PMEGP tilts toward small-ticket projects, backs bulk of sub-₹10 lakh units in manufacturing and services

 New Delhi: The Prime Minister’s Employment Generation Programme (PMEGP) has increasingly focused on smaller projects, with about 63% of assisted manufacturing units and 93% of service-sector units over the last five years falling in the sub-₹10 lakh project-cost bracket, the government said on Monday.

Between FY2020–21 and FY2024–25, the central sector scheme channelled support to prospective entrepreneurs setting up micro-enterprises, largely through small loans and capital subsidies. The Ministry of Micro, Small and Medium Enterprises (MSME) said it has prioritised applications with project costs below ₹10 lakh to widen access and accelerate job creation at the grassroots.To ease financing constraints, banks have been directed not to insist on collateral for loans up to ₹10 lakh in line with RBI guidelines, a provision the ministry has reiterated to major lenders. The eligibility bar has also been kept low: no educational qualification is required for manufacturing projects up to ₹10 lakh and for services projects up to ₹5 lakh, officials said.The MSME ministry is also leaning on its CHAMPIONS portal—short for Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength—to speed up grievance redressal, provide handholding across schemes including PMEGP, and connect entrepreneurs with state governments, lenders and central agencies.On pricing of credit, the RBI has deregulated interest rates on bank advances, leaving PMEGP loan rates to individual banks’ underwriting policies within the regulatory framework. The central bank, however, has asked regulated entities to ensure transparency and fairness in disclosures and to accord priority to PMEGP proposals, to prevent arbitrary interest recovery and improve sanction timelines.The update was shared in Parliament by MSME minister Shobha Karandlaje, as the government looks to use small, quick-turn projects to broaden entrepreneurship and employment creation across districts.