PMEGP: New micro units set up in FY22 jump 38% from previous year; Rs 3,000 crore subsidy disbursed

Ease of Doing for MSMEs: PMEGP is implemented by the Khadi & Village Industries Commission (KVIC) to offer financial assistance for setting up new manufacturing units and service units.

PMEGP: New micro units set up in FY22 jump 38% from previous year; Rs 3,000 crore subsidy disbursed
The margin money sanctioned during FY22 was Rs 3,196 crore vis-a-vis Rs 2,729 crore in FY21 and Rs 1,883 crore in FY20, data showed. (Image: pexels)

Ease of Doing for MSMEs: The central government scheme — Prime Minister’s Employment Generation Programme (PMEGP) — to promote entrepreneurship and generate employment through financial assistance to individuals has enabled 1,03,219 new micro enterprises in FY22, up 38 per cent from FY21, with a margin money subsidy of Rs 2,977 crore disbursed during the year. The number of new micro units set up in FY21 with the support of PMEGP was 74,415 with Rs 2,188 crore in subsidy. In comparison, 66,653 new micro enterprises were set up with Rs 1,950 crore subsidy pre-Covid in FY20.

Sharing data in the Lok Sabha in a written reply to the question of the scheme’s performance, Minister of State for MSMEs Bhanu Pratap Singh Verma noted that 18,000 new micro units were set up with Rs 550.08 crore subsidy as of July 13, 2022. 

The margin money sanctioned during FY22 was Rs 3,196 crore vis-a-vis Rs 2,729 crore in FY21 and Rs 1,883 crore in FY20, data showed. PMEGP is implemented by the Khadi & Village Industries Commission (KVIC) to offer financial assistance for setting up new manufacturing units and service units. The scheme allows any individual, above 18 years of age and at least VIII grade pass, to apply for assistance.  

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The growth in new units set up gained significance as 88 per cent of micro units under the scheme being ‘negatively affected’ due to the pandemic, a study done by KVIC earlier last year had noted. 

The scheme has now been extended over the 15th Finance Commission Cycle from 2021-22 to 2025-26 with an outlay of Rs 13,554.42 crore. In addition, multiple modifications have also been made to the scheme including increasing the maximum financial assistance offered from existing Rs 25 lakh to Rs 50 lakh to entrepreneurs for setting up new manufacturing units and from existing Rs 10 lakh to Rs 20 lakh for new service units. 

Announcing the extension in May this year, the government had said the move will create sustainable estimated employment opportunities for about 40 lakh people in five financial years. The number of jobs generated under the scheme had hit a record high of 8,25,752 in FY22, the Ministry had said in April this year.

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