Sep 21, 2023
India is home to one of the youngest populations in the world, but the rising unemployment figures are an alarming factor. The right schemes and interventions from the government can help create more jobs for people, which is why the creation of new policies is important.
With an evergrowing population, India has been struggling with prevalent unemployment, especially among its educated youth. To harness its most valuable asset for economic growth, the government launched a historic scheme in 1993 to promote skill-based self-employment generation – Pradhan Mantri Rozgar Yojana or PMRY.
What is PMRY?
The full form of PMRY is Pradhan Mantri Rozgar Yojana, and it focuses on helping unemployed youth start small businesses. The Indian government launched the scheme to provide subsidised financial assistance to unemployed youth and women that can help them start their businesses in the manufacturing, service, and trading sectors.
The PMRY programme was originally aimed to benefit more than 1 million trained unemployed youth and women over two years and six months. However, the government decided to turn it into a permanent scheme upon witnessing its successful implementation and favourable outcome.
Over the years, the scheme has undergone many amendments and evolved to complement the changing unemployment landscape in India. Even after all these changes, the objectives remain the same – providing financial assistance for individuals to set up businesses and incentivising employers to generate employment. Read about PMRY’s objectives, benefits, and amendments in detail below.
Objectives of PMRY
The government developed the Pradhan Mantri Rozgar Yojana (PMRY) to combat widespread youth unemployment. However, with the shift in the country’s economic landscape, the scheme’s objectives have evolved. Let’s delve deeper into the specific objectives of this scheme:
1. Encourage Self-Employment:
Pradhan Mantri Rozgar Yojana (PMRY) aims to encourage entrepreneurship and self-sustenance by providing financial support for those looking to set up small businesses. The scheme’s aim is to promote alternative methods of livelihood when jobs in the market remain limited and irregular. By disbursing loans at subsidised rates, this scheme encourages educated youth to transform their small business ideas into sustainable sources of income.
For example, if you are unable to secure a regular job but have a passion for handicrafts, you can apply for assistance as per the PMRY loan limits to start your journey. It will not only be a source of income for yourself but it also creates employment opportunities for others.
2. Create Job Opportunities:
This scheme has the objective of dual employment generation. As per the PMRY loan eligibility criteria, you can gain access to financial assistance and create a job opportunity for yourself. Also by doing so, you can generate employment for the community.
For example, if you have used financial assistance from Pradhan Mantri Rozgar Yojana to start a small handicrafts and artwork business and, in the process, you hire local workers to scale up your operations, you have not only ensured your income flow but also boosted the economy by creating jobs and solving the problem of unemployment at a smaller level.
3. Boost Income Levels:
PMRY aims to improve the economic condition of individuals by promoting self-reliance as a means of earning a livelihood. This boosts the family’s income level, breaking the cycle of unemployment and poverty.
Say your handicrafts business scales up as a result of receiving financial assistance under the scheme; this will ensure your financial stability and improve the standard of living of the people who work for you. This boost in income at an individual level will ultimately contribute to the overall economic growth.
4. Promote Women’s Entrepreneurship:
Pradhan Mantri Rozgar Yojana (PMRY) recognises the need to uplift the status of women in society by involving them in the process of nation-building and economic growth. It offers special assistance to women entrepreneurs in terms of reserved application spots, a simplified selection process, and subsidised rates of assistance.
By fostering and empowering women entrepreneurs, this scheme aims to create a sustainable and inclusive ecosystem to nurture entrepreneurship, promote self-reliance, and build an enabling environment to create more jobs and eliminate gender-based discrimination in India.
Features of PMRY
If you are exploring PMRY loan eligibility, let’s first understand the notable features of this relief scheme.
1. Financial Assistance:
Under this scheme, you can avail financial assistance for all economically viable business activities. Assistance is available for all types of industrial, business, and service ventures. Furthermore, an amendment to the scheme has brought agriculture and related activities within the scope of the assistance provided, excluding direct agricultural activities such as arable farming, purchase of fertilisers or soil improvers, and such.
2. Loan Limit:
The central government promotes Pradhan Mantri Rozgar Yojana in both urban and rural areas. According to recent amendments to the scheme, here are the PMRY loan limits.
| Sector | Maximum Prescribed Limit |
| Business | INR 1 lakh |
| Service | INR 2 lakhs |
| Industrial | INR 2 lakhs |
| Partnerships | INR 10 lakhs |
3. Collateral:
If your project costs below or up to INR 1 lakh, there is no collateral requirement. The government has extended this exemption to partnership projects where the exemption limit applies per partner in the project. For projects approved in small-scale industries (SSI), the collateral exemption limit is INR 5 lakhs.
4. Subsidy and Margin Money:
The grant is restricted to 15% of the total project cost, with a ceiling of INR 7,500 per entrepreneur. Also, the lending institution can charge a percentage sum of margin money, ranging from 5% to 16.25% of the project cost.
5. Rate of Interest:
No specific interest rate prevails under the scheme, which means that lenders will charge a normal interest rate according to your PMRY loan limit.
6. Repayment:
Once an individual sets up a business and starts commercial operations, they must start repaying the loan and the interest applicable. The repayment period ranges between three and seven years under the scheme. After analysing the project, your PMRY loan eligibility, and other related factors, the lender will determine the repayment period for your specific case.
7. Skill Development:
You will receive 15 to 20 days of training to help you set up your business. The ceiling amount for training and operating costs is INR 2,000 per case.
8. Implementation and Evaluation:
The Development Commissioner for Small-Scale Industries (DCSSI) of the Ministry of Small, Rural and Agricultural Industries heads the PMRY scheme. Implementation occurs at the state level through the Small Industries Service Institute (SISI), which has 30 branches across major Indian cities. DCSSI has set up a special unit to monitor, evaluate, and accordingly amend the scheme.
