A look at government funding available to first generation entrepreneurs
With the current global economic turbulence taking a toll on the number of jobs available in the country, a large number of educated people are finding it increasingly difficult to find new jobs, even keeping the existing ones. In a situation fraught with such uncertainty, encouraging entrepreneurial talent to set up more enterprises may help the economy to gain some ground and generate jobs at the same time.
This where the government's Prime Minister Employment Generation Programme (PMEGP), which targets the educated unemployed section of the population, comes in.
Consider the case of Rajesh Bansal, a beneficiary from Maharashtra. Rajesh initially took a loan of Rs. 7.5 lakh in 2001. Back then it was known as the Rural Employment Generation Programme or the REGP. REGP was later merged with the Prime Minister's Rozgar Yojana (PMRY) and rechristened as PMEGP.
Almost a decade later, Rajesh has a success-story to share. With the money he received, he set up his own soap manufacturing business. Today, his soaps are sold in many parts of Maharashtra and his annual turnover is a whopping Rs. 5.5 crore.
“There were hardly any hassles involved. The whole process didn't take much time. My bank coordinated with the Khadi and Village Industries Commission (KVIC) and it was a smooth sail for me. I didn't even have to visit different offices like in the case of most other loans,” said Rajesh.
According to official estimates, the PMEGP has assisted more than 1.7 lakh first generation entrepreneurs like Rajesh. This assistance has been in the form of margin money subsidy which the entrepreneurs need to set up their own units. The money is provided through District Industries Centres (DIC), State Khadi and Village Industries Board (KVIB) and State offices of the KVIC.
So who is eligible to become a beneficiary of the PMEGP? Generally, any adult without any ceiling of income is eligible. However, a minimum educational qualification of having passed Class VIII is essential only for bigger project investments and there is a cap of one beneficiary per family.
Generating self-employment is at the core of the PMEGP. Establishing micro-enterprises, organising traditional artisans and jobless youth and stopping work-related migration are some of the other goals of the programme. Given the current economic doldrums, launching more such programmes and their proper implementation may be a much-needed and timely remedy.