The Prime Minister’s Employment Generation Programme (PMEGP) has proven to be a key driver in creating rural jobs over the past sixteen years, highlighting its vital role in supporting livelihoods in rural India. The programme has shown remarkable success, with rural micro enterprises outpacing their urban counterparts in job creation per unit, underscoring its importance in generating sustainable employment opportunities.
Overview of PMEGP
Launched in 2008, PMEGP is designed to promote self-employment and entrepreneurship in both rural and urban regions. Focused on micro enterprises in the non-farm sector, it aims to empower individuals and provide them with the necessary support to establish their own businesses. The Ministry of Micro, Small and Medium Enterprises (MSME) and the Khadi and Village Industries Commission (KVIC) oversee the programme’s implementation.
Job Creation Statistics
From 2008-09 to 2023-24, PMEGP has created 80.52 lakh jobs, with 64.55 lakh jobs in rural areas and 15.97 lakh jobs in urban regions. Rural enterprises have been particularly impactful, creating 8.19 jobs per unit, slightly surpassing the 8.07 jobs per unit from urban enterprises.
Impact of Covid-19
The Covid-19 pandemic reshaped employment patterns, with rural areas seeing the highest job creation in 2021-22—a total of 6.77 lakh jobs—due to increased migration from urban areas. However, urban job creation rebounded in 2023-24, with 1.61 lakh jobs, reflecting the recovery phase.
Funding and Subsidy Structure
PMEGP provides subsidies to beneficiaries based on category and location. For general category individuals, the subsidy is 25% in rural areas and 15% in urban areas, while special category beneficiaries can receive up to 35% in rural areas and 25% in urban areas. The maximum project costs are ₹50 lakh for manufacturing and ₹20 lakh for services.
Support for Existing Enterprises
Since 2018-19, successful PMEGP and MUDRA enterprises have been eligible for a second loan to support business expansion. The maximum project cost for the second loan is ₹1 crore for manufacturing and ₹25 lakh for services. The subsidy for this second loan is 15%, increasing to 20% for projects in the North Eastern Region (NER) and hilly areas.
Financial Outlay and Demand-Based Allocation
PMEGP operates as a Central sector scheme, with funding allocated based on demand and loan sanctions by financial institutions. An outlay of ₹13,554.42 crore has been approved for the period 2021-22 to 2025-26.
Key Objectives of PMEGP
PMEGP’s primary goal is to foster self-employment opportunities, integrate traditional artisans with unemployed youth, and encourage entrepreneurship across both rural and urban sectors. This programme has been crucial for enhancing economic stability and growth across India.
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