In the 21st century, developing countries like India are facing various problems. Unemployment has been a significant problem in India, where the population is growing at a tremendous and uncontrollable rate.
It is one of the rising problems which is pulling down the economic growth and development in the country. There are various reasons for the growing unemployment and poverty, which the government has taken into account in the past few decades.
The government of India is trying and executing every possible effort toward eradicating and reducing the unemployment status in the country. There have been various schemes and programs directed toward this aim.
One of the government’s most popular and effective schemes is the Prime Minister’s Employment Generation Programme (PMEGP). The program is a culmination of two previous schemes, i.e., the Prime Minister’s Rojgar Yojana (PMRY) and the Rural Employment Generation Programme (REGP).
Launched in 2008, the program’s main objective is to facilitate, scale-up, and increase employment opportunities in different states by promoting and setting up MSMEs in rural and urban areas. In this way, the scheme directs the interests towards traditional artisans and the unemployed youth who are willing to work.
Key Highlights And Support Provided
The following points highlight the main attractions of the scheme and important details about the same, including the target beneficiaries, support, and incentives provided.
- The scheme is well-planned and well-directed toward the unemployed people in a structured manner. There are different agencies and authorities at the national and state level. At the former level, Khadi and Village Industries Commission (KVIC) is the controlling authority.
- At the state level, the benefits are provided to the people by state KVIC Directorates, State Khadi and Village Industries Boards (KVIBs), and District Industries Centres (DICs) and banks.
- Apart from the primary objective mentioned above, the scheme aims to provide smooth financial assistance to the MSME units yet to be established. By facilitating the credit system, they will promote the units and enhance employment opportunities.
- The program operates at a huge level by various executing agencies. These include the following:
- Non-Government Organizations (NGOs)
- Reputed autonomous institutions
- Self Help Groups (SHGs)
- National Small Industries Corporation (NSIC)
- Udyami Mitras working under Rajiv Gandhi Udyami Mitra Yojana (RGUMY)
- Panchayati Raj institutions
- The loans and credit system are designed on a categorical basis. The subsidies are distinguished between rural and urban areas. While the beneficiaries’ contribution towards the project is 10% of the total project cost for general categories, the percentage comes down to 5% for minorities (SC/ST/OBC/Minorities/Women/Ex-servicemen/Physically handicapped/NER/Hill and Border).
- The subsidies are provided at an impressive rate of 15% (urban) and 25% (rural) for general category beneficiaries. On the other hand, the rates increase to 25% (urban) and 35% (rural) for beneficiaries belonging to the minorities category.
- There are certain limitations on the project cost in different sectors like manufacturing and service. In the former, the upper limit is INR 25 Lakh, whereas it is INR 10 Lakh for the service or business sector.
- The program is open for all the MSME units yet to be established. The old-established units cannot avail of this scheme.
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Who Can Apply
There are many conditions to fulfill for a person to apply under the scheme. The eligibility criteria for availing of the benefits of PMEGP are shown hereunder.
- The applicant should be at least 18 years of age.
- The person must possess at least an 8th-grade educational qualification certificate if they apply for a project cost above INR 10 Lakh and/or 5 Lakh in the manufacturing and/or service sector, respectively.
- An already established business unit cannot apply under the scheme. The program is only directed toward the newly set up enterprises.
- SHGs are also eligible for PMEGP. However, among these, only those who belong to the ‘Below Poverty Line’ and have not benefited from this scheme earlier can apply.
- Different institutions affiliated with the Societies Registration Act, 1860 can also apply under the initiative.
- Apart from these, production co-operative societies, charitable trusts, and existing units regarded under any government scheme like PMRY and REGP are also eligible to apply.
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How To Apply For The Scheme
The following steps will guide a person to apply under the Prime Minister’s Employment Generation programme.
- The proposals for the project are given through advertisements, radio, and other multi-media sources such as mobile, social media, etc. Since 2016, applicants are mandatorily required to submit applications through online mode.
- Applicants are first required to get an application form from the official website, i.e., msme.gov.in or kviconline.gov.in.
- Click on the PMEGP ePortal to get the User ID and password. This ID and password can be generated at the time of application filling.
- In order to fill out the online form, tap on the button ‘Online Application Form For Individual’.
- The form will ask for the person’s various personal details like name, address, age, etc.
- There are various documents the applicant will be required to attach.
- The form will also ask the applicant to provide their recent clear photograph for the application screening process.
- In the form, a person should carefully put their address. The taluka, district, and Pin Code should be clear and accurate.
- The form will also ask for the activity name and the product’s specifications. Furthermore, the applicant will be required to submit their bank details and the loan requirements or purpose (working capital and capital expenditure).
- After filling in the details, click on the ‘Submit’ button. The screen will provide the applicant ID and password.
- After getting the ID, the remaining formalities and details could be filled in through the PMEGP portal.
- In order to deliver an uninterrupted and smooth application process, the website also gives an FAQs section and a detailed explanatory video.
Learn more about – Top 4 Government Loan Schemes for MSMEs in India
What Documents To Submit For Online Application
In order to successfully complete the screening procedure of the PMEGP registration, the following documents will be required.
- Caste Certificate
- Special Category Certificate (In the case of minorities)
- Rural Area certificate (if applicable)
- Project Report
- Education/ EDP/Skill Development training certificate
If an institution is applying under the scheme, the following documents will also be needed.
- Registration certificate
- Authorization letter/copy of bye-laws authorizing Secretary that permits to apply
- Certificate for Special Category (if applicable)
The most interesting highlight of this scheme is that no collateral security is required. An applicant is safe from the worries of keeping some assets for getting loans. Apart from this, beneficiaries need to attend a mandatory 2-week training session.
The two main components of this scheme are – term loans and cash credit. The projects are partially financed by a term loan and cash credit. For a typical project, the term loan will cover the capital expenditure, while the cash credit will take care of the working capital.
Key Takeaway
There are many schemes and initiatives by the state and national governments which promise to lower the unexpected unemployment rates. But, PMEGP is leading the race in executing the plans.
The scheme has shown positive results since its launch. The youth has benefited through different manufacturing and business units. This scheme has also boosted the MSME sector, rising amidst the poor economic returns.
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