Prime Minister Employment Generation Programme Creating First Generation Micro-Enterpreneurs

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Angshuman Dey**,,

 Prime Minister Employment Generation Programme (PMEGP) has created new hopes among educated unemployed to start new enterprises. Under PMEGP, more than 1.7 lakh first generation entrepreneurs have been assisted to set up their own units with margin money subsidy provided through District Industries Centres (DIC), State Khadi and Village Industries Board (KVIB) and State offices of Khadi and Village Industries Commission (KVIC).  Seeing the popularity, massive response and the potential to generate employment in rural non-farm sector, the outlay for PMEGP is proposed to be increased from Rs 1037 crore in 2011-12 to Rs 1276.28 crore in 2012-13.

PMEGP Macro Picture (Rs crore)

Year

Released by Ministry

Projects financed

Margin Money subsidy utilized

Backward & Forward Linkages

Total Funds utilized

Employment opportunities created (No of persons)

Total

Table of Contents

MM

2008-09

823.00

740.00

25,507

408.65

49.35

458.00

2,55,070

2009-10

545.71

504.21

39,502

742.76

30.13

772.89

4,19,997

2010-11

896.31

877.20

49,819

905.41

26.16

931.57

4,82,024

2011-12

1057.06

1010.24

54,841

1,058.51

17.08

1,075.59

4,72,314

E/Total

3,322.08

3,131.65

1,69,669

3,115.33

122.72

3,238.05

16,29,405

PMEGP is a credit-linked subsidy programme merging erstwhile PMRY and REGP for generating self-employment through establishment of micro-entreprises, organize traditional artisans and un-employed youth, stop migration of workers and increase their earning capacity. It is a Central Sector Scheme. PMEGP virtually started after issue of guidelines on 25 September 2008.

PMEGP is implemented by Khadi and Village Industries Commission (KVIC) being the Nodal Agency at national level and State KVIC Directorates, State KVIBs and DICs at state level (IAs). They will involve NGOs, PRIs, SHGs, NSIC, Udyami Mitras etc in identification of beneficiaries, viable projects and training and also in implementation.

Financial Assistance

The subsidy levels that are provided under this programme are:

Categories of beneficiaries under PMEGPBeneficiary’s Contribution

(of project cost)

Rate of Subsidy

(of project cost)

Area (location of project/unit) UrbanRural
General Category10%15%25%
Special Category  (including SC / ST / OBC /Minorities/Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas etc.)05%25%35%

Eligibility

Any person of age 18 years or above is eligible. There is no ceiling of income; and minimum educational qualification of having passed VIII standard is essential only for bigger project investments (exceeding Rs 5 lakh in service/ business category and Rs 10 lakh in manufacturing category). Assistance in the form of margin money subsidy is available only for new units, SHGs, Societies, Cooperatives, Trusts. Existing units who had not availed government subsidy are also eligible. Only one beneficiary is allowed per family. The project may include capital expenditure and working capital; but cost of land cannot be included in the project cost.

 

Identification of Beneficiaries

PMEGP project proposals are invited directly by KVIC State Offices, State KVI Boards or DICs or through the banks. These are then scrutinized by a District Level Task Force (DLTF) headed by DM & Collector and applicants are short-listed and interviewed, selected and sent for two week EDP Training. Quarterly review is also done by the DLTF. Credit decision is eventually bank’s own; but they are required to answer to DLTF the grounds in case of rejection. Banks would ensure that the beneficiaries are EDP trained before they are disbursed loan. After EDP training, beneficiaries have to deposit beneficiary’s own contribution in bank. Banks claim subsidy with KVIC Br (Margin Money) after disbursal. Subsidy is deposited by banks as term deposit receipt (TDR) for 3 years in the name of borrower without interest. EDP charges are re-imbursable to the training institute by KVIC (@ Rs 2500-4000/-)

Verification

100% of the units assisted under PMEGP are physically verified by KVIC through agencies (third parties). Every State must send a quarterly progress report (QPR) through KVIC to Ministry of MSME.

Monitoring

Monitoring is done at various levels through the following:

  • Quarterly lead district managers (LDM) to educate bank officials on PMEGP.
  • Zonal level review meeting for implementing agencies and banks.
  • Top-level bankers’ meet (half-yearly in June/ December) held by CEO KVIC.

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 *Director (ARI), MSME.

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