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Skill Development Programme through MSME
MSME through KVIC offers various Skill Development programmes which are aimed to
improve employment opportunity of persons from rural regions. In 2013-14, KVIC has
successfully imparted training to 91,500 persons across the country, of which 53,214 were
women.
Prime Minister’s Employment Generation Programme (PMEGP)
Prime Minister’s Employment Generation Programme is a credit linked subsidy programme
implemented by Khadi and Village Industries Commission (KVIC) at the national level. It
was introduced on 31st
March 2008, by merging two schemes namely Prime Minister’s
Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP), for
generation of employment opportunities through establishment of micro enterprises in both
rural and urban areas. This scheme is implemented by state KVIC, Khadi and Village
Industries Board (KVIB) and District Industries Centre (DICs).
The Objectives of PMEGP
1. Generation of employment opportunities in rural and urban areas by setting up new
ventures or micro enterprises.
2. To bring together widely dispersed traditional artisans, rural and urban unemployed
youths.
3. To provide continuous and sustainable employment to a large segment of traditional and
prospective artisans to prevent migration of rural artisan to urban areas.
Performance of PMEGP
Labour Minister Bandaru Dattatreya informed the Lok Sabha in August 2015 that 40,915 jobs
have created under the PMEGP in the current Fiscal year from 1 April 2015 to 16 July 2015.
In the last fiscal year of 2014-15, PMEGP had resulted in 3.57 lakh employment generation.
Under PMEGP, general category beneficiaries can avail of margin money subsidy of 25
percent of the project cost in rural areas and 15 percent in urban areas. For beneficiaries
belonging to special categories such as scheduled castes, scheduled tribes, OBCs, minorities,
women, ex-servicemen, physically handicapped, beneficiaries belonging to north Eastern
Region, Hill and Border areas, etc. the margin money subsidy is 35 percent in rural areas and
25 percent in urban areas. Under the scheme, the maximum cost of the project is Rs 25 lakh
in manufacturing sector and Rs 10 lakh in the service sector. The performance of PMEGP
largely depends on the state KVIC that function as nodal agencies to approve the application
made under this scheme. Moreover, the performance of the PMEGP also depends on the

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Public Sector Banks that has to extend the credit. During 2014-15 (till December 2014) 3,
37,070 applications have been received under the scheme of which 1,39,410 projects were
recommended to banks. Banks have however sanctioned 32,924 cases and made
disbursement only in 18,141 cases the year. Thus it is evident that there is large gap in the
applications made and those sanctioned under PMEGP. As per the name – Prime Minister’s
Employment Generation Programme suggests, it is intended to provide employment.
However fewer applications being approved and disbursements made in far less instances
will have a direct impact on the employment. There is an urgent need to study the reasons for
large scale rejections, which happens to be 41.35 percent of the applications received and
tardy disbursement of funds by the banks under the scheme which happens to be 55 percent
of the sanctioned applications for the corresponding periods. If it is lack of funds that has
been dictating the fate of the applications then appropriate provisions need to be made for
allocating more funds. On the other hand, if applications are being rejected for other reasons,
then the same need to be studied and addressed so that there are more beneficiaries of this
flagship scheme.
Road Ahead
Though no break-up of urban and rural areas under this scheme is available for this fiscal, the
overall release of funds indicates a marked departure from the past. This fiscal till July 16, the
government has released Rs 1019 crore as margin money subsidy, whereas in the entire
previous fiscal year the margin money subsidy amounted to Rs 1093.06 crore.