GO TO HOME

 

OFFICE OF THE JOINT DIRECTOR, DISTRICT INDUSTRIES CENTRE, SHIRWAD, KARWAR- 581 306

Prime Minister’s Employment Generation Programme (PMEGP)

  
1.          Ministry of Micro, Small and Medium Enterprises (MoMSME) has launched a new credit linked subsidy programme called Prime Minister’s Employment Generation Programme (PMEGP) on 61st anniversary of Indian Independence by merging the two schemes that were in operation till 31.03.2008 namely Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas. PMEGP will be a central sector scheme to be administered by the Ministry of MSME.

2.        The subsidy levels, the cost limit of projects or units that could be established under PMRY which was extended to rural areas as well in 1994-95, were quite low and unattractive compared to those available to the beneficiaries in REGP. While the maximum subsidy admissible was Rs.12500 and the maximum cost of project that could be established was Rs.5 lakh under PMRY, the maximum subsidy that was admissible was Rs.4 lakh and the maximum cost of project that could be established was Rs.25 lakh under REGP for a beneficiary belonging to General category. There were more attractive programmes for creation of self employment opportunities being operated by many State Governments. Recovery rates of loans under PMRY were also considerably less than those under REGP. PMEGP improves upon the subsidy levels and cost limits of projects compared to those available so far under PMRY and ensures that the attractiveness of REGP is not diluted in any way while simultaneously strengthening the selection process, implementation and monitoring mechanism.


3.        The subsidy levels under PMEGP are as under: 


Categories of beneficiaries under PMEGP

Owner’s
contribution

Rate of Subsidy

 

 

(of cost of Project)

Area 

 

Urban

Rural

General

10%

15%

25%

Special (including SC/ STs/ OBCs/ Minorities/ Women, Ex-servicemen, Physically Handicapped, NER, Hill and Border Areas) 

05%

25%

35%

TOP

4.       The upper limit of the cost of project that could be setup in the manufacturing sector is Rs.25 lakh while that in the business/service sector is Rs.10 lakh. There are no ceiling limits of annual income in respect of beneficiaries while a minimum educational qualification of VIII standard pass will be required for beneficiaries in respect of projects costing more than Rs.10 lakh in manufacturing sector and more than Rs.5 lakh in business/service sector. The beneficiaries would be identified, inter alia, with the help of Panchayats, Special Awareness Camps and will be provided with a mandatory Entrepreneurship Development Programme (EDP) training of a duration of two to three weeks. The scheme envisages electronic tracking of applications, 100 per cent verification of projects/units that will be established and model project profiles have been updated in association with banks. The scheme will be implemented at the national level through Khadi and Village Industries Commission (KVIC), an organization created under an Act of Parliament reporting to MoMSME which will place the funds of Government subsidy with the participating banks which in turn will disburse the same to the beneficiaries on receipt of applications and their own contribution ‘upfront’ in accordance with the guidelines of the scheme.


5.     While KVIC has been given the overall responsibility for implementing PMEGP at the national level, it will directly do so in respect of the targets for rural areas, as defined in the KVIC Act, through its State Offices and State Khadi and Village Industries Boards (KVIBs). Implementation of PMEGP in urban areas and other rural areas will be done through the State Governments {District Industries Centres (DICs)}. The newly introduced Rajiv Gandhi Udyami Mitra Yojana of MoMSME can also be tapped for providing handholding support to the beneficiaries under PMEGP.


6.     Budget Estimates 2008-09 have provided Rs.823 crore for PMEGP which includes Rs.83 crore towards Backward and Forward linkages including EDP training, publicity, marketing support, e-tracking of applications, physical verification of projects and so on. An estimated 6.17 lakh additional employment opportunities are targeted to be generated in 2008-09. The estimated total outlay for subsidy under PMEGP is Rs.4485 crore in addition to Rs.250 crore earmarked for providing Backward and Forward linkages to the micro enterprises between 2008-09 to 2011-2012 leading to an estimated generation of around 37.38 lakh additional employment opportunities. The scheme will be got independently reviewed after two years of its implementation.


7.     The detailed guidelines of the scheme are being prepared by KVIC and will be published  and also made available on website shortly.

