Prime Minister’s Employment Generation Programme (PMEGP)
Ministry of Micro, Small and Medium Enterprises (MoMSME) has launched a new credit linked subsidy programme called Prime Minister’s Employment Generation Programme (PMEGP) on 61st anniversary of Indian Independence by merging the two schemes that were in operation till 31.03.2008 namely Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas. PMEGP will be a central sector scheme to be administered by the Ministry of MSME.
2. The subsidy levels, the cost limit of projects or units that could be established under PMRY which was extended to rural areas as well in 1994-95, were quite low and unattractive compared to those available to the beneficiaries in REGP. While the maximum subsidy admissible was Rs.12500 and the maximum cost of project that could be established was Rs.5 lakh under PMRY, the maximum subsidy that was admissible was Rs.4 lakh and the maximum cost of project that could be established was Rs.25 lakh under REGP for a beneficiary belonging to General category. There were more attractive programmes for creation of self employment opportunities being operated by many State Governments. Recovery rates of loans under PMRY were also considerably less than those under REGP. PMEGP improves upon the subsidy levels and cost limits of projects compared to those available so far under PMRY and ensures that the attractiveness of REGP is not diluted in any way while simultaneously strengthening the selection process, implementation and monitoring mechanism.
2. The subsidy levels, the cost limit of projects or units that could be established under PMRY which was extended to rural areas as well in 1994-95, were quite low and unattractive compared to those available to the beneficiaries in REGP. While the maximum subsidy admissible was Rs.12500 and the maximum cost of project that could be established was Rs.5 lakh under PMRY, the maximum subsidy that was admissible was Rs.4 lakh and the maximum cost of project that could be established was Rs.25 lakh under REGP for a beneficiary belonging to General category. There were more attractive programmes for creation of self employment opportunities being operated by many State Governments. Recovery rates of loans under PMRY were also considerably less than those under REGP. PMEGP improves upon the subsidy levels and cost limits of projects compared to those available so far under PMRY and ensures that the attractiveness of REGP is not diluted in any way while simultaneously strengthening the selection process, implementation and monitoring mechanism.
3. The subsidy levels under PMEGP are as under:
Categories of beneficiaries under PMEGP | Owner’s contribution | Rate of Subsidy | |
(of cost of Project) | |||
Area | Urban | Rural | |
General | 10% | 15% | 25% |
Special (including SC/ STs/ OBCs/ Minorities/ Women, Ex-servicemen, Physically Handicapped, NER, Hill and Border Areas) | 05% | 25% | 35% |
4. The upper limit of the cost of project that could be setup in the manufacturing sector is Rs.25 lakh while that in the business/service sector is Rs.10 lakh. There are no ceiling limits of annual income in respect of beneficiaries while a minimum educational qualification of VIII standard pass will be required for beneficiaries in respect of projects costing more than Rs.10 lakh in manufacturing sector and more than Rs.5 lakh in business/service sector. The beneficiaries would be identified, inter alia, with the help of Panchayats, Special Awareness Camps and will be provided with a mandatory Entrepreneurship Development Programme (EDP) training of a duration of two to three weeks. The scheme envisages electronic tracking of applications, 100 per cent verification of projects/units that will be established and model project profiles have been updated in association with banks. The scheme will be implemented at the national level through Khadi and Village Industries Commission (KVIC), an organization created under an Act of Parliament reporting to MoMSME which will place the funds of Government subsidy with the participating banks which in turn will disburse the same to the beneficiaries on receipt of applications and their own contribution ‘upfront’ in accordance with the guidelines of the scheme.
5. While KVIC has been given the overall responsibility for implementing PMEGP at the national level, it will directly do so in respect of the targets for rural areas, as defined in the KVIC Act, through its State Offices and State Khadi and Village Industries Boards (KVIBs). Implementation of PMEGP in urban areas and other rural areas will be done through the State Governments {District Industries Centres (DICs)}. The newly introduced Rajiv Gandhi Udyami Mitra Yojana of MoMSME can also be tapped for providing handholding support to the beneficiaries under PMEGP.
6. Budget Estimates 2008-09 have provided Rs.823 crore for PMEGP which includes Rs.83 crore towards Backward and Forward linkages including EDP training, publicity, marketing support, e-tracking of applications, physical verification of projects and so on. An estimated 6.17 lakh additional employment opportunities are targeted to be generated in 2008-09. The estimated total outlay for subsidy under PMEGP is Rs.4485 crore in addition to Rs.250 crore earmarked for providing Backward and Forward linkages to the micro enterprises between 2008-09 to 2011-2012 leading to an estimated generation of around 37.38 lakh additional employment opportunities. The scheme will be got independently reviewed after two years of its implementation.
