The Prime Minister’s Employment Generation Programme (PMEGP) is a credit linked subsidy programme initiated in 2008. It integrated two earlier schemes, viz. Prime Minister’s Rojgar Yojana (PMRY) and the Rural Employment Generation Programme (REGP) that were working along similar lines to generate employment among the youth. The integration of these two initiatives helped combine urban and rural efforts and resulted in a more unified approach to set up micro enterprises to increase the number of jobs in the country.
Under this scheme, the beneficiary has to invest only 5-10% of the project cost while the government provides a subsidy of 15-35% of the project based on different criteria. The participating banks provide the rest of the funds as term loans to the entrepreneur. We look at this in some detail in the below section.
The PMEGP scheme is managed under the aegis of the Ministry of Micro, Small and Medium Enterprises (MoMSME) and the Khadi and Village Industries Commission (KVIC) looks at it on a national level. The state-wise efforts are divided among different directorates and boards, among others. These include various khadi and village industries boards across different states, the state directorates of KVIC, the industries centres in districts across the country, and the banks. The accounts in these banks are essentially the medium through which the funds are distributed after the aforementioned directorates, boards, etc. approve the subsidies to specific persons setting up the micro units.
Some organisations working with the directorates and boards include NGOs, Panchayati Raj institutions, the National Small Industries Corporation, and so on. These organisations help in the implementation of the scheme by identifying beneficiaries, focus areas where investment is required and providing training to the youth to take up jobs or set up micro-units themselves.