Everything to know about Pradhan Mantri Rojgar Yojana

With a burgeoning youth population and limited employment avenues, it is difficult for many people in India to find gainful employment. To address this issue, the Pradhan Mantri Rojgar Yojana was launched by the central government of India in 1993. The main goal of introducing this scheme was to provide fulfilling self-employment opportunities to the country's educated population. Under this programme, the government provides subsidised financial aid to those who want to start their own venture in different sectors of the economy, viz. business, industrial, and services. 
 
Read on to learn more about the PMRY scheme.
 

Objectives of Pradhan Mantri Rojgar Yojana

The primary goal of this scheme is to help the country's unemployed youngsters find gainful self-employment. The government of India aims at creating 7 lakh micro enterprise units over a 2.5 year period through this programme, which can sustainably employ the educated youth of the country. The PMRY scheme entails the establishment of self-employment ventures in various economically viable undertakings, excluding direct agricultural operations.
 

Pradhan Mantri Rojgar Yojana Features

 
The following are the key specifications of the loan offered under this initiative:
 

1. Project cost

   The project cost funded under this scheme depends upon the nature of your business. The following table highlighting the maximum eligible amount for different sectors:
    

   Sector	Loan amount
   Business sector	Rs 2 lakhs
   Service sector	Rs 5 lakhs
   Industry sector	Rs 5 lakhs

    

2. Subsidy

   • The PMRY scheme provides a subsidy grant of 15% of an entire project’s cost to all the Indian states, except for the seven north-eastern states. However, the upper ceiling per beneficiary is fixed at Rs 7,500 in this case. 
   • The maximum subsidy will be 15% of the revised project cost, which is also subjected to a limit of Rs 12,500 per individual, if the funds' disbursement is below the original project cost.
   • In the case of beneficiaries from the north-eastern states, PMRY provides a subsidy of 15% of the entire project cost, with an upper cap of Rs 15,000 per beneficiary.

3. Rate of interest

   The interest rate levied under this scheme is determined by the Reserve Bank of India (RBI) and is subject to change at any time.
    

Also Read: All You Need to Know About Business Loan Interest Rate 2022
 

4. Tenure

   The PMRY loan repayment tenure can range from three to seven years. 
    

5. Collateral

   Beneficiaries can avail of unsecured loans up to Rs 1 lakh. The scheme also provides an exemption of up to Rs 1 lakh per participant in the case of a partnership.
    

6. Margin money

   Margin money requirements vary from one lending institution to the next. Usually, the lender may demand beneficiaries to put margin money ranging from 5% to 12.5% of the overall project cost.
    

7. Training

   Beneficiaries in the business and service sectors must complete a 7 to 10 days’ training programme. On the other hand, industry sector beneficiaries need to undergo 15 to 20 days of training. The training cost per beneficiary can go up to Rs 2,000.
    

What is the minimum qualification required to enrol under PMRY?

The table below summarises the complete eligibility conditions for this unemployed scheme in India. 
 

Parameters	Description
Age	In case the applicant belongs to the general category, the minimum and maximum age limits for applying to this scheme are 18 and 35 years, respectively. In case the applicant belongs to the SC/ST category, the age limit is capped at 45 years.  Applicants residing in any of the seven north-eastern states can apply for the scheme till 40 years of age.
Educational qualifications	Applicants must have completed education at least up to class 8th.
Occupation status	PMRY scheme applies to the unemployed population only.
Annual family income	The total family income of the applicant must not exceed Rs 40,000 in a year. The term family here includes both parents and a spouse of the beneficiary.
Credit behaviour	The applicants must not have any previous loan default in their name.
Eligibility sector	This scheme is open to all sectors except those engaged in direct agricultural activity. However, the applicant must have an economically viable business plan during application submission.
Residential status	The applicant must have lived in the area for at least three years as a permanent resident.

 

Are there any reservations for SC/ ST/ OBC candidates under the PMRY scheme?

 
The PMRY initiative, like any other government scheme, places a special emphasis on the development of the weaker section of society. 
 
The scheme has a 22.5% reservation for SC and ST candidates, whereas a 27% reservation is provided for beneficiaries from Other Backward Class (OBC).
 

Documents required under Pradhan Mantri Rojgar Yojana

 
To qualify for the PMRY scheme, you must have the following documents:
 

• Driving licence
• Birth certificate or SSC certificate (for date of birth proof)
• Residency proof
• Income certificate issued by Mandal Revenue Officer (MRO)
• Caste certificate issued by MRO (for SC/ST candidates)
• Entrepreneurship Development Programme (EDP) training certificate 
• Technical, qualification, and experience certificates 
• Copy of the proposed project plan

 
Also Read: Simplifying Business Loan Documentation
 

Changes to Pradhan Mantri Rojgar Yojana eligibility

Several modifications have been made to this scheme since its inception. The most important ones are listed below.
 

• As per modifications in Pradhan Mantri Rojgar Yojana eligibility, the maximum age limit for acquiring a loan under this scheme has been increased to 45 years for the SC/ST category beneficiaries.  

• If the beneficiary belongs to any of the seven states of northeast India — Assam, Mizoram, Manipur, Tripura, Nagaland, Sikkim, and Arunachal Pradesh — their upper age limit has been raised to 40 years. 

• Earlier, the minimum qualification requirement for an applicant was class 10^th pass but after modifications, it has been relaxed to class 8^th pass.

• The project's cost cap has been increased to Rs 2 lakhs from the earlier Rs 1 lakh.

• Businesses engaged in allied agricultural activities can now apply for financing through the PMRY initiative. Direct agricultural industries, such as farming, are still excluded from the scheme.

• Applicants can now avail group finance of up to Rs. 5 lakhs.

Implementing Agency

 
The District Industries Centres and the Development Commissioner for Small Scale Industries (DCSSI) decide the PMRY scheme’s target for a particular region after reviewing its unemployment rate, population, and economic strength. The task force set up for this scheme execution is responsible for the following activities:
 

• Identifying and motivating qualified entrepreneurs
• Categorizing activities into the business, industry, and service sectors to develop an appropriate action plan
• Identifying subsidiary activities 
• Recommending loans to qualified entrepreneurs 
• Acquiring the necessary permits and clearances from relevant authorities within a short time.

 
The following steps are involved in the task force's action plan:
 

• Selection of candidates
• Identification of economically productive activities
• Locating the required infrastructure
• Follow-up services
• Finally, liaising with government agencies, banking institutions, industry, service providers, and enterprises.

 

What are the steps to apply for PMRY?

 
Beneficiaries can apply for this PMRY loan by visiting the official website of the Pradhan Mantri Rozgar Yojana scheme. They must download the application form from the portal, complete it, and submit it to a PMRY-approved bank or the local District Industries Centre (DIC). Following the submission, the relevant authority will review the application and if found satisfactory, the applicant will be called for an interview. After the successful screening phase, the shortlisted candidates become eligible for receiving the loan.
 
Also Read: Top Government Business Loan Schemes in India
 

To conclude

 
The PMRY scheme seeks to encourage entrepreneurial spirit among the educated but unemployed youth and women of India. The simple eligibility requirements of this loan make it a lucrative option for such individuals to avail funds for their business ventures. However, inability to meet even one eligibility condition might result in the rejection of your loan application. If you are looking for hassle-free, quickly approved loans to start your entrepreneurial journey or if you already have a well-established business and are wishing to expand, the best course of action for you is to apply for a business loan.