Prime Minister's Employment Generation Programme PMEGP

What you get

• Margin money subsidy of 15% of project cost in urban areas and 25% in rural areas for general applicants
• Margin money subsidy of 25% in urban areas and 35% in rural areas for special categories, which include SC, ST, OBC, minorities, women, ex-servicemen, transgender persons, people with disabilities, and units in aspirational districts or hill and border areas
• Own contribution of only 10% of project cost for general applicants and 5% for special categories, with the bank lending the rest
• Projects up to ₹50 lakh in manufacturing and ₹20 lakh in services or business
• Free entrepreneurship training (EDP) for applicants
• Applicants can opt for a CGTMSE guarantee so the loan needs no collateral

Who can apply

• New businesses, or people about to start one.
• Open to businesses in manufacturing, services, food processing and handicrafts.
• Micro enterprises.
• Age 18 or over.
• Project cost up to ₹50 lakh.
• Udyam registration is needed. It is free.
• No income ceiling
• Class VIII pass for projects above ₹10 lakh in manufacturing or above ₹5 lakh in business or services
• Only new projects. Units that already took a government subsidy under another central or state scheme are not eligible.
• One person per family, where family means self, spouse and unmarried children
• The project must include capital expenditure. Land cost is not counted in project cost.
• Trading outlets are allowed only in limited cases, for example shops selling Khadi or village industry products, or outlets backed by manufacturing or service, up to ₹20 lakh
• Udyam Registration is required before physical verification and before the subsidy is adjusted in the loan account

How to apply

1. Register on pmegp.msme.gov.in with Aadhaar and PAN
2. Fill in the project details, including capital expenditure and working capital, and choose the implementing agency and bank
3. The implementing agency checks the application and sends it to the bank
4. The bank appraises and sanctions the loan
5. Complete the EDP training
6. Get Udyam Registration, pass physical verification, and the margin money subsidy is adjusted in the loan account

In person, Offline application forms in regional languages can be handed to the nearest office of the implementing agency (KVIB, District Industries Centre or Coir Board)

In Kerala, Kerala Khadi and Village Industries Board and the KVIC state office for village industry projects, District Industries Centres, and the Coir Board for coir units

Documents to keep ready

• Aadhaar
• PAN
• Project report with capital expenditure and working capital
• Category certificate where special category is claimed
• Udyam Registration before subsidy adjustment

Worth knowing

The approved outlay covered 2021-22 to 2025-26. We have not seen a formal decision continuing the scheme beyond March 2026, but the ministry released ₹1,000 crore of margin money subsidy on 28 October 2026 and reported 25,895 units assisted in FY 2026-27. The portal says sanction and release of subsidy depend on funds allocated for the year.

Where we found this

• PMEGP portal, eligibility and application form (external site) Official
• PIB, Expansion of MSMEs, PMEGP subsidy rates, 2 December 2024 (external site) Official announcement
• PIB, initiatives for women entrepreneurs incl. PMEGP own contribution, 23 July 2026 (external site) Official announcement
• PIB, ₹1,000 crore margin money subsidy released under PMEGP, 28 October 2026 (external site) Official announcement
• PIB, Budget 2025-26 Fuelling MSME Expansion (external site) Official announcement

An independent guide by The Company of Four, not a government website. Schemes change often, so check every detail on the official website before you apply. Links marked ↗ open external websites that we do not run, and we are not responsible for their content. Seen something out of date? Tell us and we will look into it.

Related