PMEGP: subsidy rates, eligibility and how to apply
The Prime Minister’s Employment Generation Programme (PMEGP) is one of the most generous schemes for first-time entrepreneurs: a bank loan with a government subsidy of 15–35% of the project cost. It is also one of the most paperwork-heavy. Here is how it works, and where applications usually stall.
How much subsidy
- General category: 15% in urban areas, 25% in rural areas. Your own contribution is 10% of the project cost.
- Special category (SC/ST/OBC, minorities, women, ex-servicemen, persons with disabilities, NER, hill and border areas): 25% urban, 35% rural. Own contribution is 5%.
The bank lends the rest. The subsidy is held for a lock-in period before it is adjusted against the loan.
Who qualifies
- Any individual aged 18 or above — there is no upper age limit.
- Only new units. Existing businesses, and units that already received a government subsidy, are not eligible.
- For manufacturing projects above ₹10 lakh and service projects above ₹5 lakh, the applicant must have passed Class 8.
- Only one person from a family can get PMEGP assistance.
Project limits
Up to ₹50 lakh for manufacturing and ₹20 lakh for service or business units. Some activities are on a negative list and are not eligible at all, so check the activity before you prepare anything.
How to apply
- Prepare a bank-ready project report (DPR) with machinery quotations, a five-year projection and a break-even analysis — this is what the bank actually appraises.
- Apply on the KVIC PMEGP portal. The application goes through a district-level committee to the bank you choose.
- Answer the bank’s questions — revise the DPR if asked.
- Complete EDP training — mandatory before disbursement for most projects: 10 working days above ₹5 lakh, 5 days for ₹2–5 lakh, none up to ₹2 lakh.
- Disbursement — the loan is released and the subsidy is credited by the nodal bank.
Why applications stall
Most delays come from a weak project report, quotations that don’t match the cost sheet, an activity on the negative list, or a location classified differently from what the applicant assumed. Getting those right at the start saves months.
Key takeaways
- Subsidy is 15–35% of project cost, depending on category and location.
- Only new units qualify; one person per family.
- Up to ₹50 lakh for manufacturing, ₹20 lakh for services.
- A strong DPR is what gets the bank to say yes.
Our PMEGP support starts at ₹5,000 for the DPR and application. हिंदी में पढ़ें.
General information, reviewed on 2 October 2026 — not advice for your specific case. Rules change; talk to us before acting.