District Industries Centre, Puducherry

Loan Schemes


Government of India has introduced a new credit linked subsidy programme called Prime Minister’s Employment Generation Programme (PMEGP) by merging the two schemes that were in operation till 31.03.2008 namely Prime Minister’s Rojgar Yojana (PMRY) and Rural Employment Generation Programme (REGP), for generation of employment opportunities through establishment of micro enterprises in rural as well as urban areas.

PMEGP will be a central sector scheme to be administered by the Ministry of Micro, Small and Medium Enterprises (MoMSME).  The Scheme will be implemented by Khadi and Village Industries Commission (KVIC), a statutory organization under the administrative control of the Ministry of MSME as the single nodal agency at the National level.  At the State level, the Scheme will be implemented through State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) and banks. 


 (i)  To generate employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures/projects/micro enterprises.

(ii)  To bring together widely dispersed traditional artisans/ rural and urban unemployed youth and give them self-employment opportunities to the extent possible, at their place.

(iii) To provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth in the country, so as to help arrest migration of rural youth to urban areas.

 (iv) To increase the wage earning capacity of artisans and contribute to increase in the growth rate of rural and urban employment.

Implementing agencies & Area:

KVIC and KVIBs in rural areas of the country and DICs in both rural and urban areas of the country. In Puducherry the scheme will be implemented by District Industries Centre in Urban Areas i.e. Municipal Areas and by Puducherry Khadi & Village Industries Board (PKVIB) in Rural Areas i.e. Commune Panchayat Areas

Maximum Project size:

Rs.25.00 lakhs for manufacturing sector and Rs.10.00 lakhs for service sector.

Quantum and Nature of Financial Assistance

Levels of funding under PMEGP

Categories of beneficiaries under PMEGP

Beneficiary’s contribution (of project cost)

Rate of Subsidy (of project cost)

Area (location of project/unit)


Urban Rural

General Category

10% 15%


Special (including SC / ST / OBC /Minorities/Women, Ex-servicemen, Physically handicapped, NER, Hill and Border areas etc.

05% 25%


Note: (1) The maximum cost of the project/unit admissible under manufacturing sector is Rs. 25 lakh.

         (2) The maximum cost of the project/unit admissible under business/service sector is Rs. 10 lakh.

          (3) The balance amount of the total project cost will be provided by Banks as term loanloan

Eligibility Conditions of Beneficiaries: 

(i)   Any individual, above 18 years of age

(ii)  There will be no income ceiling for assistance for setting up projects under PMEGP.

(iii)  For setting up of project costing above Rs.10 lakh in the manufacturing sector and above Rs. 5 lakh in the business /service sector, the beneficiaries should  possess at least VIII standard pass educational qualification. 

(iv)  Assistance under the Scheme is available only for new projects sanctioned specifically under the PMEGP.

(v)   Self Help Groups (including those belonging to BPL provided that they have not availed benefits under any other Scheme) are also eligible for assistance under PMEGP.  

(vi)  Institutions registered under Societies Registration    Act,1860;

(vii)  Production Co-operative Societies, and

(viii) Charitable Trusts.

(ix)  Existing Units (under PMRY, REGP or any other scheme of Government of India or State Government) and the units that have already availed Government Subsidy under any other scheme of Government of India or State Government are not eligible.

Other eligibility conditions:

(i)  A certified copy of the caste/community certificate or relevant document issued by the competent authority in the case of other special categories, is required to be produced by the beneficiary to the concerned branch of the Banks along with the Margin Money (subsidy) Claim.    

(ii)  A certified copy of the bye-laws of the institutions is required to be appended to the Margin Money (subsidy) Claim, wherever necessary.

(iii) Project cost will include Capital Expenditure and one cycle of Working Capital.  Projects without Capital Expenditure are not eligible for financing under the Scheme.  Projects costing more than Rs.5 lakh, which do not require working capital, need clearance from the Regional Office or Controller of the Bank’s Branch and the claims are required to be submitted with such certified copy of approval from Regional Office or Controller, as the case may be.

