The Prime Minister Employment Generation Programme Scheme Extended Till 2026 

The Government of India has announced the Prime Minister’s Employment Generation Programme (PMEGP) would be extended for a period of five years. This extension will be for the 15th Finance Commission Cycle starting from Financial Year 2021-22 and ending in Financial Year 2025-26 with a budget amount of INR 13,554.42 Cr. Further, the government also announced some changes in the existing criteria to increase the maximum financial assistance from existing INR 25 lakh to 50 lakh to entrepreneurs for setting up new manufacturing units and from existing Rs 10 lakh to Rs 20 lakh for new service units.

The PMEGP scheme has supported around 7.8 lakh micro enterprises giving them a total subsidy of INR 19,995 Cr to create employment for around 64 lakh people, the MSME Ministry said in a statement. Around 80 per cent of the units assisted under PMEGP are in rural areas and about 50 per cent units are owned by scheduled caste, scheduled tribe and women entrepreneurs. Khadi and Village Industries Commission (KVIC) is the national nodal agency for the scheme.

The scheme also modified its definition of village industry and rural area to include areas falling under Panchayati Raj institutions to be accounted under rural areas and areas under municipality to be recognised as urban areas. Moreover, all implementing agencies including state and district level state offices of KVIC, state Khadi and Village Industries Boards (KVIBs) and district industries centres have been allowed to receive and process applications in all areas irrespective of the rural or urban category.

Rajan Raje, Chairman, Micro Small and Medium Enterprises (MSME)Forum, Bombay Chamber of Commerce and Industry, said that the initiative is good but creation of only 8 lakh micro enterprises in 13 years, out of around 6 crore micro enterprises in India, by spending nearly Rs 20,000 crore is not a notable thing. In addition he said, giving employment to 64 lakhs people out of 11 crore employed in the sector is not a very attractive record for a period of 13 years. Government must focus on the micro segment with better technology and marketing support. Only financial support is not enough. Awareness about the scheme is another challenge

The government said the extension would create sustainable employment opportunities for about 40 lakh people in five years. The margin money subsidy to be given to potential entrepreneurs would be 25 percent of the project cost in urban areas and 35 per cent in rural areas for special category applicants including Schedule Castes, Schedule Tribes, Other Backward Castes, women, transgenders, physically disabled, north-eastern region, aspirational and border district applicants, according to the guidelines. For General category applicants, 15 per cent subsidy of the project cost would be provided in urban areas and 25 per cent in rural areas.

Meanwhile, according to the MSME Ministry Data, the number of jobs generated under the scheme through new enterprises set up had hit a record high of 8, 25,752 in Financial Year 2022. Also, the number of enterprises set up during the year jumped over 1 lakh to 1, 03,219 for the first time in the past 14 years. The growth in unit’s set-up and employment created under PMEGP in Financial Year 2022 was up by 39 per cent each from Financial Year 21, while the margin money distribution (subsidy) had jumped 36 per cent.