PMEGP is a policy initiated by the government of India in 2008. poKhadi and Village Industries Commission (KVIC) is the nodal agency for the policy. The policy will be introduced at the state level by State KVIC Directorates, State Khadi and Village Industry Boards (KVIBs), and District Industry Centers (DICs)

Objective of PMEGP

What is PMEGP
What is PMEGP

The primary purpose of the policy is to create more job opportunities in the rural as well as urban areas by developing new self-employment ventures/projects / micro-enterprises.


  • Any person, over the age of 18
  • There’ll be no budget limit for assistance to set up projects under PMEGP.
  • The applicants should be at least VIII standard pass for setting up project costs above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business/service sector.
  • Support under the Scheme is only accessible for new projects specifically sanctioned under the PMEGP.
  • Self-assistance groups are also qualified for support under the PMEGP. These include those belonging to the BPL if they have no support from any other scheme.
  • Institutions registered under the Statute on Registration of Societies 1860;

Rate of Subsidy

  • 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 Border areas, etc.

Beneficiary’s Contribution

  • 10% general category
  • 5% special category
  • Project/unit costs for the production sector are around Rs. 25 lakh. The maximum cost.
  • The overall cost for the business/service project/unit admissible is Rs. 10 lakh. Banks shall have the remainder of the overall cost of the project as a term loan

Bank Finance

To get Loan you will have to make a project report for PMEGP.

For the general beneficiary category and organization, 90% of the project cost, and for the specific category, 95% will be sanctioned and the entire amount paid for project implementation will be disbursed.

  • Bank can fund Term Loan and Working Capital Investment in the form of cash credit.
  • Negative Activities List

The preceding list of activities for the establishment of microenterprises/projects/units is not allowed under PMEGP

  • Any sector/business linked to Meat (slaughtered), i.e. processing, canning and/or serving things produced of it as food, manufacture/manufacture or sale of poisonous items such as Beedi / Pan / Cigar / Cigarette, etc., any Hotel or Dhaba or sales outlet serving liquor, preparation/manufacture of tobacco as raw materials, tapping for sale of the baby.
  • Any industry/business linked to crop/plant cultivation, such as tea, coffee, rubber, etc. sericulture (Cocoon rearing), horticulture, floriculture. Under PMEGP, value-added will be enabled
  • Any industry/business linked to Animal Husbandry such as Fisciculture, Piggery, Poultry, etc.
  • Production of Polythene carries bags of less than 20 microns thickness and manufacture of carrying a bag or bottles made from recycled plastic for storage, transport, distributing or packaging of foodstuffs and any other item that causes environmental issues.