TOP

Inviting applications:

The State/Divisional Directors of KVIC in consultation with KVIB AND Director of Industries of respective states (for DICs) will give advertisements locally through print & electronic media inviting applications along with project proposals from prospective beneficiaries desirous of establishing the enterprise/ starting of service units under PMEGP.  The expenditure for said advertisements will be met out from Backward & Forward Linkages fund.
The beneficiaries can submit their applications in the prescribed format at nearest KVIC/KVIB/DIC offices.  The beneficiary can also submit application directly to the Bank.  However, the Bank will forward the same to respective District Task Force Committee for consideration purpose.  The format of ap;placation may also be down loaded from the KVIC Web-site in www.kvic.org.in and www.pmegp.in

2. i) KVIC/KVIB/DIC offices, after ascertaining that the applications and the project fulfills the criteria laid down under the scheme will forward the same to the respective District Task Force Committees within seven working days of the last date of receipt of applications.
ii) The District Task Force Committee will meet once in a month to scrutinize the applications, conduct interviews for the prospective beneficiaries and short list the applications forwarding to the banks for sanctioning purpose.  The District Task Force Committee may also call for further details, if any, required from the beneficiaries for the consideration.
iii)  After short listing the applications received through KVIC/KVIB/DIC or any other sources, the same will be bifurcated and the District Task Force Committee will be forward the same to respective Banks as per the choice of the beneficiary in the designated colour code (KVIC-White, KVIB-Yellow &  DIC- Blue).

TOP

3. Sanction of applications:
After receiving the  applications duly recommended by the District Task Force Committee, the financing branch will take their own credit decision for sanction the project under PMEGP scheme.  Once sanctioned, a sanctioning order will be issued in favour of beneficiary under intimation to KVIC/KVIB/DIC as the case may be i.e from whom the Government subsidy will be availed.

4. EDP Training:

  • After issuance of the sanction order by the financing branch of the Bank and receipt of the copy of the same, the beneficiary must have to under go EDP training for the purpose of release of funds.
  • The State/Divisional Directors of KVIC,KVIB & DICs will arrange the EDP training to the beneficiaries through  KVIC/KVIB/DIC/Ministry of MSME/ Accredited Training Centers within a period of one month of the receipt of the intimation.
  • After completion of the EDP training, the Principal of the concerned training center will issues a Certificate to the effect in favour  of the beneficiary and also forward a copy to the financing branch of the beneficiary.

5. Release of Bank Loan:

     As soon as the financing branch received the EDP training completion certificate, Bank will release loan as per the scheme and copy of the release order should be endorsed to KVIC/KVIB/DIC as the case may be

The subsidy levels under PMEGP are as under: 


Categories of beneficiaries under PMEGP

Owner’s
contribution

Rate of Subsidy

 

 

(of cost of Project)

Area 

 

Urban

Rural

General

10%

15%

25%

Special (including SC/ STs/ OBCs/ Minorities/ Women, Ex-servicemen, Physically Handicapped, NER, Hill and Border Areas) 

05%

25%

35%

TOP

6. Eligibility Conditions of Beneficiaries

  • Any individual, above 18 years of age
  • There will be no income ceiling for assistance for setting up projects under PMEGP.
  • For setting up of project costing above Rs. 10 lakh in the manufacturing sector and above Rs. 5 lakh in the business / service sector, the beneficiaries should possess at least VIII standard pass educational qualification.
  • Assistance under the Scheme is available only for new projects sanctioned specifically under the PMEGP.
  • Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme) are also eligible for assistance under PMEGP.
  • Institutions registered under Societies Registration Act, 1860.
  • Production Co-operative Societies, and
  • Charitable Trusts.
  • Existing Units (under PMRY, REGP or any other scheme of Government of India or State Government) and the units that have already availed Government subsidy under any other scheme of Government of India or State Government are not eligible.

7. Financial Institutions

  • 27 Public Sector Banks,
  • All Regional Rural Banks.
  • Co-operative Banks approved by State Level Task Force Committee headed by Principal Secretary (Industries) / Commissioner (Industries)
  • Private Sector Scheduled Commercial Banks approved by State Level Task Force Committee headed by Principal Secretary (Industries)/ Commissioner (Industries)
  • Small Industries Development Bank of India (SIDBI).

TOP

8. Rate of interest and repayment schedule

          Normal rate of interest shall be charged.  Repayment schedule may range between 3 to 7 years after an initial moratorium as may be prescribed by the concerned bank/financial institution.  It has been observed that banks have been routinely insisting on credit guarantee coverage irrespective of the merits of the proposal.  This approach needs to be discouraged.

          RBI will issue necessary guidelines to the Banks to accord priority in sanctioning projects under PMEGP. RBI will also issue suitable implementing the Scheme.

9. Village Industry

          Any village Industry including Coir based projects (except those mentioned in the negative list) located in the rural area which produces any goods or renders any service with or without the use of power and in which the fixed capital investment per head of a full time artisan or worker i.e. Capital Expenditure on workshop / workshed, machinery and furniture divided by full time employment created by the project does not exceed Rs. 1.00 lakh in plain areas and Rs. 1.50 lakh in hilly areas.

