The scheme will undergo some modifications to gain more momentum, including less documentation and no collateral requirements for vulnerable, rural and first-time entrepreneurs, said people familiar with the developments. So far, loans worth ₹91,000 crore have been sanctioned under the scheme, which was launched in 2008-09 and extended for a five-year period from 2021-22 to 2025-26.
“We are evaluating certain parameters to optimise the use of funds to enable support to a larger number of beneficiaries,” an official said on condition of anonymity. “A final decision will be taken after consultation with the finance ministry.” The flagship self-employment scheme of the micro, small and medium enterprises (MSME) ministry generated an estimated 3.63 million jobs and helped establish more than 400,000 micro-enterprises between 2021-22 and 2025-26.
“The scheme is very good, and it is helping to establish new micro-enterprises. It has yielded substantial results on the ground, and the extension of the scheme would be helpful,” said Anil Bhardwaj, secretary general, Federation of Indian Micro and Small & Medium Enterprises.
PMEGP supports aspiring entrepreneurs by providing margin money subsidies on bank loans. Margin money subsidy, amounting to ₹13,453 crore, was disbursed to more than 400,000 units between 2021-22 and 2025-26. “Other modifications to the scheme may include pre-sanction physical verification report and geo-tagging,” said an executive, who did not wish to be identified.
According to the MSME ministry, 80% of the enterprises established under the scheme were located in rural areas. The scheme recorded high participation from women, who accounted for 40% of the micro-enterprises supported under PMEGP. Around 45% of the total margin money subsidy disbursed went to women entrepreneurs.
Bhardwaj said integrating modern technology and digital platforms could make the scheme more transparent, accessible and easier to monitor. “The scheme can also include third parties or intermediaries to facilitate onboarding of self-help groups and others who are not aware of the scheme. This will help increase the number of beneficiaries,” he said.