The Government of India’s Pradhan Mantri Employment Generation Programme (PMEGP) continues its significant thrust in Assam, aiming to foster self-employment and micro-enterprise development across both rural and urban landscapes. The ongoing initiative provides crucial financial assistance and support to traditional artisans and unemployed youth, reinforcing the state’s economic growth and livelihood creation efforts.

The programme’s sustained focus on Assam underscores its role in addressing unemployment by empowering individuals to establish new micro-enterprises. This strategic intervention is designed to curb rural-to-urban migration and enhance the earning capacity of artisans and young entrepreneurs, thereby contributing to a more robust local economy.

What was announced

Updated information regarding the Pradhan Mantri Employment Generation Programme in Assam highlights its core objectives and operational framework. The scheme, administered by the Ministry of Micro, Small & Medium Enterprises (MoMSME), is actively implemented in the state through a collaborative network involving the Khadi and Village Industries Commission (KVIC), State Khadi and Village Industries Boards (KVIBs), and District Industries Centres (DICs), alongside various banks. These agencies work in concert to channel government subsidies and facilitate credit linkage for eligible beneficiaries.

The PMEGP, a credit-linked subsidy scheme, was initially launched in August 2008 by merging two earlier programmes: the Prime Minister’s Rojgar Yojana (PMRY) and the Rural Employment Generation Programme (REGP). The scheme has been approved for continuation over the 15th Finance Commission Cycle, spanning five years from 2021-22 to 2025-26, with a substantial outlay of Rs. 13,554.42 crore nationally.

Why it matters

The PMEGP holds significant importance for Assam, a state where employment generation and skill development are crucial for economic upliftment. By offering financial assistance, the programme directly supports the establishment of new micro-enterprises, creating sustainable employment opportunities at the grassroots level. This is particularly vital for traditional artisans, who can leverage the scheme to modernise or expand their craft, and for unemployed youth seeking to transition from job-seekers to job-creators.

The scheme’s focus on both rural and urban areas helps in balanced regional development and aims to mitigate the challenges of rural youth migrating to urban centers in search of livelihoods. According to data, Assam reported assisting 2,282 units and generating an estimated 18,256 employments during a period from 2017-18 to 2022-23. More recently, in the financial year 2022-23, KVIC Chairman Manoj Kumar stated that margin money worth Rs. 53.15 crore was distributed to 2,001 beneficiaries under PMEGP, leading to the creation of 16,008 employment opportunities in Assam. For the fiscal year 2023-24, Assam recorded 1,826 beneficiaries under the programme.

Background

The PMEGP emerged from a need to consolidate and enhance existing self-employment initiatives in India. Prior to its launch in 2008, the Prime Minister’s Rojgar Yojana (PMRY), introduced in 1993, focused on providing self-employment opportunities to educated unemployed youth and women. Concurrently, the Rural Employment Generation Programme (REGP), launched in 1995 by KVIC, aimed to create employment in the Khadi and Village Industries sector in rural areas. The merger of these two schemes into PMEGP was intended to create a more comprehensive and effective credit-linked subsidy programme, expanding its reach to both rural and urban non-farm sectors.

The Ministry of Micro, Small and Medium Enterprises (MSME) is the nodal ministry for PMEGP, reflecting the government’s commitment to strengthening the MSME sector, which contributes significantly to India’s Gross Domestic Product and employment. KVIC serves as the national nodal agency, with State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs), and District Industries Centres (DICs) implementing the scheme at the state and district levels. These implementing agencies also collaborate with various banks to ensure the smooth flow of credit and subsidies to entrepreneurs.

Key details

The PMEGP offers financial assistance in the form of a margin money subsidy on bank loans for setting up new micro-enterprises.

The maximum project cost admissible for subsidy has been enhanced to Rs. 50 lakh for the manufacturing sector and Rs. 20 lakh for the service sector for new units.

The subsidy rates vary based on the beneficiary category and location:

  • For General Category beneficiaries, the subsidy is 15 percent of the project cost in urban areas and 25 percent in rural areas.
  • For Special Category beneficiaries (including SC/ST/OBC/Minorities/Women, Ex-servicemen, Physically Handicapped, Transgenders, and those from the North-Eastern Region, Hill and Border areas), the subsidy is 25 percent in urban areas and 35 percent in rural areas.

Beneficiaries are required to contribute a percentage of the project cost: 10 percent for the General Category and five percent for Special Categories.

For projects costing above Rs. 10 lakh in the manufacturing sector and above Rs. five lakh in the business/service sector, beneficiaries must possess at least an VIII standard pass educational qualification. There is no income ceiling for assistance under PMEGP.

The scheme also provides for a second loan for the upgradation and expansion of well-performing existing PMEGP/REGP/MUDRA units. For these second loans, the maximum project cost can be up to Rs. one crore, with a subsidy of 15 percent (20 percent for North-Eastern Region and hilly areas).

Certain activities are included in a negative list and are not eligible for assistance, such as industries connected with meat, intoxicant items like bidi and pan, and the cultivation of crops or plantations.

Reactions

Officials in Assam have consistently highlighted the importance of PMEGP in the state’s development agenda. In 2017, Assam Commissioner of Industries and Commerce K.K. Dwivedi described the PMEGP as an “effective scheme to tackle unemployment and generate sustainable employment opportunities in rural and urban areas.” He urged financial institutions, particularly banks, to expedite the disbursement of margin money to ensure beneficiaries receive timely support.

More recently, KVIC Chairman Manoj Kumar reiterated the Commission’s commitment to creating sustainable employment opportunities in Assam, even in remote areas. He emphasised that initiatives like PMEGP are crucial for empowering rural communities and aligning with the Prime Minister’s vision of “Viksit & Atmanirbhar Bharat.”

What’s next

The PMEGP is currently operational and will continue to be implemented across Assam as part of its national extension until the financial year 2025-26. Aspiring entrepreneurs and traditional artisans in the state are encouraged to utilise the programme’s provisions for setting up or upgrading their micro-enterprises. The online application process remains a key channel for prospective beneficiaries. Implementing agencies, including KVIC, KVIBs, and DICs, are expected to continue organising awareness camps and workshops to educate potential applicants about the scheme and its benefits.

Quick FAQs

Who is eligible to apply for PMEGP in Assam?

Any individual above 18 years of age is eligible. There is no income ceiling. For projects costing above Rs. 10 lakh in manufacturing or Rs. five lakh in service sectors, an VIII standard pass is required. Only new projects are considered, though a second loan for upgradation is available for existing successful units.

What kind of financial assistance does PMEGP offer?

PMEGP provides a credit-linked subsidy on bank loans for setting up micro-enterprises. The subsidy ranges from 15 percent to 35 percent of the project cost, depending on the beneficiary category (General or Special) and the location of the unit (urban or rural).

What are the maximum project costs under PMEGP?

For new projects, the maximum cost admissible for subsidy is Rs. 50 lakh in the manufacturing sector and Rs. 20 lakh in the service sector. For upgradation of existing units, a second loan can be availed for projects up to Rs. one crore.

How can one apply for the PMEGP scheme?

Applications for the PMEGP scheme can be submitted online through the official PMEGP e-portal. Applicants are also required to submit a printout of their application along with a Detailed Project Report and other necessary documents to the respective implementing agencies.