will be connected with the RBI's Guidelines for the rehabilitation of small-scale industrial units, distributed to all Scheduled Commercial Banks through their letter RPCD.No.PLNFS.BC.57/06.04.01/2001-2002 dated January 16, 2002.
Registration
Registration with KVIC/KVIBs/State DICs under the scheme is voluntary. No registration fee will be levied on beneficiaries, and expenses related to documentation costs will be covered by the funds available for Forward and Backward linkages.
Beneficiaries will submit quarterly reports on production, sales, employment, wages paid, etc., to the State/Regional Director of KVIC/KVIB/State DIC. KVIC will then analyze and submit a consolidated report to the Ministry of MSME every six months.
Role of Private Sector Banks in PMEGP Implementation
The scheme will also involve Private Sector Scheduled Commercial Banks/Co-operative Banks selectively, after assessing their last three years' balance sheets and lending portfolio. The Margin Money (subsidy) portion will be reimbursed to banks by KVIC on an actual basis.
Monitoring and Evaluation of PMEGP
Role of Ministry of MSME
The Ministry of MSME will oversee and monitor the scheme's implementation. It will allocate targets, sanction funds, and hold quarterly review meetings on PMEGP performance. Attendees will include the CEO of KVIC, Principal Secretaries/Commissioners (Industries) responsible for implementation via DICs, representatives of State KVIBs, and senior bank officials.
Role of KVIC
KVIC will serve as the primary implementing agency for the scheme at the national level. The CEO of KVIC will conduct monthly performance reviews with State KVIBs, DICs, and banks, submitting monthly reports to the Ministry. KVIC will ensure the proper utilization of margin money (subsidy) as per approved plans for SC, ST, Women, etc. Targets and achievements will be monitored at Zonal, State, and District levels by Dy.CEOs, Directors of KVIC, and Commissioners/Secretaries of Industries (DIC) of the concerned states.
Role of State Governments/Union Territories
The scheme will be reviewed semi-annually by the Chief Secretary of the State. Representatives from KVIC, Ministry of MSME, State Director (KVIC), CEO of KVIB, Secretary/Commissioner (Industries) of the State, senior bank officials, and other relevant officials will attend. State Governments will submit monthly reports to KVIC detailing beneficiary information, margin money (subsidy) allocation, employment generation, and projects established. KVIC will compile and forward comprehensive monthly reports to the Ministry. Existing PMRY units will continue to be monitored by State DICs, with reports submitted directly to the Ministry of MSME.
Evaluation of the Scheme
A comprehensive, independent, and thorough evaluation of the scheme will be conducted after two years of its implementation. Based on the findings of the evaluation study, the scheme will undergo a review.
Negative List of Activities
The following activities will not be permitted under PMEGP for the establishment of micro-enterprises/projects/units:
Any industry/business related to meat processing, including slaughtering, canning, or serving meat-based food items, production/manufacturing, or sale of intoxicating items such as Beedi/Pan/Cigar/Cigarette, any establishment serving liquor, or preparing/producing tobacco as raw materials, or tapping toddy for sale.
Any industry/business associated with the cultivation of crops/plantation such as Tea, Coffee, Rubber, etc., sericulture (Cocoon rearing), Horticulture, Floriculture. However, value addition within these sectors will be permitted under PMEGP.
Any industry/business related to Animal Husbandry such as Pisciculture, Piggery, Poultry, etc.
Manufacturing of Polythene carry bags less than 20 microns in thickness, and the production of carry bags or containers made of recycled plastic for storing, carrying, dispensing, or packaging food items, and any other activities causing environmental issues.
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