What is the maximum project cost eligible under PMEGP?

₹50 lakh for manufacturing units and ₹20 lakh for service or trading units, under the revised PMEGP guidelines.

How much subsidy (margin money) will I get?

15% of the project cost for general-category applicants in urban areas, 25% in rural areas; 25% for special-category applicants (SC/ST/OBC/minorities/women/ex-servicemen/PwD) in urban areas, 35% in rural areas.

How much do I need to contribute from my own funds?

A minimum of 10% of the project cost for general-category applicants, or 5% for special-category applicants. The bank finances the rest as a term loan.

Can existing businesses apply?

No — PMEGP funds only new, viable projects. Existing units, or those that already availed a subsidy under PMRY/REGP/PMEGP/CMEGP, are not eligible, except for a second (upgradation) loan for units that have already repaid their first PMEGP/REGP/MUDRA loan.

Is there a second loan for existing PMEGP units?

Yes — well-performing existing units can avail a second loan of up to ₹1 crore (manufacturing) or ₹25 lakh (service) at a 15% subsidy, to upgrade or expand.

Who implements PMEGP?

KVIC at the national level, along with State Khadi and Village Industries Boards (KVIB) and District Industries Centres (DIC), which act as implementing agencies alongside participating banks.

Prime Minister's Employment Generation Programme (PMEGP)

By Ministry of MSME

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Ministry of MSME

New Delhi · Delhi · India

The Ministry of Micro, Small and Medium Enterprises (MSME) is the central government ministry responsible for formulating policies and programmes for the MSME sector in India. It administers several schemes aimed at promoting entrepreneurship, livelihood creation, and enterprise…

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Application Process

1
Check eligibility & prepare Aadhaar
Confirm you are 18+, hold a valid Aadhaar number, and (for projects above ₹10 lakh manufacturing / ₹5 lakh service) have passed Class VIII.
You
2
3
4
5
6
7
8

How to apply

Four steps from draft to disbursement — one action each.

1
Line up your documents
Keep every document from the checklist ready in one folder. Missing docs are the #1 reason applications get bounced.
2
Submit on the official portal
Use the official application link and verify all details before final submission.
3
Follow up
Reach out 5–7 days after submitting to confirm receipt and ask about the review timeline.

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Sources

Data on this page is compiled from official program and provider references.

Ministry of MSMEProvider

News

PMEGP portal upgrades leave applicants in limbotimesofindia.indiatimes.com · 3 weeks ago
Government Expands PMEGP, PM Vishwakarma and ONDC Support for Rural MSMEssmestreet.in · last month
PMEGP Subsidy Release Put on Hold Pending Scheme Extension Approval; Jammu Kashmir Had 1.46 Lakh Beneficiaries: Centrekashmirlife.net · last month
Jammu Kashmir Tops PMEGP Applications, Sanctions Over 98,000 Projects In Five Yearskashmirlife.net · last month

Source: Google News aggregated

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The Prime Minister's Employment Generation Programme (PMEGP) is the Government of India's flagship credit-linked subsidy scheme for setting up new micro-enterprises in the non-farm sector, administered by the Khadi and Village Industries Commission (KVIC) under the Ministry of MSME, alongside State KVI Boards (KVIB) and District Industries Centres (DIC).

Under the revised scheme guidelines, the maximum project cost eligible for margin-money subsidy is ₹50 lakh for manufacturing units and ₹20 lakh for service or trading units. The government subsidy — called margin money — ranges from 15% to 35% of the project cost depending on the applicant's category and location: general-category applicants receive 15% in urban areas and 25% in rural areas, while special-category applicants (SC, ST, OBC, minorities, women, ex-servicemen, persons with disabilities, and residents of hilly/border areas) receive 25% in urban areas and 35% in rural areas.

The beneficiary must contribute a minimum of 10% of the project cost from their own funds (5% for special-category applicants); the remaining balance is financed by the bank as a term loan plus working capital, with banks typically financing 90-95% of the project cost.

For existing PMEGP, REGP or MUDRA units that have repaid their first loan and want to expand, PMEGP also offers a second loan (upgradation) of up to ₹1 crore for manufacturing units and ₹25 lakh for service units, carrying a 15% subsidy.

The margin-money subsidy is non-repayable once the unit is established and operational for three years, at which point it is credited into the beneficiary's loan account, reducing the outstanding term loan rather than being paid out upfront.

Prime Minister's Employment Generation Programme (PMEGP)

Prime Minister's Employment Generation Programme (PMEGP)

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