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Job creation, loan disbursement at all-time high under PMEGP; experts point to enhanced allocation

The scheme primarily focuses on generating self-employment opportunities through micro-enterprise establishments in the non-farm sector thereby helping the unemployed youth.

July 23, 2021 / 08:03 PM IST
Representative image

Representative image

The number of people who received loans to set up micro units and the subsequent employment generation under Prime Minister Employment Generation Programme (PMEGP) is at an all-time high during 2020-21 despite the COVID-19 pandemic, as per data shared by Minister of Micro, Small and Medium Enterprises Narayan Rane, in response to a question in the Lok Sabha.

According to the data, the banks have disbursed loans to  84,793 people, thereby generating employment for 6,78,344 persons against the target of assisting 78,625 people to set up micro-units and to generate estimated employment for 6,29,000.

"This is the best performance under PMEGP since its inception in 2008-09 despite COVID-19 challenges, " the minister said in Parliament.

Vinod Kumar, President of India SME Forum, said the scheme has received a boost in the last few years. "Earlier, under the scheme, the funds were not actually accessible to the people who had ideas; However, in the last 6-7 years, the scheme has received a lot of momentum and in fact, the budget allocation for it has been increased over the years. As a result, more than 70,000 units are getting started. It only reflects how much potential for enterprise is there in rural India."

PMEGP is a credit-linked subsidy programme introduced in 2008. It is a merger of two previously existing schemes - Rural Employment Generation Programme and Prime Minister’s Rojgar Yojna.


The scheme primarily focuses on generating self-employment opportunities through micro-enterprise establishments in the non-farm sector thereby helping the unemployed youth.

Under the scheme, financial support up to Rs 25 lakh is provided for micro enterprises to be launched in the manufacturing sector and up to Rs 10 lakh for businesses in the service sector.

It is administered by the MSME Ministry and implemented by Khadi and Village Industries Commission.

In the ongoing fiscal (FY22) an estimated 1.42 lakh people have been employed through 15, 564 micro units.

Earlier this year in March, KVIC had conducted a study on the impact of the COVID-19 pandemic on PMEGP benefited MSMEs, a whopping 88 percent of the micro beneficiaries had said that they were negatively impacted and 57 percent of beneficiaries had said their units were shut down temporarily during the COVID period.

Up to 30 percent reported a drop in production and revenue during the same period.
Shreeja Singh
first published: Jul 23, 2021 07:41 pm

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