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Prime Minister’s Employment Generation Programme

Funded in the 2026-27 Union Budget: Union Expenditure Budget 2026-27 (Feb 2026, Demand No. 68 (Ministry of Micro, Small and Medium Enterprises), item 8 Prime Minister Employment Generation Programme (PMEGP), BE 2026-27 ₹4500.00 crore; Notes item 8)

PMEGP · Ministry of MSME (implemented by KVIC, State KVIBs and District Industries Centres) · Central scheme, all states

A bank-loan-linked subsidy (margin money) for a new small enterprise — including food processing, dairy, poultry, fishery and beekeeping units — of 15% to 35% of the project cost.

Processing & value additionDairy & cattlePoultry, goat & piggeryFisheriesBeekeeping
Lead benefit
35%of the cost, at most
Components
3each read from the document
Who can apply
8kinds of applicant
Closing date
Seasonalsee “When to apply”

What it pays

35%of the cost, at most

New unit in a village: 25% of the project cost (35% for SC, ST, women and other special categories), counted on up to ₹50 lakh.

Read from PMEGP Guidelines (revised, MoMSME O.M. 07.12.2023) · clause 3.2(i) table and Note 1–4; 10 (rural area) · p. 4, 5, 10 · Our copy (PDF)
What the document says, word for word

The special category also covers OBC, minorities, ex-servicemen, transgenders, the differently-abled, Aspirational Districts and notified Hill and Border areas (para 3.2); the calculator applies it only to SC, ST, women and the North-East, so check your category. Project cost counted up to ₹50 lakh for manufacturing (food processing counts as manufacturing) and ₹20 lakh for service/business; above that the bank may lend without subsidy (para 3.2 notes). Your own share is 10% (5% for the special category). Land is not counted (para 4.1(ii)). Only one person per family (self and spouse) (para 4.1 note).

“Categories of beneficiaries under PMEGP (for setting up of new enterprises) … Rate of Subsidy (of project cost) … Urban / Rural: General Category 15% 25%; Special Category (including SC,ST,OBC ,Minorities, Women, Ex-Servicemen, Transgenders, Differentlyabled, NER, Aspirational Districts, Hill and Border areas(as notified by the Government) etc. 25% 35%. Note 1) The maximum cost of the project/unit admissible for Margin Money subsidy under Manufacturing sector is Rs. 50 lakhs.”
25%of the cost, at most

New unit in a town or city: 15% of the project cost (25% for SC, ST, women and other special categories), counted on up to ₹50 lakh.

Read from PMEGP Guidelines (revised, MoMSME O.M. 07.12.2023) · clause 3.2(i) table and Note 1–4 · p. 4, 5 · Our copy (PDF)
What the document says, word for word

The special category also covers OBC, minorities, ex-servicemen, transgenders, the differently-abled, Aspirational Districts and notified Hill and Border areas (para 3.2); the calculator applies it only to SC, ST, women and the North-East, so check your category. Project cost counted up to ₹50 lakh for manufacturing (food processing counts as manufacturing) and ₹20 lakh for service/business; above that the bank may lend without subsidy (para 3.2 notes). Your own share is 10% (5% for the special category). Land is not counted (para 4.1(ii)). Only one person per family (self and spouse) (para 4.1 note).

“Categories of beneficiaries under PMEGP (for setting up of new enterprises) … Rate of Subsidy (of project cost) … Urban / Rural: General Category 15% 25%; Special Category (including SC,ST,OBC ,Minorities, Women, Ex-Servicemen, Transgenders, Differentlyabled, NER, Aspirational Districts, Hill and Border areas(as notified by the Government) etc. 25% 35%. Note 1) The maximum cost of the project/unit admissible for Margin Money subsidy under Manufacturing sector is Rs. 50 lakhs.”
15%of the cost, at most (20% in the North-Eastern Region)

Second loan to upgrade an existing PMEGP, REGP or MUDRA unit: 15% of the project cost (20% in the North-East and Hill States), up to ₹15 lakh (₹20 lakh).

Read from PMEGP Guidelines (revised, MoMSME O.M. 07.12.2023) · clause 3.2(ii) table and Note 1–4; 4.2 · p. 5, 7 · Our copy (PDF)
What the document says, word for word

Only if the first PMEGP subsidy was adjusted after the 3-year lock-in, the first loan was repaid on time, and the unit makes a profit (para 4.2). Counted on up to ₹1 crore for manufacturing; for service/business up to ₹25 lakh with a maximum subsidy of ₹3.75 lakh (₹5 lakh in NER and Hill States). Your own share is 10%. “Hill States” are not listed in the guideline, so the calculator gives the 20% rate only in the North-East.

“2nd Loan for upgradation of existing PMEGP/REGP/MUDRA units … All Categories … 15% (20% in NER and Hill States). Note 1) The maximum cost of the project/unit admissible for Margin Money subsidy under Manufacturing sector for upgradation is Rs. 1.00 crore. Maximum subsidy would be Rs.15 lakh (Rs.20 lakh for NER and Hill States).”

How much can I claim?

Enter project cost to see the figure.

Read from PMEGP Guidelines (revised, MoMSME O.M. 07.12.2023) · clause 3.2(i) table and Note 1–4; 10 (rural area) · p. 4, 5, 10 · Our copy (PDF)

The special category also covers OBC, minorities, ex-servicemen, transgenders, the differently-abled, Aspirational Districts and notified Hill and Border areas (para 3.2); the calculator applies it only to SC, ST, women and the North-East, so check your category. Project cost counted up to ₹50 lakh for manufacturing (food processing counts as manufacturing) and ₹20 lakh for service/business; above that the bank may lend without subsidy (para 3.2 notes). Your own share is 10% (5% for the special category). Land is not counted (para 4.1(ii)). Only one person per family (self and spouse) (para 4.1 note).

Who can apply

  • Other farmer
  • Small or marginal farmer
  • SC farmer
  • ST farmer
  • Woman farmer
  • Agri entrepreneur
  • Landless
  • Tenant or sharecropper

Papers you need

  • Aadhaar number (para 11.5)
  • Caste certificate or special category certificate, where applicable (para 11.6)
  • Rural area certificate (para 11.6)
  • Project report (para 11.6)
  • Education, EDP or skill training certificate — at least Class VIII pass for projects above ₹10 lakh (manufacturing) or ₹5 lakh (service) (para 4.1, 11.6)

How to apply

  1. Apply online on the PMEGP portal — no paper applications; Aadhaar is mandatory (para 11.2, 11.5).
  2. Upload your project report and certificates; KVIC, the State KVIB or the DIC screens it and sends it to a bank (para 11.6).
  3. Complete the Entrepreneurship Development Programme (EDP) training — 5 days up to ₹5 lakh, 10 days above; not needed up to ₹2 lakh (para 13).
  4. After the loan, register on the Udyam portal; the subsidy is kept in a fixed deposit for 3 years and adjusted into your loan after physical verification (para 4.1(vi), 11.20, 11.23).
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Applying is free. Never pay anyone to apply for you.

When to apply

Applications are online all year; agencies also invite proposals district by district (para 11.1, 11.2).

Combining with other schemes

The documents do not say whether this can be combined with other schemes. Ask the implementing office before you count on both.

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