10. Rural Area

  • Any area classified as Village as per the revenue record of the State / Union Territory, irrespective of population.
  • It will also include any area even if classified as town, provided its population does not exceed 20,000 persons.

11. Negative List of Activities

          The following list of activities will not be permitted under PMEGP for setting up of micro enterprises / projects / units.

  • Any industry / business connected with Meat (slaughtered), i.e. processing, canning and / or serving items made of it as food, production / manufacturing or sale of intoxicant items like Beedi / Pan / Cigar/ Cigarette etc., any Hotel or Dhaba or sales outlet serving liquor, preparation / producing tobacco as raw materials, tapping of toddy for sale.
  • Any industry / business connected with cultivation of crops / plantation like Tea, Coffee, Rubber etc.  Sericulture (Cocoon rearing), Horticulture, Floriculture, Animal Husbandry like Pisciculture, Piggery, Poultry, Harvester machines etc.
  • Manufacturing of Polythene carry bags of less than 20 microns thickness and manufacture of carry bags or containers made of recycled plastic for storing, carrying, dispensing or packaging of food stuff and any other item which causes environmental problems
  • Industries such as processing of Pashmina Wool and such other products like hand spinning and hand weaving, taking advantage of Khadi Programme under the purview of Certification Rules and availing sales rebate.
    • Transport

    TOP

    13.EXEMPTION FROM PAYMENT OF ELECTRICITY DUTY:

    Micro & Small Mfg. Enterprises

    100% Exemption of electricity duty / tax shall be available to new micro and small manufacturing enterprises only for the initial period of 5 years, 4 years and 3 years in Zone-1, Zone-2 and Zone-3 respectively.

    14. Technology Up gradation, Quality Certification and patent
    Registration Micro & Small Mfg. Enterprises

    • Interest subsidy on TU Loan :Zone 1, 2 & 3: 5% on loan availed from KSFC, KSIIDC & Scheduled       commercial banks, which are not covered under CLCSS of GOI.
    • ISO series certification :Zone 1,2,3 & 4 : 75 % of cost (max. Rs. 75,000).
    • BIS Certification :50% of fees payable to BIS. (max  Rs. 20,000) and 25% of cost (max. Rs. 50,000) for purchase of testing equipments as approved by BIS.
    • Patent registration :75 % of cost of fees payable to Patent Office (max. Rs. 1.25 lakhs) and 50% of cost (max 75,000) towards attorney fees, patent search etc.
    • Technology Adoption :25% of cost (max. Rs. 50,000) for adopting technology from recognized national laboratories.
    • Technology Business Incubation Centre : 25% of the project cost (max : Rs. 50 lakhs).

    15. Water harvesting / Conservation Measures :

    Small & Medium Mfg. enterprises in all Zones.
    (i) Rain Water harvesting   :  50% of cost (max. Rs. 1 lakh)
    (ii) Waste water recycling   :  50% of cost (max. Rs. 5 lakh)
    (iii) Zero discharge process  :  50% of cost (max. Rs. 5 lakh)

    16. Energy Conservation :

          Small & Medium mfg. enterprises in all zones. Practicing Energy conservation measures resulting in reduction of Energy Consumption of atleast 10% of earlier consumption : 10% of capital cost (max Rs. 5 lakh).

    Use of non- conventional energy sources : 10% of capital cost (max. Rs. 5 lakh).

    TOP

    17.  Addl. Incentives to the enterprises following Reservation Policy of the State

    Medium, Large and Mega Manufacturing Enterprises in all zones employing more than 100 persons :

    50% reimbursement of expenditure incurred for employees coming under reserved category towards contribution to ESI & EPF schemes for a period of initial 5 years.

    18.  Refund of cost incurred for preparation Project Reports :

    Micro & Small Mfg. Enterprises

           Zone 1,2 & 3 : The cost incurred for preparation of project reports by TECSIK / CEDOK/ KSFC or any other recognized institutions for availing loans shall be reimbursed to the maximum of Rs. 10,000/- per unit subject to financing of the unit.

    19. Support to Sugar Sector :

           New sugar factories and existing sugar factories who have not availed purchase tax deferment having co-generation facilities and ethanol production would be considered for conversion of purchase tax on sugar came as interest free loan on case to case basis depending on the financial position of the factory.

    In case of existing Sugar factories which establish co-generation plants, ethanol plant, such investment will be treated as expansion for  availing incentives & concessions as per this Policy, but limited to the investment made on such additional projects.

    HOME