Prime Minister’s Employment Generation Programme (PMEGP) Scheme | UPSC

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Prime Minister's Employment Generation Programme (PMEGP) Scheme | UPSC

Prime Minister’s Employment Generation Programme|PMEGP Scheme UPSC

      HEADLINES:

Ministry of MSME, Government of India warns unscrupulous elements against cheating people in the name of Prime Minister’s Employment Generation Programme (PMEGP) Scheme

      WHY IN NEWS:

Ministry says entire process of application and fund release under PMEGP is online and free of cost

MINISTRY? :- Ministry of Micro,Small & Medium Enterprises
SYLLABUS COVERED: GS 3: Schemes

      LEARNING: 

For PRELIMS it is important to understand the objective of this scheme . Keep a note on beneficiaries and interest rates .

For MAINS keep an eye on the controversies revolving around the scheme . Let us dive in !

      ISSUE: 

Ministry of MSME has alerted the general public and potential entrepreneurs against cheating in the name of Prime Minister’s Employment Generation Programme.

PRIME MINISTER’S EMPLOYMENT GENERATION PROGRAMME (PMEGP) SCHEME

OVERVIEW

  • The scheme is to assist first generation entrepreneurs for setting up of micro enterprises across the country.
  • The Prime Minister Employment Generation Programme (PMEGP) is a Government of India-backed credit linked subsidy scheme.

Under this scheme, beneficiaries can get a subsidy amounting to 15-35% of the project cost from the government.

  • As an entrepreneur, PMEGP can give you the financial assistance required to set up a new project.

PMEGP Scheme UPSC

PMEGP Scheme UPSC

OBJECTIVES

  • To produce employment opportunities in both urban and rural areas in India through the establishment of new self-employment projects, micro-enterprises and ventures.
  • To facilitate self-employment opportunities for widely dispersed traditional artisans/ unemployed rural and urban youth to the degree feasible, at their location.

To generate sustainable and continuous employment to rural and unemployed youth as well as prospective and traditional artisans .

  • The initiative will thereby halt rural youth from migrating to urban areas.
  •  To boost artisan’s income-earning capacity and spur the growth rate of both rural as well as urban employment.

IMPLEMENTATION

  • NATIONAL LEVEL : The scheme is implemented by Khadi and Village Industries Commission (KVIC).
  • STATE LEVEL :  The scheme is implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs)
  • DISTRICT LEVEL : District Industries Centres (DICs) and banks.

KVIC routes government subsidy through designated banks for eventual disbursal to the beneficiaries / entrepreneurs directly into their bank accounts. 

FUNDING

  • Prime Minister’s Employment Generation Programme (PMEGP) is a central sector credit linked subsidy scheme being implemented by the Ministry of MSME since 2008-09.

The maximum cost of the project/unit admissible in manufacturing sector is ₹ 25 lakhs and in the business/service sector, it is ₹ 10 lakhs. 

  • The balance amount of the total project cost will be provided by the banks in the form of term loan and working capital.

SUBSIDY RATES

PMEGP Scheme UPSC

SOURCES : PAISABAZAAR.COM | PMEGP Scheme UPSC

ELIGIBILITY

  • Any individual, above 18 years of age.
  • At least VIII standard pass for projects costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business / service sector.

Only new projects are considered for sanction under PMEGP. 

  • Self Help Groups registered under Societies Registration Act,1860; Production Co-operative Societies, and Charitable Trusts are also eligible.
  • Existing Units and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are NOT eligible.

LOAN ASSISTANCE

  • Banks sanction funding up to 90% to 95% of the project cost.
  • On this, the government provides 15% to 35% as margin money or PMEGP subsidy.
  • The remaining 60% to 75% is provided by the bank as a term loan.

Interest rates are regular, from 11% to 12%.

  • Repayment tenor is 3 to 7 years after a preliminary moratorium.

QUICK REVISION

PMEGP Scheme UPSC

SOURCES : BAJAJFINSERV.IN | PMEGP Scheme UPSC

      IASbhai WINDUP: 

  • Potential entrepreneurs / beneficiaries are being approached by private persons or agencies offering loans under PMEGP Scheme.

These agencies and private persons are handing over loan sanction letters and cheating the entrepreneurs by charging money from them.

  • Ministry has warned the unscrupulous elements against cheating general public in its name.

ONLINE APPLICATIONS

  • The entire process of application and fund flow right from receipt of application to sanction and release of loan by banks to the applicants has been made online .
  • The entire process is through only one Government portal run by Khadi and Village Industries Commission.
  • The portal can be accessed at link below . The whole process is totally free of cost.
     SOURCES:   PIB | PMEGP Scheme UPSC

 

DISCOVER MORE : SCHEMES

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