7. The detailed guidelines of the scheme are being prepared by KVIC and will be published and also made available on website shortly.
Regp6/desk/pmegp/cir
KHADI AND VILLAGE INDUSTRIES COMMISSION
3, IRLA ROAD, VILE PARLE (WEST), MUMBAI 56.
NO : PMEGP/Policy/M-939/08-09 Dt : 10/04/2008
C I R C U L A R
Sub : Introduction of Prime Minister Employment Generation
Programme (PMEGP) in place of Rural Employment
Generation Programme and PMRY – reg.
Further to this office Circular No. REGP/Gen/M-34/07-08 dated 31/3/2008
wherein it was instructed that REGP Scheme will cease to exist w.e.f 1/4/2008 and
no proposal are to be accepted or sanctioned under REGP w.e.f. 01-04-2008,
Ministry of MSME vide its letter No. G-21013/6/2007-KVI dated 01-04-2008 has
communicated the following guidelines for compliance :-
(i) REGP in its present form will cease to exist w.e.f. 01-04-2008.
(ii) Applications, if any, received after 31-03-2008 can be considered under the
PMEGP after its formal approval and launching around May-June, 2008.
(iii) State Offices of KVIC/KVIBs and other implementing agencies of REGP
including Banks may be advised not to accept / entertain any new project /
loan under REGP w.e.f. 01-04-2008 and pending claims may be settled
before 31-05-2008, through special efforts and close monitoring. No further
funds will be released from the Ministry under REGP w.e.f. 01-04-2008 and
only residual claims in respect of applications received upto 31-03-2008
which shall be kept at the bare minimum by KVIC, could be considered for
sanction and settlement, as a special case, by the competent authority out of
the unspent balance available with KVIC as on 31-3-2008. Broadly the
targets including subsidy are likely to be allocated on 60:40 basis between
KVIC and State DICs under PMEGP.
(iv) Identify reputed voluntary organizations or NGOs to assist in identification of
providing training to and verification of projects or units that would be set up
under the merged scheme.
(v) Consult some of the reputed banks which already have an effective system
of electronically tracking loan applications such as Educational Loans, in
place so as to have an effective interface between the system that would be
used in KVIC for PMEGP and that by the participating banks.
(vi) Initiate action for updating Project Profiles for PMEGP.
Contd..2/-
Regp6/desk/pmegp/cir
: 2 :
While action is being initiated by Directorate of REGP on the policy issues,
action may also be initiated by State / Divisional Director and CEOs of State Khadi
and V. I. Boards on the above areas.
It is also requested that operational and policy issues that may arise due to
switchover from REGP to PMEGP may be identified and forwarded to Directorate of
REGP so that relevant issue could be communicated to Ministry of MSME for
redressal.
Few issues identified by Directorate of REGP are enclosed for your perusal
and feedback.
Compliance on the above circular may be brought to the notice of all
concerned for immediate feedback.
Encl: As above.
(J.S. Mishra)
Chief Executive Officer
To,
1. C.E.O, State/UT KVIB
2. All Dy. CEOs
3. State/Divisional Directors
4. Director, REGP
Copy for favour of Information ;
1. Members of KVIC
2. Financial Advisor, KVIC, Mumbai
3. Jt.C.E.O., KVIC, Mumbai
4. Secretary to Chairperson
5. CEO Cell
6. Director ( IT) for website
7. Director ( Publicity) for publishing in Jagriti.
(J.S. Mishra)
Chief Executive Officer
Regp6/desk/pmegp/cir
ISSUES RELATING TO SWITCHOVER FROM REGP TO PMEGP
EDP Training
IT is observed that EDP training is imparted to around 70% of the beneficiaries
during each financial year and 30% is spread over to next financial year as around
30% project are sanctioned in the last month of the financial year. Since REGP
has ceased to exist w.e.f. 1-4-2008, EDP in respect of the entrepreneurs whose
project is sanctioned during the March 2008 will become backlog and financial
provision for such EDP has to be made during 2008-09 under PMEGP. It is
estimated that 30% of the total EDP sanctioned for 2007-08 i.e. Rs.319.86 lakhs
may be around Rs.96.00 lakhs and may be provided during 2008-09.
Physical Verification :
As per the scheme of REGP the physical verification of the unit are to be
conducted after 12 months of setting up of the units and before completion of 24
months. Physical Verification in respect of the unit sanctioned during 2007-08 and
also the backlog if any pertaining to 2006-07 are to be conducted during 2008-09.
