Answer

1. F

   Facts

   The most generous business subsidy in India for new manufacturing and service units. Government covers 15–35% of project cost as outright subsidy, non-repayable. Total project cost up to ₹50L (manufacturing) or ₹20L (service). Your margin money is 5–10% of project cost. Bank funds the rest.

2. P

   Provisions and law

   • PMEGP Guidelines
   • Subsidy Rates
   • Eligibility
   • EDP Training
3. A

   Analysis

   How PMEGP actually works (real numbers): Project cost ₹25L manufacturing (rural). Beneficiary margin: 5% = ₹1.25L (your own money). Subsidy: 25% = ₹6.25L (kept in bank as TDR for 3 years, reduces loan principal at the end of lock-in). Bank loan: 70% = ₹17.5L. After 3 years: TDR of ₹6.25L converted, your effective loan becomes ₹11.25L instead of ₹17.5L. Real cost of capital: much lower than a commercial loan. Subsidy is pure government money, non-repayable if business survives 3 years. Eligible activities under PMEGP: Manufacturing: food processing, apparel, handicrafts, agro-based industries, engineering products, electronics assembly, paper products, chemicals (except hazardous). Services: beauty parlours, repair shops, bakeries, tailoring, transport (auto/taxi for self-employment), cycle repair, mobile repair.

4. C

   Conclusion

   1. 1Confirm you have a NEW business idea, PMEGP is only for new units, not expansion
   2. 2Check activity list, your business must not be on the negative list (tobacco, alcohol, etc.)
   3. 3Register on PMEGP portal: kviconline.gov.in → New Applicant Login
   4. 4Prepare Detailed Project Report (DPR): cost of project, projections, market analysis, repayment plan
   5. 5Get EDP (Entrepreneur Development Programme) training, minimum 6 days from KVIC-approved centre
   6. 6Select implementing agency: KVIC (Khadi-related), KVIB (rural), DIC (urban/district)

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.