Prime Minister’s Employment Generation Programme (PMEGP) is a central sector scheme that assists prospective beneficiaries to establish new micro-enterprises through small loans. During the five year period from FY 2020–21 to FY 2024–25 approximately 63 per cent of units in the manufacturing sector and 93 per cent of units in the service sector with projects costing up to Rs one mn were assisted under the scheme. The programme focuses on smaller project costs to broaden access to entrepreneurship and employment.

The Ministry of Micro, Small and Medium Enterprises (MSME) has prioritised applications for projects below Rs one mn to facilitate credit and subsidy access. The Reserve Bank of India (RBI) guideline that no collateral security should be insisted for loans up to Rs one mn has been reemphasised to major banks to ensure compliance. There is no requirement for any educational qualification for setting up projects costing up to Rs one mn in the manufacturing sector and up to Rs zero point five mn in the service sector.

The ministry operates the integrated Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength (CHAMPIONS) portal to provide speedy and effective redressal of grievances relating to ministry schemes including PMEGP. The portal is intended to handhold and assist micro, small and medium enterprises in navigating government schemes and policies, provide guidance and advisory services and connect enterprises with relevant ministry officials, state governments, lending institutions and other agencies. This digital mechanism aims to streamline support and improve access to scheme benefits.

Following deregulation of bank interest rates by the Reserve Bank of India, interest rates for PMEGP loans are determined by individual banks in line with their credit and underwriting policies within the regulatory framework. The central bank has issued directions to regulated entities to ensure transparency, fairness and adequate disclosure of loan terms and has encouraged banks to accord priority to sanctioning projects under PMEGP. The Minister of State for Micro, Small and Medium Enterprises provided these details in a written reply to Rajya Sabha.