Prime Minister’s Employment Generation Programme (PMEGP) is a major credit-linked subsidy scheme launched by merging two schemes namely Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) for generating employment opportunities by establishing micro-enterprises in urban and rural areas in the non-farm sector.
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- The scheme was launched in 2008.
- It is a central sector scheme.
- Ministry of Micro, Small and Medium Enterprises (MSME) administers the programme.
- The programme is being implemented by the Khadi and Village Industries Commission (KVIC) at the national level. It is the single nodal agency for the implementation of the programme.
- The Scheme is being implemented through banks, District Industries Centres (DICs), State KVIC Directorates and State Khadi and Village Industries Boards (KVIBs) at the state level.
- Individuals above the age of 18 years, Self Help Groups (SHGs), Cooperative Societies involved in the production, and institutions that are registered under the Societies Registration Act of 1860 are eligible for benefits under this programme.
- There is no income ceiling while setting up the project.
- Assistance is provided under the scheme only to the new units, units that have availed government subsidies under either the state or the central government schemes; existing units are not eligible for subsidy under PMEGP.
- In order to achieve inclusive growth across the country, a minimum of 75 projects will be awarded to each district.
- Physically disabled, OBC, SC/STs, women, northeastern region (NER) applicants in rural areas are eligible for a higher rate of subsidy.
Latest context related to PMEGP
The approval of projects under the Prime Minister’s Employment Generation Program (PMEGP) increased 44% during the first five months (April – August) of the financial year 2020-21.
- Khadi and Village Industries Commission (KVIC)Â has approved and forwarded 1.03 lakh project applications to the banks as compared to 71,556 projects during the corresponding period in 2019.
- The higher number of projects approved signifies the government’s resolve to create self-employment and sustainable livelihood for the people by promoting local manufacturing.
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Objectives of PMEGP
- Generation of sustainable and continuous employment opportunities in both rural as well as urban areas in the country.
- Provision of sustainable and continuous employment to a wide segment of prospective and traditional artisans, unemployed youth in rural and urban areas by establishing micro-enterprises for employment generation.
- Smooth flow of credit to the micro sector by facilitating the participation of financial institutions.
The Cabinet Committee on Economic Affairs (CCEA) has given approval for the continuation of PMEGP for 3 years beyond the 12th Plan from FY 2017-18 to 2019-20.
Features of the PMEGP Scheme
- Any industry including coir based projects (excluding those mentioned in the negative list) can take advantage of this scheme
- The per capita investment under the scheme should not exceed Rs 1 lakh in plain areas and Rs 1.5 lakh in hilly areas.Assistance under the PMEGP is only available to new units that are to be established
- There is no income ceiling for setting up projects
- Existing units or units that are already availing any government subsidy (State or Central) are ineligible
- Any industry including coir based projects (excluding those mentioned in the negative list) can take advantage of this scheme
PMEGP – Associated Challenges
- The Scheme is crippled by structural issues and a high rate of Non-Performing Assets (NPAs). From 2015-2016 to 2019-2020, assistance of Rs. 10,169 crore was provided. Out of this, Rs. 1,537 crore has turned out to be NPA.
- A deficiency in skills, lack of market study, low demand and stiff competition are believed to be the key reasons for such a large number of NPAs.
- While normally all central schemes are given definite annual targets, this scheme is not driven by any such target. As both the states and the banks work without the aim of completing the annual target of disbursement of loans, the programme may lose its drive. Know in detail about various Government Schemes on the given link.
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Prime Minister’s Employment Generation Programme (PMEGP):- Download PDF Here
UPSC Questions on Prime Minister Employment Generation Programme
What is the Prime Minister Employment Generation?
- Prime Minister’s Employment Generation Programme (PMEGP) is a major credit-linked subsidy scheme launched by merging two schemes namely:
- Prime Minister’s Rojgar Yojana (PMRY) and
- Rural Employment Generation Programme (REGP)Â
- PMEGP will be generating employment opportunities by establishing micro-enterprises in urban and rural areas in the non-farm sector.
What is KVIC KVIB and DIC?
The following are the implementing agencies of the PMEGP Scheme:
- Khadi and Village Industries Commission (KVIC),
- State Khadi and Village Industries Boards (KVIBs),
- District Industries Centres (DICs), etc.Â
Way Forward
- Besides providing financial support, the government needs to conduct an intensive training programme to help potential entrepreneurs focus on the right market and right products.
- The scheme can prove beneficial at the time when the economy needs to recover from the effects of the Covid-19 pandemic. Timely disbursal of funds is crucial for execution of projects and creating employment in the country.
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