This needs budget provision to the tune of Rs.55.00 lakhs during 2008-09 being
30% of total physical verification targets of 2007-08 i.e. Rs.183.40 lakhs.
Marketing Support :
Marketing support need to be provided to REGP units and this can be done under
the exhibitions and Buyer-Seller Meet being sanctioned under Directorate of
Marketing. Provision for exhibition will come in the place for PMEGP units which
are likely to come w.e.f. 2009-10.
Setting up of database :
A detailed database has to be set up at field level both for REGP and PMEGP to
meet the requirement of Parliament questions, Govt. reference, Ministry of MSME,
Parliamentary Standing Committee etc. REGP website is being set up which will
meet the requirement of setting up of database for REGP units and also facilitate
marketing efforts. The same web-site will be useful for PMEGP as and when it is
introduced.
-http://smetimes.tradeindia.com/smetimes/news/top-stories/2008/Aug/14/ccea-approves-pm-employment-generation-programme.html
 | CCEA approves PM's employment generation programme |
 |
Ministry of Micro, Small and Medium Enterprises (MSME) had proposed the introduction of a new credit linked subsidy programme called Prime Minister’s Employment Generation Programme (PMEGP) by merging the two schemes that were in operation till 31.03.2008 namely Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP) for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas.
PMEGP will be a central sector scheme. The proposal has been approved by the Cabinet Committee on Economic Affairs in New Delhi.
The subsidy levels, the cost limit of projects or units that could be established under PMRY which was extended to rural areas as well in 1994-95, were quite low and unattractive compared to those available to the beneficiaries in REGP.
While the maximum subsidy admissible was Rs.12500 and the maximum cost of project that could be established was Rs.5 lakh under PMRY, the maximum subsidy that was admissible was Rs.4 lakh and the maximum cost of project that could be established was Rs.25 lakh under REGP for a beneficiary belonging to General category.
There were more attractive programmes for creation of self employment opportunities being operated by many State Governments. Recovery rates of loans under PMRY were also considerably less than those under REGP.
PMEGP improves upon the subsidy levels and cost limits of projects compared to those available so far under PMRY and REGP, while simultaneously strengthening the selection process, implementation and monitoring mechanism. Higher levels of subsidy have been proposed for beneficiaries belonging to marginalized sections of the society like Schedule Castes, Schedule Tribes, Other Backward Classes, Minorities, Women, Physically Handicapped, etc. to ensure inclusive growth.
The upper limit of the cost of project that could be setup in the manufacturing sector is Rs.25 lakh while that in the business/service sector is Rs.10 lakh. There are no ceiling limits of annual income in respect of beneficiaries while a minimum educational qualification of VIII standard pass will be required for beneficiaries in respect of projects costing more than Rs.10 lakh in manufacturing sector and more than Rs.5 lakh in business/service sector.
The beneficiaries would be identified, inter alia, with the help of Panchayats, Special Awareness Camps and will be provided with a mandatory Entrepreneurship Development Programme (EDP) training of a duration of two to three weeks.
The scheme envisages electronic tracking of applications, 100 per cent verification of projects/units that will be established and model project profiles have been updated in association with banks.
The scheme will be implemented at the national level through Khadi and Village Industries Commission (KVIC), an organization created under an Act of Parliament reporting to MoMSME which will place the funds of Government subsidy with the participating banks which in turn will disburse the same to the beneficiaries on receipt of applications and their own contribution ‘upfront’ in accordance with the guidelines of the scheme.
While KVIC has been given the overall responsibility for implementing PMEGP at the national level, it will directly do so in respect of the targets for rural areas, as defined in the KVIC Act, through its State Offices and State Khadi and Village Industries Boards (KVIBs). Implementation of PMEGP in urban areas and other rural areas will be done through the State Governments {District Industries Centres (DICs)}in close coordination with KVIC.
The newly introduced Rajiv Gandhi Udyami Mitra Yojana of MoMSME can also be tapped for providing handholding support to the beneficiaries under PMEGP.
Budget Estimates 2008-09 have provided Rs.823 crore for PMEGP which includes Rs.83 crore towards Backward and Forward linkages including EDP training, publicity, marketing support, e-tracking of applications, physical verification of projects and so on. An estimated 6.17 lakh additional employment opportunities are targeted to be generated in 2008-09.
The estimated total outlay for subsidy under PMEGP is Rs.4485 crore in addition to Rs.250 crore earmarked for providing Backward and Forward linkages to the micro enterprises between 2008-09 to 2011-2012 leading to an estimated generation of around 37.38 lakh additional employment opportunities. The scheme will be got independently reviewed after two years of its implementation.
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