Scheme Benefits
Benefits Under the Scheme
Margin Money Subsidy
An upfront grant (margin money) is provided directly to the beneficiary's bank account — ranging from 15% to 35% of the project cost depending on category and location.
Collateral-Free Loan
The loan component is covered under CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises), enabling collateral-free finance from banks and financial institutions.
Subsidy Rates
Margin Money Subsidy & Own Contribution
| Beneficiary Category | Subsidy — Urban | Subsidy — Rural | Min. Own Contribution |
|---|---|---|---|
| General Category | 15% | 25% | 10% |
| Special Category* | 25% | 35% | 5% |
* Special Category includes SC/ST/OBC, Minorities, Women, Ex-servicemen, and Physically Handicapped persons.
Project Limits
Maximum Project Cost (Total Investment)
Manufacturing Sector
₹50L
Manufacturing Units
Factories, workshops, and production units engaged in making goods. Working capital capped at 40% of project cost.
Service / Business Sector
₹20L
Service & Business Units
Repair shops, salons, catering, trading, and other service businesses. Working capital capped at 60% of project cost.
Eligibility
Conditions for the Applicant
- Applicant must be 18 years or above at the time of application.
- Minimum educational qualification of 8th Standard Pass is required.
- Only new projects are eligible — existing units or expansions are not covered.
- Eligible entities: Individuals, SHGs (that have not availed subsidy earlier), Trusts, Societies, and Production Cooperative Societies.
- Applicant must not have availed subsidy under any other Central Government scheme previously.
- Partnership firms, LLPs, and Companies are not eligible under PMEGP.
Key Rules
Important Provisions & Rules
📋 Provisions You Must Know
- Capital Expenditure is mandatory — projects without a term loan component are not eligible.
- Working Capital Limits: Maximum 40% of project cost for manufacturers; maximum 60% for service providers.
- Land Cost Exclusion: Purchase of land is not included in the permissible project cost.
- Lock-in Period: The subsidy has a lock-in period of 3 years from the date of release.
- EDP Training: Entrepreneurship Development Programme training (online or offline) is compulsory before the subsidy is released.
- Udyam Registration: Mandatory for all new units applying under PMEGP.
- Aadhaar Requirement: A valid Aadhaar card with demographic authentication is required.
🚫 Negative List — Prohibited Activities
- Meat processing and slaughterhouse-related activities
- Tobacco / Beedi manufacturing
- Liquor serving or production
- Plastic bags (above 20 microns)
- Crop cultivation and allied agricultural activities
Documentation
Documents Required
Aadhaar Card
PAN Card
Address Proof
Caste Certificate (if applicable)
Udyam Registration
Educational Qualification Certificate
Project Report (DPR)
Passport Size Photo
Bank Details
Rural Area Certificate (if applicable)