All schemes
Subsidy MSME

PMEGP — Prime Minister Employment Generation

15–35% capital subsidy for new enterprises

Maximum benefit
₹50 L
Typical processing
60–120 days from application to sanction; subsidy locked-in for 3 years
Apply on official portal
Free with this scheme · BharatSeal exclusive
967 free sample project profiles — DPR templates ready to use
KVIC publishes DPR-style sample profiles for 967 business types — 3-ply masks, alternators, aloe-vera gel, agarbatti, more. BharatSeal Smart DPRs roll out across the full catalogue with live May 2026 prices, sector-specific buyers, 5-year P&L and a downloadable PDF — free to read, premium PDF from ₹499.
Browse 967 business ideas

About this scheme

Prime Minister's Employment Generation Programme (PMEGP) is a major credit-linked subsidy scheme of the Ministry of MSME, implemented by KVIC (Khadi & Village Industries Commission), KVIBs, and DICs. It generates self-employment opportunities by setting up new micro-enterprises in non-farm sector. PMEGP combines a bank loan with a margin money (subsidy) of 15-35% depending on category and location, providing substantial financial support to first-time entrepreneurs.

What you get

  • Subsidy (Margin Money): 15% (general urban) / 25% (general rural) / 25% (special urban) / 35% (special rural)
  • Maximum project cost: Rs. 50 lakh for manufacturing, Rs. 20 lakh for services
  • Maximum subsidy: Rs. 17.5 lakh (manufacturing, special rural) / Rs. 7 lakh (services, special rural)
  • Bank loan: 60-75% of project cost (10% margin from applicant)
  • No collateral required up to Rs. 10 lakh (CGTMSE cover)
  • Special category (SC/ST/women/OBC/minorities/PH/ex-servicemen/NER/border areas) gets higher subsidy
  • 2nd loan under PMEGP allowed for upgradation/expansion after 3 years of successful operation

Who qualifies

Individuals aged 18+, with at least 8th class education for projects above Rs. 10 lakh in manufacturing and above Rs. 5 lakh in services. The applicant must be setting up a NEW micro-enterprise — existing units are NOT eligible. Self Help Groups (including those of BPL/SC/ST), Charitable Trusts, Cooperative Societies, and Production Cooperative Societies are also eligible. No income ceiling. Cannot have availed PMEGP, REGP, or PMRY earlier.

All industries qualify (no NIC restriction).

Business types
ProprietorshipsPartnerships

Available across India (central scheme).

How to apply

  1. 1Apply online at kviconline.gov.in/pmegpeportal
  2. 2Submit Aadhaar, PAN, education certificate, caste certificate (if applicable), project report
  3. 3Choose nodal agency: KVIC (Khadi/village industries focus) / KVIB (state-level) / DIC (industries focus)
  4. 4Nodal agency screens proposals; selected ones forwarded to participating banks
  5. 5Bank does credit appraisal; sanction issued within 60–90 days
  6. 6Margin money subsidy released after 3 years of satisfactory operation (held as TDR with bank meanwhile)
  7. 7Mandatory 7-day EDP training before disbursement

Key terms and conditions

  • Margin money subsidy is held as Term Deposit Receipt (TDR) with the bank for 3 years
  • TDR adjusted against loan account after 3 years of regular EMI repayment
  • EDP (Entrepreneurship Development Programme) training is compulsory pre-disbursement
  • Promoter's 10% contribution (or 5% for special category) is non-financeable
  • Asset tagging — all assets purchased with loan are hypothecated to bank

What disqualifies you

  • Existing units cannot apply — only greenfield projects
  • Direct agricultural activities excluded (allied agro-business eligible)
  • Negative list: meat processing/preservation, beedi/pan/tobacco, intoxicants, mining
  • Same applicant cannot avail PMEGP/REGP/PMRY twice
  • Default in EMI for more than 3 months can trigger refund of subsidy + interest
  • Same family — only one beneficiary per family

Documents typically required

  • Aadhaar + PAN
  • Project report
  • Caste certificate if applicable
  • Bank account
  • Educational certificates

Frequently asked questions

Q. Why is the subsidy held for 3 years before release?
To ensure unit survival. Many micro-enterprises close within 2 years; the lock-in protects Government funds and incentivises sustainability.
Q. Can I apply if I already have a small business?
No — PMEGP is strictly for NEW units. You need to set up a completely new enterprise. Existing units can explore CLCSS, ZED, or upgradation schemes.
Q. What is the difference between KVIC and DIC routes?
KVIC focuses on khadi, village industries, and rural projects. DIC (District Industries Centre) is the state government's industrial arm and handles general manufacturing/services. Choose based on your industry.

The content above is compiled from public information published by the scheme authority. Eligibility, benefits, and procedures are subject to change. Confirm details directly with the official portal before applying. BharatSeal does not process scheme applications.