PMEGP
PRIME MINISTERS EMPLOYMENT GENERATION PROGRAMME
Government of India has approved the introduction of a new credit linked subsidy
programme called Prime Minister‟s Employment Generation Programme (PMEGP) by merging the two schemes that were in operation till 31.03.2008 namely Prime Minister‟s Rojgar Yojana (PMRY) and Rural employment Generation Programme (REGP) for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas. PMEGP will be a central sector scheme to be administered by the Ministry of Micro, Small and Medium Enterprises (MoMSME). The Scheme will be implemented by Khadi and Village Industries Commission (KVIC), a statutory
organization under the administrative control of the Ministry of MSME as the single nodal agency at the National level.
At the State level, the Scheme will be implemented through
State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs) and District
Industries Centres (DICs) and banks. The Government subsidy under the scheme will be
routed by KVIC through the identified Banks for eventual distribution to the
beneficiaries/entrepreneurs in their Bank accounts. The Implementing Agencies, namely
KVIC, KVIBs and DICs will associate reputed Non-Government Organization
(NGOs)/reputed autonomous institutions/Self Help Groups (SHGs)/ National Small
Industries Corporation (NSIC)/Udyami Mitras empanelled under Rajiv Gandhi Udyami
Mitra Yojana (RGUMY), Panchayati Raj institutions and other relevant bodies in the
implementation of the Scheme, especially in the area of identification of beneficiaries, of
area specific viable projects, and providing training in entrepreneurship development.
Guidelines For Prime Minister’s Employment Generation Programme (PMEGP)
Government of India has approved the introduction of a new credit linked subsidy programme called Prime Minister‟s Employment Generation Programme (PMEGP)
by merging the two schemes that were in operation till 31.03.2008 namely Prime Minister‟s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) for
generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas. PMEGP will be a central sector scheme to be administered by the Ministry of Micro, Small and Medium Enterprises (MoMSME).
The Scheme will be implemented by Khadi and Village Industries Commission (KVIC), a statutory organization under the administrative control of the Ministry of MSME as the single nodal agency at the National level. At the State level, the Scheme will be implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) and banks. The Government subsidy under the scheme will be routed by KVIC through the identified Banks for eventual distribution to the
beneficiaries/entrepreneurs in their Bank accounts.
The Implementing Agencies, namely KVIC, KVIBs and DICs will associate reputed Non-Government Organization (NGOs)/reputed autonomous institutions/Self Help Groups (SHGs)/ National Small Industries Corporation (NSIC)/Udyami Mitras empanelled under Rajiv Gandhi Udyami Mitra Yojana (RGUMY), Panchayati Raj institutions and other relevant bodies in the implementation of the Scheme, especially in the area of identification of beneficiaries, of area specific viable projects, and providing training in entrepreneurship development.
(i) To generate employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures/projects/micro enterprises.
(ii) To bring together widely dispersed traditional artisans/ rural and urban unemployed youth and give them self-employment opportunities to the extent possible, at their place.
(iii) To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth in the country, so as to help arrest migration of rural youth to urban areas.
(iv) To increase the wage earning capacity of artisans and contribute to increase in the growth rate of rural and urban employment.
Levels of funding under PMEGP
Categories of beneficiaries under PMEGP
| Beneficiary‟s contribution (of project cost)
| Rate of Subsidy (of project cost)
| Rate of Subsidy (of project cost)
|
Area (location of project/unit)
|
| Urban
| Rural
|
General Category
| 10%
| 15%
| 25%
|
Special (including SC / ST / OBC /Minorities/Women, Ex- servicemen, Physically handicapped, NER, Hill and Border areas etc.
| 05% | 25%
| 35%
|
Note: (1) The maximum cost of the project/unit admissible under manufacturing sector is Rs. 25 lakh.
(2) The maximum cost of the project/unit admissible under business/service sector is Rs. 10 lakh.
(3) The balance amount of the total project cost will be provided by Banks as term loan
- Any individual, above 18 years of age
- There will be no income ceiling for assistance for setting up projects under PMEGP.
- For setting up of project costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business /service sector, the beneficiaries should possess at least VIII standard pass educational qualification.
- Assistance under the Scheme is available only for new projects sanctioned specifically under the PMEGP.
- Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme) are also eligible for assistance under PMEGP.
- Institutions registered under Societies Registration Act, 1860.
- Production Co-operative Societies
- Charitable Trusts.
- Existing Units (under PMRY, REGP or any other scheme of Government of India or State Government) and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are not eligible.
(i) A certified copy of the caste/community certificate or relevant document issued by the competent authority in the case of other special categories, is required to be produced by the beneficiary to the concerned branch of the Banks along with the Margin Money (subsidy) Claim.
(ii) A certified copy of the bye-laws of the institutions is required to be appended to the Margin Money (subsidy) Claim, wherever necessary.
(iii) Project cost will include Capital Expenditure and one cycle of Working Capital. Projects without Capital Expenditure are not eligible for financing under the Scheme. Projects costing more than Rs.5 lakh, which do not require working capital, need clearance from the Regional Office or Controller of the Bank‟s Branch and the claims are required to be submitted with such certified copy of approval from Regional Office or Controller, as the case may be.
(iv) Cost of the land should not be included in the Project cost. Cost of the ready built as well as long lease or rental Work-shed/Workshop can be included in the project cost subject to restricting such cost of ready built as well as long lease or rental workshed/workshop to be included in the project cost calculated for a maximum period of 3 years only.
