Prime Minister's Employment Generation Programme (PMEGP)
Ministry of MSME · Central government
A 15–35% margin-money subsidy from KVIC/KVIB/DIC funds new manufacturing or service micro-enterprises.
Open, rolling. Applications are accepted continuously — there is no deadline.
Key facts
- Subsidy amount
- Up to ₹50,00,000
- Instrument
- Subsidy
- Deadline
- Rolling
About this scheme
The Prime Minister's Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme run by the Government of India to help set up new micro-enterprises outside the farm sector. It is implemented by the Khadi and Village Industries Commission (KVIC) under the Ministry of MSME, together with State KVI Boards (KVIB) and District Industries Centres (DIC).
As per the revised scheme guidelines, the ceiling on project cost eligible for margin-money subsidy stands at ₹50 lakh for manufacturing units and ₹20 lakh for service or trading units. Margin money, the government subsidy, works out to between 15% and 35% of project cost, based on the applicant's category and location. General-category applicants get 15% in urban areas and 25% in rural areas. Special-category applicants — SC, ST, OBC, minorities, women, ex-servicemen, persons with disabilities, and residents of hilly/border areas — get 25% in urban areas and 35% in rural areas.
Applicants must put in at least 10% of the project cost themselves (5% for special-category applicants). Banks finance the rest as a term loan plus working capital, typically covering 90-95% of project cost.
PMEGP also provides a second loan (upgradation) for existing PMEGP, REGP or MUDRA units that have repaid their first loan and wish to expand — up to ₹1 crore for manufacturing units and ₹25 lakh for service units, with a 15% subsidy. The margin-money subsidy is non-repayable once the unit has been established and operational for three years. At that point it is credited to the beneficiary's loan account, lowering the outstanding term loan, rather than being disbursed upfront.
Who can apply
- Eligible business forms
- Not specified
- Udyam registration
- Not specified
- MSME registration
- Not specified
- DPIIT startup recognition
- Not specified
- GST registration
- Not specified
- Where the business may be based
- Not restricted
Eligibility conditions:
- The applicant must be an individual aged over 18 years. - No income ceiling applies. - Where the project cost exceeds ₹10 lakh in manufacturing, or exceeds ₹5 lakh in the service/business sector, the beneficiary must have passed at least the VIII standard. - Only new viable projects sanctioned specifically under PMEGP qualify for assistance. - Existing units are not eligible, nor are units that have already received any Government subsidy under PMRY, REGP, PMEGP, CMEGP, or any other scheme of the Government of India or a State Government. An exception applies to a second loan for existing (REGP/PMEGP/MUDRA) units. - Projects lacking Capital Expenditure (Term Loan) are not eligible. - The cost of land must not be included in the project cost. - The applicant must hold a valid Aadhaar Number and give consent for authentication of demographic details from the UIDAI server. - The unit must be a new one.
How to apply
Applications are to be submitted online through the KVIC portal at kviconline.gov.in/pmegpeportal. The process consists of the following steps:
1. Confirm your eligibility. 2. Complete Aadhaar authentication. 3. Create a User ID and Password. 4. Sign in to the PMEGP portal. 5. Enter the required details. 6. Upload the necessary documents: passport-size photograph, proof of highest educational qualification, project report, social/special category certificate (where applicable), and rural area certificate (where applicable). 7. Fill in the Score Card. 8. Verify the entered details. 9. Submit the application.
Applicants may check the status of their application online. The offline application form can be downloaded from [here](https://kviconline.gov.in/pmegpeportal/jsp/offlineform.jsp).
Documents you will need
- Aadhaar card
- PAN card
- Passport-size photograph
- Detailed project report
- Proof of educational qualification (for projects above ₹10 lakh manufacturing / ₹5 lakh service)
Frequently asked questions
What is the maximum project cost eligible under PMEGP?
Under the revised PMEGP guidelines, manufacturing units can receive up to ₹50 lakh, while service or trading units are eligible for up to ₹20 lakh.
How much subsidy (margin money) will I get?
The subsidy covers 15% of project cost for general-category applicants in urban areas and 25% in rural areas, while special-category applicants (SC/ST/OBC/minorities/women/ex-servicemen/PwD) receive 25% in urban areas and 35% in rural areas.
How much do I need to contribute from my own funds?
General-category applicants must contribute at least 10% of the project cost, while special-category applicants need only 5%; the bank provides the remaining amount as a term loan.
Can existing businesses apply?
PMEGP does not fund existing units or those that have already received a subsidy under PMRY, REGP, PMEGP or CMEGP; the sole exception is a second, upgradation loan for units that have fully repaid their earlier PMEGP, REGP or MUDRA loan.
Is there a second loan for existing PMEGP units?
Yes. Existing units with a sound performance record may take a second loan of up to ₹1 crore for manufacturing or ₹25 lakh for services, carrying a 15% subsidy, for the purpose of upgrading or expanding.
Who implements PMEGP?
KVIC operates at the national level, while State Khadi and Village Industries Boards (KVIB) and District Industries Centres (DIC) serve as implementing agencies together with the participating banks.
Details last verified on 18 September 2026. Source: the issuer's published information.