How much own contribution is needed for PMEGP?

10% of the project cost for general-category applicants and 5% for special categories. The bank finances the balance (90% or 95%) as a term loan, with the subsidy adjusted against it after the lock-in period.

Is a project report compulsory for PMEGP?

Yes. The online application on the PMEGP e-portal requires a project report upload, and the bank appraises the loan from it — cost of project, means of finance, projected sales, profitability, repayment and DSCR.

Can an existing business apply under PMEGP?

No. PMEGP is for new units only. Existing units can apply only under the separate second-loan scheme for upgradation, which has its own limits and a 15% subsidy (20% in NER and hill states).

PMEGP project report — subsidy, eligibility, documents and a free bank-format report

Q: What is the maximum project cost under PMEGP?

Up to ₹50 lakh for a manufacturing unit and up to ₹20 lakh for a service or trading-type unit (as per current PMEGP guidelines; check kviconline.gov.in for the latest).

Q: How much subsidy does PMEGP give?

Margin money subsidy of 15% (urban) or 25% (rural) for the general category and 25% (urban) or 35% (rural) for special categories — SC/ST/OBC, minorities, women, ex-servicemen, persons with disability, transgender, and applicants from NER, hill and border areas.

PMEGP (Prime Minister's Employment Generation Programme) is the central government's credit-linked subsidy scheme for setting up a new micro enterprise. The bank sanctions a term loan; KVIC releases a margin-money subsidy of 15–35% of the project cost into the loan account. The single document that decides whether your application moves is the project report. This page explains the scheme in plain language and gives you a free tool that produces the report in the format banks appraise.

Make a free PMEGP project report (up to ₹10 lakh) → Project above ₹10 lakh — detailed DPR →

PMEGP at a glance

Item	Manufacturing unit	Service / trading-type unit
Maximum project cost	₹50 lakh	₹20 lakh
Own contribution (general category)	10% of project cost
Own contribution (special category)	5% of project cost
Margin-money subsidy — general	15% urban · 25% rural
Margin-money subsidy — special category*	25% urban · 35% rural
Bank finance	90% (general) or 95% (special) of project cost as term loan; working capital may be included
Subsidy lock-in	Kept as a term deposit for 3 years, then adjusted against the loan if the unit is running

*Special categories: SC, ST, OBC, minorities, women, ex-servicemen, persons with disability, transgender, and applicants from the North-Eastern Region, hill and border areas. Figures as per PMEGP guidelines in force; always confirm on kviconline.gov.in before applying.

Who is eligible

Any individual above 18 years; no income ceiling.
For projects above ₹10 lakh (manufacturing) or ₹5 lakh (service), at least VIII standard pass.
Self-help groups, registered societies, trusts and production co-operatives are also eligible.
New units only. Units that have already taken a subsidy under another central or state scheme are not eligible. One person (one family) — one unit.
Activities on the negative list (for example meat processing, intoxicants, tobacco, some plastic-carry-bag units, and farming itself) are excluded. Allied agri activities such as dairy, poultry, food processing and value addition are allowed.

What the bank checks in a PMEGP project report

A PMEGP file is appraised like any other term loan. From the branch manager's side, these are the points that get a report accepted or returned:

Cost of project is genuine. Machinery with quotations, realistic civil-work cost (own land/shed preferred), preliminary expenses, and working-capital margin. Inflated cost to get a bigger subsidy is the most common reason for rejection.
Means of finance adds up. Own contribution (5% or 10%) + bank term loan = project cost. The subsidy is not part of your contribution.
Sales assumptions match the local market. Capacity utilisation starting at 50–60% in year one and rising gradually looks credible; 100% from day one does not.
Profitability and DSCR. Average DSCR around 1.5 with no year below 1.25. Repayment typically 5–7 years with a 6–12 month moratorium.
Break-even comfortably below the projected sales.
Employment generation — PMEGP tracks jobs per lakh of investment; show realistic numbers.

Insider tip: prepare the report before the EDP training and bank visit, keep every figure traceable to a quotation or a market rate, and keep the same figures in the online application, the report and the bank form. Mismatches between the three are what delay sanctions for months.

Step-by-step process

Register and apply online on the PMEGP e-portal (kviconline.gov.in → PMEGP). Choose the agency: KVIC, KVIB or DIC.
Upload documents including the project report, caste/special-category certificate (if any), education proof and Aadhaar.
Application is scrutinised by the District Level Task Force Committee and forwarded to your chosen bank.
The bank appraises the project report, may call you for discussion and site visit, and sanctions the term loan (and working capital if applied).
Complete the mandatory EDP (entrepreneurship development) training — 5 to 10 days depending on project size; online option exists.
Bring your own contribution; the bank disburses; the margin-money subsidy is claimed by the bank and parked as a TDR for three years.
Start the unit, keep repayments regular, and get the physical verification done; the subsidy is adjusted after lock-in.

Documents checklist

Aadhaar, PAN, passport-size photo, address proof
Education certificate (VIII pass where applicable)
Caste / special-category certificate if claiming higher subsidy
Project report (bank format) with machinery quotations
Rural-area certificate from the Gram Panchayat, if applying as rural
Proof of premises — ownership or rent agreement / consent letter
Udyam registration (can be done after sanction), licences as applicable (FSSAI, GST, pollution NOC)
Bank account statement of the applicant

Second loan for upgradation (existing PMEGP / REGP units)

Units that have repaid the first PMEGP loan well and are making profit can apply for a second loan for expansion: project cost up to ₹1 crore (manufacturing) or ₹25 lakh (service), with 15% subsidy (20% in NER and hill states) and 10% own contribution. The expansion DPR tool handles this case, taking your existing audited figures as the base year.

Frequently asked questions

What is the maximum project cost under PMEGP?

Up to ₹50 lakh for manufacturing and ₹20 lakh for service or trading-type units under current guidelines.

How much subsidy does PMEGP give?

15% (urban) / 25% (rural) for general category; 25% (urban) / 35% (rural) for special categories.

How much own contribution is needed?

10% for general category, 5% for special category. The bank finances the rest.

Is a project report compulsory?

Yes — it is uploaded with the online application and is the basis of the bank's appraisal.

Can an existing business apply?

No, PMEGP is for new units. Existing PMEGP/REGP units may apply for the second (upgradation) loan.

Is collateral needed?

Loans up to the CGTMSE-covered limit are generally collateral-free; the bank obtains guarantee cover. Your own contribution and primary security (the assets financed) are still required.

Make the report now

Both tools are free, run in your browser, and produce the bank-format document (cost of project, means of finance, projections, DSCR, repayment schedule) that you upload to the PMEGP portal and hand to the bank.

Project report up to ₹10 lakh → Detailed DPR above ₹10 lakh →

Other free tools on loansinfo.in

Mudra loan guide →CMA data (Forms I–VI) →Working-capital assessment →Provisional balance sheet →Stock & book-debt statement →LC application →

Written by Avani Corporation, Indore, from bank-side appraisal experience. Scheme parameters change; verify the latest on the official PMEGP portal (kviconline.gov.in) before applying. The sanctioning bank's assessment is final. Help on WhatsApp: 9183020110.