(v) PMEGP is applicable to all new viable micro enterprises, including Village Industries projects except activities indicated in the negative list of Village Industries. Existing/old units are not eligible (Para 29 of the guidelines refers).
Note:
(1) The Institutions/Production Co-operative Societies/Trusts specifically registered as such and SC/ ST/ OBC/ Women/ Physically Handicapped / Ex-Servicemen and Minority Institutions with necessary provisions in the bye- laws to that effect are eligible for Margin Money (subsidy) for the special categories. However,
for Institutions /Production Cooperative Societies/Trusts not registered as belonging to special categories, will be eligible for Margin Money (Subsidy) for
general category.
(2) Only one person from one family is eligible for obtaining financial assistance for setting up of projects under PMEGP. The family includes self and spouse.
(i) 27 Public Sector Banks.
(ii) All Regional Rural Banks.
(iii) Co-operative Banks approved by State Level Task Force Committee headed by Principal Secretary (Industries)/Commissioner (Industries)
(iv) Private Sector Scheduled Commercial Banks approved by State Level Task Force Committee headed by Principal Secretary (Industries)/Commissioner (Industries).
(v) Small Industries Development Bank of India (SIDBI).
The identification of beneficiaries will be done at the district level by a Task Force consisting of representatives from KVIC/State KVIB and State DICs and Banks. The Task force would be headed by the District Magistrate / Deputy Commissioner / Collector concerned. The Bankers should be involved right from the beginning to ensure that bunching of applications is avoided. However, the applicants, who have already undergone training of at least 2 weeks under Entrepreneurship Development Programme (EDP) / Skill Development Programme (SDP) / Entrepreneurship cum Skill Development Programme (ESDP) or Vocational Training (VT) will be allowed to submit applications directly to Banks. However, the Banks will refer the application to the Task Force for its consideration. Exaggeration in the cost of the project with a view only to availing higher amount of subsidy should not be allowed. KVIC will devise a score card in consultation with SBI and RBI, and forward it to the District Level Task Force and other State/District functionaries. This score board will form the basis for the selection of beneficiaries. This score card will also be displayed on the websites of KVIC and Ministry. The selection process should be through a transparent, objective and fair process and Panchayati Raj Institutions should be involved in the process of selection (Para 11 (1) of the guidelines refers).
7.1 The Bank will sanction 90% of the project cost in case of General Category of beneficiary/institution and 95% in case of special category of the beneficiary/institution, and disburse full amount suitably for setting up of the project.
7.2 Bank will finance Capital Expenditure in the form of Term Loan and Working Capital in the form of cash credit. Project can also be financed by the Bank in the form of Composite Loan consisting of Capital Expenditure and Working Capital. The amount of Bank Credit will be ranging between 60-75% of the total project cost after deducting 15-35% of margin money (subsidy) and owner‟s contribution of 10% from beneficiaries belonging to general category and 5% from beneficiaries belonging to special categories. This scheme will thus require enhanced allocations and sanction of loans from participating banks. This is expected to be achieved as Reserve Bank of India (RBI) has already issued guidelines to the Public Sector Banks to ensure 20 % year to year growth in credit to MSME Sector. SIDBI is also strengthening its credit operations to micro enterprises so as to cover 50 lakh additional beneficiaries over five years beginning 2006-07, and is recognized as a participating financial institution under PMEGP besides other scheduled/Commercial Banks.
7.3 Though Banks will claim Margin Money (subsidy) on the basis of projections of Capital Expenditure in the project report and sanction thereof, Margin Money (subsidy) on the actual availment of Capital Expenditure only will be retained and excess, if any, will be refunded to KVIC, immediately after the project is ready for commencement of production.
7.4 Working Capital component should be utilized in such a way that at one point of stage it touches 100% limit of Cash Credit within three years of lock in period of Margin Money and not less than 75% utilization of the sanctioned limit. If it does not touch aforesaid limit, proportionate amount of the Margin Money (subsidy) is to be recovered by the Bank/Financial Institution and refunded to the KVIC at the end of the third year.
7.5 Rate of interest and repayment schedule Normal rate of interest shall be charged. Repayment schedule may range between 3 to 7 years after an initial moratorium as may be prescribed by the concerned bank/financial institution. It has been observed that banks have been routinely insisting on credit guarantee coverage irrespective of the merits of the proposal. This approach needs to be discouraged. RBI will issue necessary guidelines to the Banks to accord priority in sanctioning projects under PMEGP. RBI will also issue suitable guidelines as to which RRBs and other
banks will be excluded from implementing the Scheme.
Any Village Industry including Coir based projects (except those mentioned in the negative list) located in the rural area which produces any goods or renders any service with or without the use of power and in which the fixed capital investment per head of a 7 full time artisan or worker i.e. Capital Expenditure on workshop/ workshed, machinery and furniture divided by full time employment created by the project does not exceed Rs. 1 lakh
in plain areas and Rs.1.50 lakh in hilly areas.
J&K KHADI & VILLAGE INDUSTRIES BOARD
Address:
5th Floor, Jawahar Lal Nehru Udyog Bhawan, Jammu-180004 ( Nov-April)
3rd Floor, Sanat Ghar, Bemina-Srinagar-190018 (May-October)
Phone: 0194-2493575, 0194- 2493583
Email: [email protected]