(iv)  Cost of the land should not be included in the Project cost. Cost of the ready built as well as long lease or rental Work-shed/Workshop can be included in the project cost subject to  restricting  such  cost of ready built as well as long lease or rental workshed/workshop to be included in the project cost  calculated for a maximum period of 3 years only.

(v)  PMEGP is applicable to all   new viable micro enterprises, including Village Industries projects except activities indicated in the negative list of Village Industries. Existing/old units are not eligible.


(1) The Institutions/Production Co-operative Societies/Trusts specifically registered as such and SC/ ST/ OBC/ Women/ Physically Handicapped / Ex-Servicemen and Minority Institutions with necessary provisions in the bye-laws to that effect are eligible for Margin Money (subsidy) for the special categories.  However, for   Institutions /Production Cooperative Societies/Trusts not registered as belonging to special categories, will be eligible for Margin Money (Subsidy) for general category.

(2) Only one person from one family is eligible for obtaining financial assistance for setting up of projects under PMEGP.  The ‘family’ includes self and spouse.

Educational Qualification:

Minimum VIlI pass for the project cost above Rs.10.00 lakh under manufacturing sector and above Rs.5.00 lakh project cost under service sector.

EDP Training:

2 weeks EDP training is mandatory. After completing EDP training only, first installment of Bank loan will be released. Persons already undergone training of 2 weeks will be exempted from further training.

How to apply:

The scheme will be advertised through print and electronic media. The beneficiary can submit application along with project report at nearest KVIC/KVIB/DIC/Bank offices.

Documents required:

Certificate of education qualification, Technical Qualification. Cat Certificate (wherever applicable), EDP Training Certificate (for beneficiaries already undergone)

Selection of Beneficiaries:

Beneficiaries will be selected through interview process by the District Task Force Committee headed by the District Magistrate/Dy. Commissioner/Collector.

Project sanction:

Project will be sanctioned by Financing branches of the Banks as per techno-economic viability

Amount of Bank Loan:

Bank sanctions and release 90-95% loan of the sanctioned project cost

Own Contribution:

10% of the project cost in case of general category and 5% in case of weaker section beneficiaries.

Marketing Support:

As a marketing support for the products produced by  PMEGP units, exhibitions, Buyer-seller meet etc. will be arranged to promote their products.

Physical Verification :

As a monitoring part and to know the impact of the scheme and to ensure proper utilization of Govt. subsidy, 100% physical verification will be conducted.


Monitoring will be done at State/Zonal/National level

Backward & Forward Linkages:

As a support service, funds will be provided for Backward & Forward Linkages under the scheme.

Industry Groups:

Agro & Food Processing Industry; Forest based Industry; Handmade Paper/Fiber; Mineral based Industry; Polymer & Chemical based Industry; Rural Engineering & Bio-Technology; Service Industry including Textiles.

Negative List:

Industry connected with meat i.e. processing, canning, serving items made of it, intoxicant items like Beedi/Pan/cigar/cigarette etc., Dhaba serving liquor, preparation/producing tobacco as raw materials, tapping of toddy for sale, connected with cultivation of crops/plantation, Harvester machines, manufacturing of polythene carry bags of less than 20 microns, manufacturing of polythene carry bags of less than 20 microns thickness,  manufacturing of carry bags or containers made of recycled plastic for storing, carrying, dispensing or packaging of food stuff, Processing of Pashmina  wool and such other products like hand spinning and hand weaving, khadi programme availing sales rebate,  Rural Transport

For further details:


The General Manager
District Industries Centre
Thattanchavady, Puducherry-605009
Phone No:2248391, 2249392, 2248987
e-mail: dic_pdy@bsnl.in

- for assistance in Urban Areas i.e. Municipal Areas


Chief Executive Officer
Pondicherry Khadi & Village Industries Board
Kamaraj Salai, Saram
Puducherry 605013


- for assistance in Rural Areas i.e. Commune Panchayat Areas