🌱 Udyam Desk
PMEGP Scheme 2026: Complete Guide to 15–35% Subsidy on Projects up to ₹50 Lakh (Apply Online)
Under PMEGP, a 15–35% margin money subsidy on projects up to ₹50 lakh (manufacturing) and ₹20 lakh (service). Eligibility, subsidy calculation, online application, project report and EDP training — a complete guide.
PMEGP (Prime Minister’s Employment Generation Programme) is the largest central scheme for setting up new micro-enterprises — a 15–35% subsidy on projects up to ₹50 lakh. Where a MUDRA loan is only a loan, under PMEGP the government itself subsidises a substantial part of your project.
The subsidy calculation at a glance
| Region | General category | Special category (SC/ST/OBC/women/area-based) |
|---|---|---|
| Rural | 25% | 35% |
| Urban | 15% | 25% |
Example: a ₹20 lakh manufacturing unit in a rural area with a woman entrepreneur → subsidy 35% = ₹7 lakh. The remaining ₹13 lakh: own contribution of 5% (special category) + bank loan.
Project limits: up to ₹50 lakh for manufacturing and ₹20 lakh for services. There are also annual income limits — check the current limits on the portal before applying.
Eligibility
- Age 18+; new unit only (not an existing one, not an expansion)
- Education: at least Class VIII pass for service projects, Class VII for manufacturing; ITI/polytechnic/degree for projects above ₹10 lakh
- Should not have taken a subsidy earlier under PMEGP/PMRY/REGP — one person is eligible only once
- Self-help groups (SHGs) and production co-operatives can also apply
Online application — step by step
- Complete Udyam registration (free) — the number is required
- Register on jansamarth.in (the government’s national loan portal) → choose the PMEGP scheme and apply with Aadhaar/Udyam number; if you have trouble online, visit the district DIC/KVIC office
- Submit the form with unit details, project cost, number of workers and bank preference — you will get an application ID
- The District Task Force (DIC/KVIC) verifies the project and forwards it to the bank
- After approval, complete EDP training (5–10 days)
- The bank disburses the loan → the subsidy is credited to the bank account → adjusted against the loan (so the effective loan shrinks by the subsidy portion)
What the project report should contain
Business description, market demand, list and prices of machinery/materials, premises arrangement, power and water, number of workers, total cost split (own + bank), income-expenditure projections and a repayment calculation. The DIC office or an approved agency helps prepare the project report.
Common mistakes that sink applications
- Project cost estimates that do not match reality
- Hiding a history of earlier subsidies (it gets verified)
- Disbursement blocked because EDP training was not completed
- Paperwork mismatch with the bank
Read more: Udyam registration, MUDRA loan and Udyam portal.
🪜 Step-by-step guide
- Online application
Register on jansamarth.in (the government's national loan portal) with your Udyam number and submit project details — or visit the district DIC/KVIC office.
- District Task Force interview
The DIC/KVIC/VIB District Task Force verifies the project and forwards it to the bank — calling you in if needed.
- EDP training
After approval, a 5–10 day Entrepreneurship Development Programme (EDP) is mandatory — at an approved agency.
- Bank loan and subsidy release
The bank sanctions the loan; the subsidy (margin money) is credited to the bank account and later adjusted against the loan.
❓ Frequently asked questions
How much subsidy is available under PMEGP?
A margin money subsidy of 15% to 35% of the project cost — 15% for the general category in urban areas, 25% for SC/ST/OBC/women etc. in urban areas; 25% for the general category in rural areas, 35% for special categories in rural areas.
What is the maximum project size under PMEGP?
Subsidy is available on project costs up to ₹50 lakh for manufacturing (production) units and up to ₹20 lakh for service units. Larger projects do not fall under PMEGP.
Is the PMEGP application really free?
The online application is free. EDP training may carry a fixed fee (charged by the approved agency). Beyond that, never pay anyone lured by 'guaranteed approval' — approval is granted only by the District Task Force and the bank.