What Is Prime Minister’s Employment Generation Programme (PMEGP): Objectives, Benefits, Features and More

What Is Prime Minister’s Employment Generation Programme (PMEGP): Objectives, Benefits, Features and More

The Prime Minister’s Employment Generation Programme (PMEGP) was launched to provide extensive employment opportunities for the unemployed youth of India. By offering loans ranging from Rs. 10 lakhs to Rs 25 lakhs, the central government aims to assist the unemployed youth in the country to start their own business ventures.

The primary focus of this scheme is to foster job opportunities for the country’s unemployed youth by setting up micro-enterprises in the non-agricultural sector. The Prime Minister's Employment Generation Programme (PMEGP) merges two earlier schemes: the Prime Minister Rojgar Yojana (PMRY) and the Rural Employment Generation Programme (REGP). Both were aimed at creating job opportunities for the youth.

Key Factors Considered By Central Government In Implementing PMEGP

  1. Regional Economic Backwardness
  2. Population of the State
  3. The presence of traditional craftsmanship and local resources
  4. State Unemployment Rate

Initiated in 2008, PMEGP aims to support, boost, and generate countless job opportunities across various states by promoting MSMEs (Micro, Small, and Medium Enterprises) in both rural and urban areas.

What Are The Main Features of PMEGP 2023

This scheme will allocate 75 projects in each district under its endorsement.

Women, SC, ST, OBC, specially-abled individuals, and the North Eastern Region (NER) Applicants will receive higher subsidies.

The entire process will be conducted digitally, from the initial distribution of application forms to the final money transfer.

Major Amendments to PMEGP Scheme 2023

The Central Government has extended the Prime Minister’s Employment Generation Programme until the fiscal year 2025-26, with a budget allocation of Rs. 13,554.42 Crore. This expansion aims to create employment opportunities for approximately 4 million individuals, as stated by the Minister for Micro, Small, and Medium Enterprises.

Moreover, amendments include raising the maximum project cost to ₹50 lahks for manufacturing units (from ₹25 lakhs) and ₹20 lakhs for service units (from ₹10 lakhs). Additionally, transgender applicants will now be classified as a special category, making them eligible for enhanced subsidies.

How Much Subsidy Can One Get Under This Scheme?

PMEGP offers unemployed youth from the general category a 25% subsidy to establish an industry in rural areas and 15% in urban areas, with a 10% contribution expected from them.
Ex-servicemen from the Special C those from the SC, ST, and OBC categories will receive a 35% subsidy for setting up enterprises in rural areas and 25% in urban areas, with a 5% contribution expected from them.

Which Industries Are Supported Under PMEGP?

Industries such as forest-based, mineral-based, food & agriculture, engineering & chemical-based, textiles (except khadi), service-based, and non-conventional energy-based can benefit from this scheme.

Eligibility Under Prime Minister’s Employment Generation Programme 2023

  1. Applicant must be an Indian resident. 
  2. Applicant must have attained the age of majority i.e., 18 years.
  3. The applicant must have successfully completed at least the 8th-grade examination from a recognized school.

This scheme supports the initiation of new business ventures and is not meant for reviving existing businesses. Priority will be given to individuals trained under any government institute.

Moreover, those benefiting from another subsidy scheme cannot apply for the Prime Minister's Employment Generation Programme Loan Scheme. Cooperative and charitable institutions are also eligible under this scheme.

Required Documents Under This Scheme:

Here's a list of essential documents for application:

  • Applicant's Aadhaar Card
  • Pan card
  • Caste certificate
  • Residence certificate
  • Certificate of educational qualification
  • Mobile number
  • Passport size photo

Application Process of Prime Minister's Employment Generation Programme 2023

To begin, you need to visit the official PMEGP scheme website. Once there, you can navigate the homepage and locate the Online Application Form for Individual option. 

Click on it to access the application form. Fill in all required information, including your Aadhaar Number, Applicant Name, Agency, State, District, and more. Then tap on Save Applicant Data and your application will undergo online verification and processing.

Key Highlight of This Scheme

  • Prime Minister’s Employment Generation Programme is meticulously designed for the unemployed youth populace of the country and effectively caters to their needs in an organized manner. Various agencies and authorities are responsible for its smooth organization and success. At the national level, the Khadi and Village Industries Commission (KVIC) oversees its execution.
  • People at the state level receive benefits through the coordination of State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs), District Industries Centres (DICs), and banks.
  • Apart from the financial assistance given to new enterprises, this scheme aims to support MSMEs that are yet to be established. Enabling the credit system will empower the units with enhanced employment opportunities.
  • This programme operates at a large base including Non-Government Organizations (NGOs), reputed autonomous institutions, Self Help Groups (SHGs), National Small Industries Corporation (NSIC), Udyami Mitras working under Rajiv Gandhi Udyami Mitra Yojana (RGUMY), and Panchayati Raj institutions
  • Few cost restrictions are applied to various sectors with a maximum limit of INR 25 Lakhs for manufacturing and INR 10 Lakhs for the business or service sector.
  • This programme is stretched out to benefit all the MSME units yet to be established. However, the previously established units can not reap the advantages of it.


Among the numerous schemes and initiatives introduced by the state and central government aiming to reduce poverty and unemployment, the Prime Minister’s Employment Generation Programme distinguishes itself with its unique approach.

Acehours, your business buddy can assist you in maximizing the benefits of PMEGP by providing expert guidance on the application process, business plan preparation, and documentation, ensuring your eligibility and success in securing PMEGP funding for your MSME.

This scheme has an advantage in creating significant strides that enhance employment opportunities for the nation’s unemployed youth. Thus, it has not failed to show success since its launch and thrives in boosting the MSME sector significantly.

Read more