Starting your own business is a dream for many people in India, but lack of funds often becomes the biggest obstacle. To solve this problem, the Government of India launched the Prime Minister’s Employment Generation Programme (PMEGP) — a subsidy-based loan scheme that helps individuals start micro-enterprises in manufacturing and service sectors.
This detailed blog will explain everything you need to know about applying for PMEGP in 2026, including eligibility, benefits, documents, subsidy amount, and step-by-step application process.
What is PMEGP?
Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy scheme launched by the Government of India and implemented by:
Khadi and Village Industries Commission (KVIC) – National level nodal agency
State KVIC offices
District Industries Centres (DIC)
Khadi and Village Industries Boards (KVIB)
The main objective is to generate self-employment opportunities through the establishment of micro-enterprises in rural and urban areas.
PMEGP Subsidy Benefits (2026):
The subsidy depends on the applicant category and location.
Subsidy Structure
Category
Urban Area Subsidy
Rural Area Subsidy
General Category
15%
25%
SC / ST / OBC / Women / Minorities / Ex-servicemen / Divyang
25%
35%
Maximum Project Cost
Manufacturing Sector → Up to ₹50 lakh
Service Sector → Up to ₹20 lakh
The remaining amount is provided as a bank loan after your contribution.
Who Can Apply for PMEGP?
You are eligible if:
Age is 18 years or above
Minimum 8th pass (for projects above ₹10 lakh manufacturing or ₹5 lakh service)
Individual entrepreneur
Self Help Groups (SHGs)
Trusts
Registered institutions
Cooperative societies
Not Eligible:
Existing business owners already receiving government subsidy
Large companies or partnership firms (except SHGs)
Applicant Contribution
You must invest a small portion from your own pocket.
General Category → 10% of project cost
Special Category → 5% of project cost
Example:
If your project cost is ₹10 lakh (special category rural), you pay ₹50,000 and the government gives subsidy + bank loan covers the rest.
Documents Required for PMEGP Application
Prepare these documents before applying:
Aadhaar Card
PAN Card
Passport size photo
Educational qualification certificate
Project report / business plan
Caste certificate (if applicable)
Special category certificate (if applicable)
Rural area certificate (if applicable)
Bank passbook copy
Address proof
Experience certificate (if any)
Step-by-Step Process to Apply PMEGP Online (2026)
Follow these steps carefully:
Step 1: Visit Official Portal
Go to the PMEGP e-portal managed by KVIC.
Step 2: Select Application Type
Choose:
Individual Applicant
OR
Non-Individual Applicant
Step 3: Fill Application Form
Enter:
Personal details
Project details
Location
Investment amount
Bank preference
Step 4: Upload Documents
Upload scanned documents and submit the form.
Step 5: Application ID Generation
After submission, you will receive an Application ID for tracking.
Step 6: Interview & Verification
Your application goes to District Task Force Committee (DTFC) for interview and approval.
Step 7: Bank Loan Processing
After approval, your file is forwarded to the bank for loan sanction.
Step 8: EDP Training
You must complete Entrepreneurship Development Programme training (usually 5–10 days).
Step 9: Loan Disbursement & Subsidy Release
Bank releases the loan, and subsidy is deposited in your loan account.
Real-Life Example
Ramesh from Assam wanted to start a small furniture manufacturing unit costing ₹15 lakh.
Own contribution: ₹75,000 (5%)
Bank loan: ₹9.75 lakh
Government subsidy: ₹5.25 lakh (35% rural special category)
Within 8 months, his business became profitable and he employed 6 local workers.
How Long Does PMEGP Approval Take?
Typical timeline:
Application review → 15–30 days
Interview & approval → 1–2 months
Bank loan processing → 1–2 months
Total time: Around 2–4 months.
Types of Businesses Allowed Under PMEGP
Manufacturing Examples:
Food processing
Agarbatti making
Furniture unit
Garment manufacturing
Paper products
Service Examples:
Mobile repair shop
Beauty parlour
Computer center
Repair workshops
Restaurants
Note: Some activities like alcohol production, tobacco products, and environmentally harmful industries are not allowed.
Tips to Get PMEGP Loan Easily Approved
Prepare a strong project report
Choose a business with market demand
Maintain good CIBIL score
Select realistic investment cost
Follow up regularly with bank and DIC office
Frequently Asked Questions (FAQ)
- Is PMEGP loan interest free?
No. It is a normal bank loan with interest, but you get a government subsidy. - Can I apply PMEGP without collateral?
Yes, loans up to ₹10 lakh are usually collateral-free under CGTMSE guidelines (bank dependent). - Can salaried persons apply?
Yes, if they plan to start a new business. - Can I apply again if rejected?
Yes, you can reapply with corrections. - Is PMEGP available in 2026?
Yes, the scheme is ongoing and expected to continue as a major self-employment scheme.
Final Words
PMEGP is one of the best government schemes in India for starting your own business with low investment and high subsidy support. If you have a strong business idea and dedication, this scheme can help you become self-employed and financially independent.