PMEGP: Rs 1,000 crore subsidy released for 11,333 new micro-enterprises

Union MSME Minister Jitan Ram Manjhi released Rs 1,000 crore of margin money subsidy under the Prime Minister's Employment Generation Programme (PMEGP) on Wednesday, October 28, 2026, at a function at Kartavya Bhawan-3 in New Delhi. The Ministry of Micro, Small and Medium Enterprises said the money will support 11,333 new micro-enterprises across India whose bank loans of about Rs 3,260 crore have already been sanctioned, and is expected to create more than 1.02 lakh jobs.

PMEGP is the government's main credit-linked subsidy scheme for people who want to start a new small business outside farming: a workshop, a food-processing unit, a tailoring unit, a repair shop or a small service business. "Credit-linked" means the subsidy only comes with a bank loan. The entrepreneur gets a loan from a bank for the project, and the government pays part of the project cost, called margin money, into that loan account. According to the scheme's published terms, this share ranges from 15% to 35% of the project cost, depending on the applicant's category and on whether the unit is in a rural or urban area. That lowers how much the entrepreneur has to repay.

For first-time founders in small towns and villages, the hardest step is often finding the money to begin. Banks are wary of new borrowers with no business record, and a person starting a small unit rarely has savings to cover the full cost. By reducing the loan burden, PMEGP is meant to tip that balance. The scheme is run nationally by KVIC, with state Khadi and Village Industries Boards, District Industries Centres and the Coir Board also processing applications, which is why so much of its reach is outside the big cities.

The size of this release is notable. The 11,333 units covered by this one tranche are close to half the 25,895 units the scheme had supported in the whole of 2026-27 until now. With the ministry estimating more than 1.02 lakh jobs, that works out to around nine jobs per unit on average. Those figures are the ministry's own estimates; how many of the new units survive and keep their workers will only be clear later.

For anyone thinking of applying, the practical lesson is that PMEGP money follows a bank loan. Applicants apply online, their project is checked by the implementing agency, and the bank decides on the loan. The subsidy is released only after that, so a clear project report and a bank's approval are the real first steps.

Short-term: The 11,333 entrepreneurs whose loans are sanctioned will have the subsidy credited, which lowers their repayment burden and lets them start or expand their units.

Long-term: If most of these units survive, they add to local jobs in small towns and villages and to the base of small manufacturers and service providers. The scheme's results will depend on how many units stay in business after the first few years.

Who is affected: First-time micro-entrepreneurs, especially in rural and semi-urban areas; banks that lend under PMEGP; KVIC, state boards and District Industries Centres that run the scheme; and workers who may find jobs in the new units.

Questions and Answers