Quick answer: Under PMEGP, women are in the “special category”: you put in 5% of the project cost, the government gives a margin money subsidy of 25% (urban) or 35% (rural), and a bank lends the rest. Projects can cost up to ₹50 lakh for manufacturing and ₹20 lakh for services. As of October 2026, applications run on the new PMEGP 2.0 portal, but the scheme’s approval ran only to 31 March 2026 and further subsidy release depends on the Centre approving its continuation.
What PMEGP is, in one paragraph
The Prime Minister’s Employment Generation Programme (PMEGP) is a central scheme of the Ministry of MSME, implemented through the Khadi and Village Industries Commission (KVIC), state Khadi boards and District Industries Centres (DICs). It helps you set up a new micro enterprise outside farming, using a bank loan plus a one-time government subsidy. It does not fund existing businesses (a separate second loan exists for upgrading, covered below).
Who can apply
- Any individual above 18 years of age. There is no income ceiling.
- For projects above ₹10 lakh in manufacturing or above ₹5 lakh in business or services, you need at least a Class VIII pass.
- Only one person per family can get PMEGP assistance. “Family” means you, your spouse and unmarried children.
- The unit must be new. Existing units, and units that already got a government subsidy under another central or state scheme, are not eligible.
- Self-help groups, registered societies, production cooperatives and charitable trusts can also apply.
Women qualify for the special category on gender alone. You do not need to belong to any other special group.
What you get: the numbers
All figures as of October 2026, as a share of total project cost.
| Category | Your contribution | Subsidy (urban) | Subsidy (rural) | Bank loan |
|---|---|---|---|---|
| General | 10% | 15% | 25% | 90% |
| Special (includes all women) | 5% | 25% | 35% | 95% |
Project cost limits: up to ₹50 lakh for manufacturing and up to ₹20 lakh for business or service units. Banks can lend above these limits, but without subsidy on the extra amount.
Worked example: A woman setting up a ₹10 lakh food-processing unit in a village puts in ₹50,000. The bank sanctions ₹9.5 lakh. The subsidy of ₹3.5 lakh (35%) is credited against that loan.
How the subsidy reaches you: It is not paid to you in cash. The margin money is kept in a Term Deposit Receipt against your loan for three years. No interest is paid on it, and no interest is charged on the matching part of your loan. After three years, if a physical verification confirms the unit is running, the amount is adjusted against your loan.
What PMEGP will and will not fund
- The project must include capital expenditure (machinery, equipment). Pure working-capital projects are not eligible.
- Land cost cannot be included. Rent for a ready-built or leased shed can be counted for up to three years.
- Retail or trading outlets are allowed only in limited cases: in the North-East, LWE-affected districts and Andaman and Nicobar; outlets selling Khadi, village industry or PMEGP products; or shops backed by your own manufacturing or service facility.
- Transport businesses such as a tourist cab or van are allowed, with caps in most states.
- Activities on the scheme’s negative list, or banned by local authorities, are excluded.
EDP training: what is required
Entrepreneurship Development Programme (EDP) training must be completed before the bank releases your first loan instalment.
| Project cost | EDP requirement |
|---|---|
| Up to ₹2 lakh | Not mandatory |
| Up to ₹5 lakh | At least 5 days |
| Above ₹5 lakh | At least 10 days |
You can take EDP online or at a training centre, and pick the mode on the portal. The Ministry has also told Parliament that a free two-day online EDP and weekly Sunday webinars are available to anyone thinking of applying, which is a sensible first step before you write a project report.
Step-by-step: how to apply
- Prepare a project report. Cover machinery quotes, raw materials, monthly costs, expected sales and repayment. The portal’s Knowledge Centre has sample project profiles you can adapt.
- Register on the PMEGP 2.0 portal (pmegp.msme.gov.in). Click “New Application”, enter your Aadhaar and PAN, and choose your implementing agency (KVIC, KVIB or DIC), state, district, category (choose women/special) and qualification.
- Fill in project and bank details. Add your address, project cost break-up, preferred bank branch, and whether you want CGTMSE guarantee cover.
- Note your login details shown on screen and sent by SMS, then log in as a registered applicant.
- Complete the score card and upload documents. Each file must be under 1 MB.
- Final submit. The application goes to the implementing agency, which scrutinises it and forwards it to your chosen bank.
- Bank appraisal and sanction. The bank appraises the project and may ask for more documents.
- Complete EDP training if your project is above ₹2 lakh.
- Register on Udyam (free at udyamregistration.gov.in). It is mandatory before physical verification and subsidy adjustment.
- First instalment and setup. After three years and a successful physical verification, the margin money is adjusted.
