Every other scheme here is a guarantee. PMEGP is an actual subsidy — money you do not repay. The conditions are correspondingly strict: new units only, and a process measured in months rather than weeks.
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Everything else on the government list is a guarantee or a refinance line. PMEGP is a genuine capital subsidy — a portion of the project cost you never repay. The conditions are correspondingly strict, and the single one that disqualifies most enquiries is that the unit must be new.
The subsidy is a percentage of project cost, and it moves on two axes: who you are, and where the unit is. Rural locations attract more than urban. Special categories — SC, ST, OBC, women, minorities, ex-servicemen, differently abled, and applicants in North Eastern and hill regions — attract more than the general category.
The range runs from roughly 15% at the general-urban end to 35% at the special-category-rural end. Your own contribution moves inversely: around 10% for general applicants, around 5% for special categories.
Because the slabs and the project ceilings are revised periodically, confirm the current figures with your District Industries Centre or KVIC office before building a project report around them.
PMEGP funds new units only. An existing business seeking expansion capital is not eligible, however small or however deserving.
This is not a technicality that can be worked around by registering a new entity for an old business — the scheme's whole purpose is employment generation through new enterprise, and the verification is designed to catch exactly that. If your business is already running, the routes worth looking at are CGTMSE for collateral-free credit, state-level MSME subsidies, or ordinary lending.
There is a separate second-loan facility for upgrading existing PMEGP units that have repaid their first loan, which is a different thing from funding an existing business that never took one.
Expect months, not weeks. That is the honest trade for money you do not repay, and it is why PMEGP is unsuitable for anyone with an immediate requirement.
Nobody can guarantee you a PMEGP sanction
Agents offering assured approval for a fee are selling something that is not theirs to sell — the district task force and the bank both make independent decisions. Preparing a project report is legitimate paid work and a good consultant is worth having. A promise of sanction is not. Apply through the official portal, and never pay anything described as a facilitation charge for approval itself.
It fits someone setting up a genuinely new manufacturing or service unit, who can wait several months, and who has a realistic project rather than an aspiration. The subsidy is substantial enough to change project viability outright — on a ₹20 lakh project, a 25% subsidy is ₹5 lakh that never has to be repaid.
It does not fit an existing business, an urgent requirement, or a venture that is still uncertain about its product. For those, see startup business loans and the note there about debt being the wrong instrument for genuine uncertainty.
Q1. Can an existing business apply for PMEGP?
No. PMEGP funds new units only. Existing businesses should look at CGTMSE-backed lending, state MSME schemes, or ordinary commercial borrowing.
Q2. How much subsidy will I get?
Between roughly 15% and 35% of project cost, depending on your category and whether the unit is rural or urban. Special categories and rural locations attract the higher slabs. Confirm current figures with KVIC or your DIC.
Q3. Do I get the subsidy in cash?
No. It is held in a term deposit linked to the loan account and adjusted after a three-year lock-in, provided the unit is operating. Closing the unit within that period means losing it.
Q4. Is the bank obliged to sanction?
No. Even after the district task force approves, the bank appraises it as a lending proposition and can decline. The scheme provides the subsidy framework, not a lending instruction.
Q5. How long does it take?
Realistically several months from application to disbursal, allowing for the task force interview, bank appraisal and compulsory EDP training. Plan accordingly — this is not a route to money this quarter.
Q6. What is the maximum project cost?
Up to ₹50 lakh for manufacturing and ₹20 lakh for service units under the enhanced limits. These have been revised over time, so verify before finalising your project report.
Money Bharti checks whether your project qualifies as a new unit under PMEGP and what the realistic alternatives are if it does not, across RBI-registered banks and NBFCs. Soft enquiry only.
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