Prime Minister's Employment Generation Programme (PMEGP)
Ministry of MSME · Central government
A 15–35% margin-money subsidy funds new micro-enterprises in manufacturing or services via KVIC, KVIB, or DIC.
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 of the Government of India, designed to support the creation of new micro-enterprises in the non-farm sector. The Khadi and Village Industries Commission (KVIC), operating under the Ministry of MSME, administers the programme with assistance from State KVI Boards (KVIB) and District Industries Centres (DIC).
Under the current 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 subsidy, referred to as margin money, constitutes 15% to 35% of the project cost, varying by applicant category and location. General-category applicants receive 15% in urban areas and 25% in rural areas. Special-category applicants—including SC, ST, OBC, minorities, women, ex-servicemen, persons with disabilities, and residents of hilly or border areas—receive 25% in urban areas and 35% in rural areas.
A minimum contribution of 10% of the project cost is required from the beneficiary's own funds, reduced to 5% for special-category applicants. The remaining amount is financed by the bank as a term loan and working capital, with banks typically covering 90-95% of the project cost.
For units previously financed under PMEGP, REGP, or MUDRA that have repaid their first loan and seek expansion, a second loan (upgradation) is available. This loan extends 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 that point, the amount is credited to the beneficiary's loan account, reducing 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
- Any individual above 18 years of age is eligible. - There is no income ceiling for assistance. - For projects costing above ₹10 lakh in manufacturing or above ₹5 lakh in the service/business sector, beneficiaries must possess at least an VIII standard pass educational qualification. - Assistance is available only for new viable projects specifically sanctioned under PMEGP. - Existing units and units that have already availed any Government subsidy (under PMRY, REGP, PMEGP, CMEGP, or any other scheme of Government of India or State Government) are not eligible, except for a second loan for existing (REGP/PMEGP/MUDRA) units. - Projects without Capital Expenditure (Term Loan) are not eligible. - The cost of land cannot be included in the project cost. - Applicants must possess a valid Aadhaar Number and consent to authenticate 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 procedure comprises the following steps:
1. Verify eligibility criteria. 2. Authenticate Aadhaar details. 3. Generate a User ID and Password. 4. Log in to the PMEGP portal. 5. Fill in the required details. 6. Upload the necessary documents, including a passport-size photograph, proof of highest educational qualification, project report, Social/Special Category Certificate (if applicable), and Rural Area Certificate (if applicable). 7. Complete the Score Card. 8. Verify all entered information. 9. Submit the application.
Applicants may monitor the status of their application online. An 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 are eligible for up to ₹50 lakh, while service or trading units can receive up to ₹20 lakh.
How much subsidy (margin money) will I get?
For general-category applicants, the subsidy covers 15% of the project cost in urban areas and 25% in rural areas. For special-category applicants (SC/ST/OBC/minorities/women/ex-servicemen/PwD), the rates are 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 funds the remainder as a term loan.
Can existing businesses apply?
No — PMEGP supports only new, viable projects. Existing units, or those that have already received a subsidy under PMRY/REGP/PMEGP/CMEGP, are ineligible, except for a second upgradation loan for units that have fully repaid their first PMEGP/REGP/MUDRA loan.
Is there a second loan for existing PMEGP units?
Yes, existing units that are performing well can avail a second loan of up to ₹1 crore for manufacturing or ₹25 lakh for services, with a 15% subsidy, to fund upgrades or expansion.
Who implements PMEGP?
The Khadi and Village Industries Commission (KVIC) operates nationally, with State Khadi and Village Industries Boards (KVIB) and District Industries Centres (DIC) serving as implementing agencies alongside participating banks.
Details last verified on 3 August 2026. Source: the issuer's published information.