If you are not comfortable online, offline application forms in English, Hindi and 19 other Indian languages can be submitted at the nearest implementing agency office, and CSCs can also help.
Documents to keep ready
The portal shows the exact list of mandatory uploads for your case. Keep these ready before you start:
- Aadhaar and PAN (needed to register)
- A detailed project report with cost estimates and machinery quotations
- Proof of education, if your project is above the ₹10 lakh (manufacturing) or ₹5 lakh (service) threshold
- Bank account details
- EDP training details, once completed
- Udyam registration, before physical verification
- Later, a photo of the unit’s signboard after setup
Where the scheme stands in late 2026
- Approval period: The 2021–22 to 2025–26 cycle, with an outlay of ₹13,554.42 crore, ended on 31 March 2026.
- Continuation: In a Rajya Sabha reply reported on 3 August 2026, the government said an Expenditure Finance Committee meeting had been held on continuing PMEGP for five more years, and that further margin money release was contingent on approval. We found no announcement of that approval by late October 2026.
- New portal: The Ministry launched the PMEGP 2.0 portal on 27 June 2026. It is linked with the Jan Samarth portal for online loan processing, sanction and disbursement, and replaces the old KVIC e-portal.
- Scale so far: About 12.65 lakh units have been sanctioned loans since 2008–09, with nearly ₹29,624 crore of margin money disbursed, according to the same reply.
What this means for you: You can prepare and apply, but ask the DIC or KVIC office in writing whether subsidy for new sanctions is being released before you commit savings or sign a lease.
Common reasons applications fail
- Weak project report. Vague costs or no clear market lowers your score and bank interest.
- Applying for an existing business. PMEGP is for new units only.
- No capital expenditure in the project, or land included in the cost.
- Another family member already got PMEGP.
- Credit history problems for you or a co-applicant.
- Paying agents. The portal and Udyam registration are free.
Tips for women and first-time founders
- If your unit is in a village or small town, check whether it counts as rural. The 10-point subsidy difference is large.
- Ask the bank to cover the loan under CGTMSE instead of asking for property as collateral. The portal itself asks your CGTMSE preference.
- Keep the project modest for a first attempt. A ₹5 lakh to ₹10 lakh project is easier to get sanctioned and needs shorter EDP.
- After three profitable years, a PMEGP unit can apply for a second loan for upgrading: up to ₹1 crore for manufacturing and ₹25 lakh for services, with 15% subsidy (20% in North-Eastern and hill states).
FAQ
Q: Do women always get the special category rate?
A: Yes. Women are listed in the special category, so you contribute 5% and get 25% (urban) or 35% (rural) subsidy.
Q: Can I apply for a home-based business?
A: Yes, if it involves capital expenditure such as machinery. A pure trading shop usually does not qualify outside the listed exceptions.
Q: Is there an interest subsidy too?
A: No separate interest subsidy. The bank charges its normal rate, except that no interest is charged on the part of the loan matched by the margin money.
Q: My husband took a PMEGP loan. Can I apply?
A: No. Only one person per family (self, spouse, unmarried children) can get PMEGP assistance.
Q: Can I get PM Vishwakarma and PMEGP together?
A: Not at the same time. A PM Vishwakarma beneficiary can apply for PMEGP only after repaying the Vishwakarma loan.
Q: Is the old KVIC portal still used?
A: New applications now go through pmegp.msme.gov.in, launched in June 2026.
Official links
- PMEGP 2.0 portal: https://pmegp.msme.gov.in/
- Ministry of MSME: https://msme.gov.in/
- KVIC PMEGP e-portal (older applications): https://www.kviconline.gov.in/pmegpeportal/
- Udyam Registration: https://udyamregistration.gov.in/
- Jan Samarth: https://www.jansamarth.in/
- CGTMSE: https://www.cgtmse.in/
Last checked: October 2026. Rules, limits and fees change; confirm with the official source before you apply. This guide is general information, not legal, tax or financial advice.
Sources: PMEGP 2.0 portal, scheme guidelines and eligibility (October 2026); Lok Sabha Unstarred Question 646 on PMEGP (July 2024); Kashmir Life, Rajya Sabha reply on PMEGP subsidy and continuation (August 2026); Andaman and Nicobar Industries Department, PMEGP note (October 2024); Himachal Pradesh Khadi Board, PMEGP (September 2025); Drishti IAS and Kashmir Despatch, MSME Day 2026 portal launches (June 2026); IMPRI, PMEGP 2026 analysis (October 2026); SarkariYojana, PMEGP 2.0 application steps (October 2026); Udyam Registration portal (October 2026).
