Programs in News: PMEGP Scheme for Micro-enterprises

Programs in News: Prime Minister’s Employment Generation Programme (PMEGP). The Cabinet Committee on Economic Affairs chaired by the Prime Minister Shri Narendra Modi has approved the continuation of Prime Minister's Employment Generation Programme (PMEGP).

Latest Programs and Policies are very important for RBI Grade B, NABARD Grade A Exam. The social issue part in Economics and social issue deals with government schemes and programs in RBI Grade B and NABARD Grade A Exam. This Article will provide you insight on recently extended Prime Minister's Employment Generation Programme (PMEGP)

Programs in News: PMEGP Scheme for Micro-enterprises

The Cabinet Committee on Economic Affairs chaired by the Prime Minister Shri Narendra Modi has approved the continuation of Prime Minister's Employment Generation Programme (PMEGP) till the financial year 2025-26 with the total outlay of Rs 13,554.42 crore

Ministry of MSME is implementing Prime Minister's Employment Generation Programme (PMEGP) since 2008-09 through Khadi and Village Industries Commission (KVIC) as nodal agency at the national level for generating employment opportunities in the country by setting up micro-enterprises in non-farm sector.
PMEGP seeks to facilitate generation of employment opportunities for youth across the country by assisting them in setting up micro enterprises in non-farm sectors.
The scheme will create sustainable employment opportunities for about 40 lakh persons in five financial years.
The extension of the scheme is over the 15th Finance Commission Cycle for five years from 2021-22 to 2025-26.

Prime Minister’s Employment Generation Programme (PMEGP)

It is a major credit-linked subsidy programme aimed at generating self-employment opportunities through establishment of micro-enterprises in the non-farm sector by helping traditional artisans and unemployed youth.
PMEGP was launched in 2008 by merging two schemes — Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) — for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas.
PMEGP is being implemented by Khadi and Village Industries Commission (KVIC), State Khadi and Village Industries Board (KVIB) and District Industries centers (DIC).
Under the scheme, loan is being provided by all public sector banks, selected private sector banks and co-operative banks with margin money subsidy being given by the ministry of MSME through KVIC.

Objectives of PMEGP:

To generate employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures.
To bring together widely dispersed traditional artisans, rural and urban unemployed youth and give them self-employment opportunities to the extent possible, at their place.
To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth in the country, so as to help arrest migration of rural youth to urban areas.
To increase the wage earning capacity of artisans.
Contribute to increase in the growth rate of rural and urban employment.

Eligibility: Any individual above 18 years of age is eligible for applying under the scheme. General category beneficiaries can avail margin money subsidy of 25 per cent of the project cost in rural areas and 15 per cent in urban areas.

Since its inception in 2008-09, about 7.8 lakh micro enterprises have been given assistance under PMEGP with a subsidy of Rs 19,995 crore, generating estimated sustainable employment for 64 lakh persons.

About 80 per cent of the units assisted are in rural areas and about 50 per cent are owned by SC, ST and women categories.

Continuation of the scheme

Along with the extension of the time frame, some major modifications have been made in the existing scheme. These include an increase in the maximum project cost from existing Rs 25 lakh to Rs 50 lakh for manufacturing units and from existing Rs 10 lakh to Rs 20 lakh for service units.

The definition of village industry and rural area has also been modified for PMEGP, with areas falling under Panchayti Raj institutions to be accounted under rural areas, whereas areas under municipal corporations to be treated as urban areas.

All implementing agencies are allowed to receive and process applications irrespective of the rural or urban category.

PMEGP applicants under aspirational districts and transgender will be treated as special category applicants and entitled for higher subsidy.

The continuation has been approved with a higher rate of margin money subsidy — 25 per cent of the project cost in urban area and 35 per cent of the project cost in rural areas, for special category applicants including, SC, ST, OBC, women, transgender, physically disabled, NER, aspirational and border district applicants.

For general category applicants, the subsidy is 15 per cent of the project cost in urban areas and 25 per cent of the project cost in rural areas.