Business funding · Government Schemes
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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.
PMEGP Guidelines; Subsidy Rates; Eligibility; EDP Training
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.
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