PMEGP Subsidy Scheme 2026: 15%–35% Margin Money Grant & Project Ceilings
Detailed breakdown of PMEGP subsidy calculations, eligibility norms, project cost ceilings, own contribution rates, and the step-by-step KVIC application process.
- •Capital margin money subsidy of 15% to 35% of total project cost directly funded by Ministry of MSME / KVIC.
- •Project cost ceilings: ₹50 Lakh for Manufacturing sector and ₹20 Lakh for Service / Business sector.
- •Beneficiary own contribution is only 10% (General Category) or 5% (Special Categories: Women, SC, ST, OBC, PH, Minorities, Ex-Servicemen, NER).
- •Second loan for upgradation / expansion of existing successful PMEGP units up to ₹1 Crore (mfg) with 15%–20% subsidy.
- •Apply online on the official KVIC portal at kviconline.gov.in/pmegpeportal.
1. What is PMEGP?
The Prime Minister’s Employment Generation Programme (PMEGP) is a flagship credit-linked subsidy scheme administered by the Ministry of MSME through the Khadi and Village Industries Commission (KVIC) as the national nodal agency.
Under PMEGP, entrepreneurs setting up new micro-enterprises receive a **non-repayable capital subsidy (called Margin Money)** credited directly into a 3-year term deposit receipt (TDR) in their lending bank, which is adjusted against the loan principal after physical verification.
2. Subsidy Percentage Matrix
The subsidy percentage depends on the promoter's social category and the geographical location of the proposed unit:
| Beneficiary Social Category | Own Equity Contribution | Urban Area Subsidy | Rural Area Subsidy |
|---|---|---|---|
| : |
| : |
|---|
| : |
|---|
| : |
|---|
| General Category (General Male) | 10% of project cost | 15% of project cost | 25% of project cost |
| Special Categories (Women / SC / ST / OBC / Minorities / PH / Ex-Servicemen / NER) | 5% of project cost | 25% of project cost | 35% of project cost |
3. Project Cost Ceilings
- **Manufacturing Sector:** Maximum eligible project cost is **₹50 Lakh** (Maximum possible subsidy: ₹17.50 Lakh in rural special category).
- **Service / Business Sector:** Maximum eligible project cost is **₹20 Lakh** (Maximum possible subsidy: ₹7.00 Lakh in rural special category).
- **Second Loan for Upgradation:** Existing well-performing PMEGP units can apply for a second expansion loan up to **₹1.00 Crore** (Manufacturing) or **₹25 Lakh** (Service) with an additional 15%–20% subsidy.
4. Eligibility Requirements
- Minimum age: 18 years. (No upper age limit).
- **Educational Qualification:** For projects costing above ₹10 Lakh in Manufacturing or above ₹5 Lakh in Service sector, the applicant must have passed at least **Class VIII (8th Standard)**.
- Only **NEW greenfield units** are eligible for the first loan. Existing operational units are not eligible for the initial grant.
- Only one person per family (self and spouse) can avail financial assistance under the scheme.
- Mandatory **Entrepreneurship Development Programme (EDP)** training (5–10 days) must be completed before loan disbursal.
5. How to Apply on KVIC Portal
- Visit `https://www.kviconline.gov.in/pmegpeportal/`.
- Click on **"Application for New Unit"**.
- Fill the 20-point application form: Aadhaar number, sponsoring agency (KVIC / KVIB / DIC), industry activity, unit location, and preferred financing bank.
- Upload required attachments: Detailed Project Report (DPR), Passport photograph, Caste certificate (if special category), 8th pass certificate, and Rural Area certificate (from Gram Panchayat).
- Submit the application to generate your Application ID. The District Level Task Force Committee (DLTFC) scrutinizes the proposal and forwards it to your chosen bank branch for loan sanction.
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