PMEGP Subsidy Calculator (India): Margin Money and Loan

About the PMEGP Subsidy Calculator (India): Margin Money and Loan

The Prime Minister’s Employment Generation Programme (PMEGP) helps first-time entrepreneurs set up a micro enterprise with a bank loan and a margin-money subsidy of 15% to 35% of the project cost, paid by the Government through the bank. KVIC runs it nationally, with State KVIC offices, Khadi and Village Industries Boards, District Industries Centres and the Coir Board taking applications.

Enter the project — a new unit or a second loan to upgrade one, the sector, rural or urban location, your category — and its cost: work-shed, machinery, furniture, other fixed assets and working capital. The calculator applies the scheme’s guidelines to give the subsidy, your own contribution, the bank loan, what you repay once the subsidy is adjusted, and an indicative EMI, then checks the project as the agency and the bank will: the project-cost limit, the working-capital share, the investment per job, class VIII, EDP training, the score card and collateral.

The free preview shows the subsidy and every check on your own figures; the rest of the working, the PDF and Copy summary need a Pro pass. Nothing you enter leaves your device.

Common uses

• Finding out how much subsidy a planned unit gets before you prepare the project report.
• Checking that working capital, investment per job and the project cost stay within the scheme’s limits.
• Working out the own contribution to arrange and the loan to repay.
• Planning a second loan to modernise a unit set up under PMEGP or MUDRA.

Subsidy and own contribution

For a new unit the guidelines set (para 3.2):

• General category: own contribution 10% of the project cost; subsidy 15% in urban areas, 25% in rural areas.
• Special category — SC, ST, OBC, minorities, women, ex-servicemen, transgender persons, persons with disabilities, NER, aspirational districts, hill and border areas: own contribution 5%; subsidy 25% urban, 35% rural.
• The bank lends the rest: 90% of the project cost for the general category, 95% for special categories.

For the second loan to upgrade a PMEGP, REGP or MUDRA unit: own contribution 10% and subsidy 15% (20% in the North-East and hill States) for every category, on up to ₹1 crore in manufacturing (at most ₹15 lakh of subsidy, ₹20 lakh in the North-East and hill States) and ₹25 lakh in services (₹3.75 lakh, or ₹5 lakh).

What counts in the project cost

• Limits: ₹50 lakh in manufacturing and ₹20 lakh in business and service for a new unit. Above them a bank may lend the rest, but without subsidy.
• Capital expenditure is a must: projects without it are not eligible.
• Land never counts. A ready-built, long-leased or rented work-shed can be included for at most three years.
• Working capital may be at most 40% of the project cost in manufacturing and 60% in service and trading.
• Investment per job: work-shed, machinery and furniture divided by the full-time jobs created may be at most ₹3 lakh in the plains and ₹4.5 lakh in hilly areas, the Andaman and Nicobar Islands and Lakshadweep.
• Trading is allowed only in the North-East, districts affected by left-wing extremism and the Andaman and Nicobar Islands, for outlets selling Khadi, village industry and PMEGP products, or for retail backed by the unit’s own manufacturing or service.

Who can apply

Any individual above 18, with no income ceiling; a class VIII pass for projects above ₹10 lakh in manufacturing and ₹5 lakh in business and service; one person per family; only new projects — existing units and units that already had a Government subsidy are not eligible. The unit registers on Udyam before its physical verification. The negative list rules out, among others, processing, canning or serving slaughtered meat (non-vegetarian food in hotels and dhabas is allowed), intoxicants such as beedi, pan and tobacco, hotels or dhabas serving liquor, toddy tapping, thin polythene bags, and crop cultivation and plantations — though value addition, dairy, poultry, aquaculture, bee-keeping and sericulture are allowed.

From application to subsidy

1. Apply online on the PMEGP portal with Aadhaar, the project report and the category, education and rural-area certificates; the agency calls you within five working days.
2. The agency forwards the application to your chosen bank if it scores at least 50 of 100 (projects up to ₹10 lakh) or 60 (above).
3. The bank appraises the project and sanctions the loan; no collateral is asked for loans up to ₹10 lakh forwarded by the agencies.
4. Complete the EDP training — none up to ₹2 lakh, at least 5 days up to ₹5 lakh, 10 days above — and deposit your own contribution within 30 working days.
5. The bank releases the loan and claims the margin money, which is kept as a three-year deposit in your name — no interest is paid on it, and none is charged on the matching part of the loan — and is adjusted against the loan after a positive physical verification.

When the scheme moves to a new period, the portal pauses fresh applications until its revised guidelines are approved; check the portal before you apply, as rates can change.

Sources

The PMEGP guidelines on the scheme’s portal (paras 3.2, 4, 8, 9, 10, 11 and 13 and the negative list), the same guidelines published by KVIC, the PMEGP portal and Udyam Registration.

Limitations

• An estimate from the published guidelines, not financial advice: the implementing agency and the bank appraise the project, and the bank decides the loan, its interest and its terms.
• The rates and limits are those of the guidelines currently published; a new scheme period can revise them, so check the portal before you apply.
• The EMI is indicative: it uses the rate and years you enter, on the loan left after the subsidy, without a moratorium.

Privacy

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