The Cabinet Committee on Economic Affairs chaired by the Prime Minister Shri Narendra Modi has approved the continuation of Prime Minister's Employment Generation Programme (PMEGP) beyond 12th Plan for three years from 2017-18 to 2019-20 with a total outlay of ₹ 5,500 crore.

Scheme will create sustainable estimated employment opportunities for 15 lakh persons in three financial years.

Khadi and Village Industries Commission (KVIC) is the nodal implementation agency at the national level. At the State/district level, State offices of KVIC, Khadi and Village Industries Boards (KVIBs) and District Industry Centres (DIC) are the implementing agencies. Applications are invited and processed on-line on PMEGP-e-portal. Targets are fixed taking into account:

        I. Extent of backwardness of State;

        II. Extent of unemployment;

        III. Extent of fulfillment of previous year targets;

        IV. Population of State/Union Territory; and

        V. Availability of traditional skills and raw material.

A minimum target of 75 project/district is awarded to all districts of the country to achieve Inclusive Growth. Higher rate of subsidy (25% to 35%) will be applicable for women, SC/ST, OBC, Physically Disabled, NER applicants in rural areas.

The entire process of application flow and fund flow right from receipt of application, processing, sanction by banks, transfer of margin money subsidy till creation of Term Deposit Receipt (TDR) in the name of applicant has been made online. The portal can be accessed at https://www.kviconline.gov.in/pmegpeportal/prneqphome/index.jsp.

Background:

PMEGP is a major credit-linked subsidy programme being implemented by the Ministry of MSME since 2008-09 The Scheme is aimed at generating self-employment opportunities through establishment of micro-enterprises in the non-farm sector by helping traditional artisans and unemployed youth in rural as well as urban areas. A total of 4.55 lakh micro enterprises have been assisted with a margin money subsidy of ₹ 9564.02 crore providing employment to an estimated 37.98 lakh persons from inception till 31.01.2018.

Following modifications/improvements have been made in the Scheme:

• Second loan of upto Rs. one crore to existing and better performing PMEGP units for upgrading with subsidy of 15%;
• Merger of Coir Udyami Yojana (GUY) in PMEGP;
• Introduction of concurrent monitoring and evaluation
• Mandatory Aadhaar and Pan card;
• Geo-tagging of units;
• Negative list under PMEGP amended allowing serving/selling non-vegetarian food at Hotels/Dhabas and Off Farm/Farm Linked activities.
• Dispensing the ratio of 30:30:40 for KVIC/KVIB/DIC.
• Cap the working capital component for manufacturing units to 40% of the project cost and for service/trading sector to 60% of the project cost.

Employment generation programme continuation extends PMEGP to 2019-20, maintaining credit linked subsidies and targeted support across sectors. Continuation of the Prime Minister's Employment Generation Programme (PMEGP) for three years to 2019 20 aims to generate sustainable self employment by assisting micro enterprises in the non farm sector through a credit linked margin money subsidy. KVIC is the national nodal agency with KVIBs and DICs implementing at state/district level; district targets and beneficiary focused higher subsidy rates are applied. The scheme operates via an online portal for application and end to end fund flow, and includes reforms such as mandatory Aadhaar/PAN, geo tagging, concurrent monitoring, a second loan upgrade facility, and caps on working capital.