Indian Economy News

Prime Minister’s Employment Generation Programme (PMEGP) assisted 63% of units under manufacturing sector and 93% of units under service sector having projects costing up to Rs. 10 Lakh (US$ 11,111) during the last five years

The Prime Minister’s Employment Generation Programme (PMEGP) has been a major factor in enhancing the development of micro-enterprises in India over the past five years. According to a recent announcement made by the Ministry of Micro, Small & Medium Enterprises (MSME), the PMEGP scheme has assisted around 63% of the units in the manufacturing sector and 93% of the units in the service sector with project costs not exceeding Rs. 10 lakh (US$ 11,111) during the period from FY21 to FY25. The PMEGP scheme helps its beneficiaries establish new micro-enterprises by providing them with small loans and gives special preference to applicants with smaller project costs, which helps to promote entrepreneurship and employment generation in smaller towns and rural areas.
To facilitate ease of access to loans and subsidies, special preference is given to applications with project costs not exceeding Rs. 10 lakh (US$ 11,111), and as per the guidelines of the Reserve Bank of India (RBI), banks are not allowed to demand collateral security for loans not exceeding this amount. This has helped to increase the reach of the PMEGP scheme among entrepreneurs. Furthermore, there are no educational requirements for establishing projects with costs not exceeding Rs. 10 lakh (US$ 11,111) in the manufacturing sector or Rs. 5 lakh (US$ 5,556) in the service sector, which helps to reduce barriers to entry and promote participation. The ministry uses the Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength (CHAMPIONS) portal to handle grievances, respond to queries about schemes, and facilitate contact between MSMEs and senior government officials and financial institutions, thus helping to promote small businesses across the country.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.