PM Employment Generation Programme (PMEGP) & Inclusive Growth

Why in News?

Recently, Ministry of Micro Small & Medium Enterprises (MSME) reported a record-breaking performance of PMEGP during 15^th Finance Commission (FC) Meeting

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The FC of India is a constitutional body (Article 280) established by the President every five years to recommend the distribution of tax revenues between the Central and State governments, aiming for equitable fiscal federalism.

15^th FC Performance

• Budget Utilization - Of Rs 13,554.42 crore outlay.

• Enterprises established – Around 4,03,706 (MSME)  Surpassing 4.02 lakh target.

Employment generation – Around 36.33 lakh,

• Rural Dominance - In rural area 80% of units are established, boosting rural Industries.
• Social Inclusion -
  • Women - Account for nearly 40% of total units and received 45% of the total Margin Money subsidy.
  • Social Categories - 54% of beneficiaries belong to SC, ST & OBC.

About PMEGP

• Model Ministry – Ministry of MSME.
• Nature of scheme – Setting up of credit Linked subsidy scheme for new micro – enterprises.
• Implementing Agency – Khadi & Village Industries commission.
• Aim – For rural & urban area generating sustainable employment opportunity.
• Eligible sector – New Micro- Enterprises in the Non-farm sector

Scheme Mechanism

Margin Money (MM) Subsidy – Provided by government on the total project cost.

• Bank Credit - A small percentage (5 to 10%) of the project cost beneficiaries must contribute, while rest is provided as bank loan.
•  Subsidy Rates:
  • General Category -  25% Rural & 15% Urban
  • (SC/ST/OBC/Women/PH/NER) -(Rural). Rural 35% & Urban 25%

Eligibility Criteria – Any individual 18 year & above

• Minimum qualification -  of 8th standard pass for projects costing above Rs10 lakh (Manufacturing) or Rs5 lakh (Service).
• Only new units are eligible for assistance (existing units are not covered).
• Self-Help Groups (SHGs), Institutions registered under Societies Registration Act, and Charitable Trusts are also eligible.

For Reference: PIB | IAS Parliament