PMEGP Subsidy Calculator — Prime Minister's Employment Generation Programme
Source: kviconline.gov.in · msme.gov.in · Last verified: April 2026
What is PMEGP?
PMEGP subsidy eligibility is open to any Indian citizen above 18 years who wants to start a new manufacturing or service business. The Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme launched by the Government of India in August 2008. It is administered by the Ministry of MSME and implemented nationally by the Khadi and Village Industries Commission (KVIC). The scheme aims to generate employment by helping unemployed youth and traditional artisans set up new micro-enterprises in manufacturing and service sectors across rural and urban India. PMEGP provides a government subsidy of 15% to 35% on your project cost — you contribute only 5% to 10%, and the bank finances the rest. Understanding your PMEGP subsidy eligibility is the first step to accessing these funds.
How the PMEGP Subsidy Works ?
Ex-Servicemen/
NER/Hill areas
PMEGP Subsidy Eligibility — Who Can Apply?
Project Cost Limits
How to Apply for PMEGP ?
Key Facts
2021–2026
special category
manufacturing
2021–2026
Documents Required for PMEGP
Frequently asked questions — PMEGP
Everything you need to know about PMEGP eligibility, subsidy, documents, and the application process.
What is PMEGP?
PMEGP stands for Prime Minister’s Employment Generation Programme, a credit-linked subsidy scheme launched by the Government of India in August 2008. It is administered by the Ministry of MSME and implemented by KVIC (Khadi and Village Industries Commission), KVIB, and District Industries Centres (DICs). The scheme helps unemployed youth and artisans set up new micro-enterprises by providing a government subsidy of 15% to 35% on project cost — you contribute only 5% to 10% and the bank finances the rest.
What is the subsidy amount under PMEGP?
The subsidy depends on your category and project location:
Special category includes SC/ST/OBC, Women, Ex-Servicemen, differently abled, and applicants from North-East / Hill areas. Rural projects always receive 10% higher subsidy than urban.
What is the maximum project cost allowed?
- Manufacturing sector: Up to ₹50 lakh
- Service / business sector: Up to ₹20 lakh
The cost of land cannot be included in the project cost. Only capital expenditure (machinery, equipment, infrastructure) and working capital are counted.
What is the difference between PMEGP and Mudra Loan?
- PMEGP provides a non-repayable government subsidy (15–35%) on your project cost. It is only for new businesses and has a higher documentation requirement including a detailed project report (DPR) and mandatory EDP training.
- Mudra Loan is a collateral-free loan with no subsidy. It is available for both new and existing businesses, is easier to apply for, and has no training requirement.
If you are starting a new unit and want a subsidy, PMEGP is the right choice. If you need quick working capital, Mudra Loan may be better.
Who is eligible for PMEGP?
- Any Indian citizen above 18 years of age
- No income ceiling — anyone can apply regardless of income
- Minimum 8th standard pass for manufacturing projects above ₹10 lakh or service projects above ₹5 lakh
- Self Help Groups (SHGs), Charitable Trusts, and Co-operative Societies registered under specific Acts
- Applicants from SC/ST/OBC, women, ex-servicemen, differently abled, or North-East / Hill regions get a higher subsidy
Can an existing business apply for PMEGP?
No. PMEGP is strictly for new business units only. Existing businesses, units that have already availed subsidy under PMRY, REGP, or any other central or state government scheme are not eligible.
Which businesses are NOT eligible under PMEGP?
The following are on PMEGP’s negative list and are not eligible:
- Meat processing / slaughterhouses
- Tobacco, pan masala, gutka, cigarettes, alcohol, liquor
- Polythene carry bags below 20 microns
- Pure trading activities (except Khadi / village industry products)
- Businesses using only farm income
- Projects without any capital expenditure (term loan component is mandatory)
Can I apply for PMEGP if I am already employed?
Yes. There is no restriction on employment status. Employed individuals, homemakers, students above 18, and self-employed persons can all apply for PMEGP as long as they meet the other eligibility criteria and are setting up a new business unit.
Is the PMEGP subsidy a grant or a loan? Do I have to repay it?
The PMEGP subsidy is a non-repayable government grant — you do not have to pay it back. However, the subsidy is kept in a Term Deposit Receipt (TDR) for a lock-in period of 3 years from the date of loan disbursement. After 3 years of regular repayment, it is adjusted against your outstanding loan balance. If you default or close the unit before 3 years, the subsidy is recovered.
What interest rate does the bank charge on the PMEGP loan?
Banks charge interest at their normal lending rates on the bank loan component. Typically this ranges from 10% to 12% per annum for public sector banks. The subsidy portion earns interest at the bank’s TDR rate while locked in for 3 years, which partially offsets the loan interest. Always confirm the rate with your chosen bank before applying.
Can I get a second PMEGP loan (Re-PMEGP)?
Yes. The Government of India introduced a second loan facility under PMEGP (also called Re-PMEGP or PMEGP second loan) for existing beneficiaries who have successfully repaid their first PMEGP loan and want to upgrade or expand. The project cost limit for the second loan is up to ₹1 crore (manufacturing) and ₹25 lakh (service), with a subsidy of 15% to 20% depending on category. Apply at kviconline.gov.in/pmegp.
Can land cost be included in the PMEGP project cost?
No. The cost of land is explicitly excluded from the project cost calculation under PMEGP. Only capital expenditure (machinery, equipment, civil construction) and a working capital component are eligible. If you include land cost, your project report will be rejected.
How do I apply for PMEGP?
All PMEGP applications must be submitted online only at kviconline.gov.in/pmegp. Manual or offline applications are not accepted. Steps: (1) register on the portal, (2) fill in your project details and upload documents, (3) your application is reviewed by KVIC/DIC, (4) you may be called for an interview, (5) bank sanctions the loan, (6) subsidy is released after EDP training. The process is completely free — do not pay any agent or middleman.
What is EDP training and is it mandatory?
Yes, EDP (Entrepreneurship Development Programme) training is mandatory for all PMEGP beneficiaries. It is a minimum 2-week residential or non-residential training programme arranged by KVIC, KVIB, or accredited training centres. The training is completely free of cost. The subsidy is not released until you complete EDP training. It covers business planning, financial management, and legal compliance.
What documents are required for a PMEGP application?
- Identity proof: Aadhaar, PAN, Voter ID or Passport
- Address proof: Aadhaar, utility bill or rent agreement
- Education certificate (8th pass for higher-value projects)
- Detailed Project Report (DPR) with activity, cost, and location
- Bank passbook / account details
- Passport-size photographs
- Caste certificate (SC/ST/OBC/Minority if applicable)
- Ex-servicemen discharge certificate (if applicable)
- Aadhaar-linked mobile number for OTP on portal
Requirements may vary by implementing agency and bank — always confirm before applying.
How long does PMEGP approval take?
The timeline from application to subsidy release typically takes 3 to 6 months, depending on the completeness of your project report, bank processing speed, and EDP training schedule. The online application review by KVIC/DIC usually takes 4–8 weeks. Bank sanction takes another 4–8 weeks. EDP training must then be completed before the subsidy TDR is released.
Disclaimer: This page provides general guidance on PMEGP subsidy eligibility for informational purposes only. Subsidy approval is subject to KVIC/DIC assessment and bank sanction. Always verify current scheme details at kviconline.gov.in before applying.
Source: kviconline.gov.in · msme.gov.in · Ministry of MSME, Government of India