Now that you have understood the features governing the PMRY loan limits, it’s important to understand the qualification standards or PMRY loan eligibility.
What is PMRY Eligibility?
PMRY’s main intention is to bridge the socioeconomic gap and reduce unemployment in the country. To ensure that this scheme reaches its target beneficiaries and to protect the limited resources of the scheme, the government has specified certain conditions. In case you wish to enjoy the benefits under this scheme, consider these parameters to check your PMRY loan eligibility.
- Age Limit: The basic PMRY loan eligibility criteria is the age limit, which includes two categories for educated and unemployed people.
| Category | Limit |
| Standard age limit | 18-35 years |
| Women, SC/STs, ex-servicemen, and the physically handicapped | 18-45 years |
- Educational Qualification: Those who have cleared Class 8 from a recognised educational institute are eligible under this scheme. The government gives particular preference to applicants who have completed at least six months of training at a recognised institution.
- Family Income: At the time of application, the income of the applicant, along with those of their spouse and parents, should not exceed INR 40,000 per month.
- Residence. As a criterion for PMRY loan eligibility, you should be a permanent resident of the area from which you have applied for the scheme for at least the previous three years.
- Defaults: You should not have defaulted in the repayment of any credit or scheme benefits to a bank or financial institution. Policy exclusion will occur from this scheme if you have already received support under other subsidy-linked government schemes.
- Reservation: PMRY ensures special preference for women as well as the weaker sections of society. There is a 22.5% reservation for Scheduled Castes and Scheduled Tribes (SC/ST), and 27% for Other Backward Classes (OBCs).
- Entrepreneurial Talent: One of the key factors in determining PMRY loan eligibility is the individual’s intent to set up a business and create jobs. While interviewing an applicant, the task force will look at their ability to create a sustainable livelihood through self-employment.
Banks and District Industries Centres (DICs), which have been set up by the government to provide the necessary services and support for entrepreneurs looking to set up micro, small and medium enterprises (MSMEs), will analyse your application to ensure you meet all the requirements for PMRY loan eligibility before giving approval. They may provide exceptions on a case-by-case basis.
How to Apply for PMRY
Here’s a quick guide on applying for the scheme:
Step 1. The first and most important step is to finalise your project idea, based on which you have to prepare a detailed project report. An ideal project report should contain the following:
- Value of fixed assets
- Raw materials required
- Estimated expenditures such as rent, salaries, and more.
- Projected sales, profits, breakeven analyses, and profitability ratios
- Repayment schedules
- A market study of the proposed venture.
Step 2. Applicants can find the application form on the official website of Pradhan Mantri Rozgar Yojana here: https://dcmsme.gov.in/publications/forms/pmryform.html. Download the form, and fill in the details along with the required documents.
Step 3. The applicant must submit the completed application form to the local DIC or the nearest bank. The DIC/bank will review your application and invite you to an interview, which the PMRY task force will conduct.
Step 4. Once you receive approval, you will receive an intimation letter of selection and allotment from the designated lender. You can discuss the viability of your project with the allotted lender and make the necessary alterations to the business plan.
Step 5. As part of the selection process, you will receive training under the scheme’s guidelines. You must submit the certificate of completion to the bank to receive the funds.
Step 6. As a final step, the DIC/bank extends its support in grounding the approved project. Before commencing operations, you may have to take relevant approvals and clearances from bodies like local municipal committees, the panchayat, the pollution control board, or tax authorities. You can check with your local DIC to get assistance with these clearances.
What are the Documents Required for PMRY Application?
You must submit the duly completed application form to the local DIC or bank together with certified copies of the following documents:
- Proof of date of birth (state secondary certificate (SSC) or a transfer certificate (TC) from your school)
- Certificate of academic and technical qualifications
- Ration card or any other proof of residency that states you have been a resident of that area for more than three years
- Experience certificate, if any
- Income certificate issued by the mandal revenue officer (MRO) of the concerned mandal or administrative division
- Caste certificate issued by the MRO, if applicable
- Driving licence in case of candidates applying for motor vehicles
- Copy of the proposed project report
- Passport-size photographs
- Training certificate
- Any other specific document required by the DIC/lender.
Why PMRY is the Need of the Hour
The government introduced Pradhan Mantri Rozgar Yojana as a pioneering step towards creating a level playing field for educated youth in India. Through features like repayment flexibility, skill development opportunities, and uplifting weaker sections, the scheme helps build a conducive context for able entrepreneurs who find it difficult to secure appropriate jobs.
Depending on the requirements and prevalent conditions, the government keeps modifying PMRY for the benefit of the intended beneficiaries. You will need to stay updated with all the recent developments in the scheme if you wish to apply for the assistance provided. You can reach out to the experts at FlexiLoans to stay updated and understand the technicalities of this incredible scheme.
About FlexiLoans
At FlexiLoans, we understand the importance of financial assistance for fulfilling your dreams especially when it is hard to secure funding. Our flexible business loan solutions and simplified application process make it easy for you to start your MSME journey. We offer msme loan, term loan, business loans for women, and more. Visit our website to learn more about our loan terms and conditions, and take the next step towards self-reliance. Check out our business loan calculator, business loan interest rate, and business loan eligibility criteria.
Frequently Asked Questions
Q. 1 When was PMRY started?
Ans: PMRY, or Pradhan Mantri Rozgar Yojana, was set up by the Indian government on 15 August 1993. It was later launched on 2 October 1993 across the entire country.
Q. 2 When can I apply for the PMRY scheme?
Ans: You can apply for PMRY at any time during the year, although it is advisable to apply between the months of April and June. You can download the application form from the scheme’s online portal.
Q. 3 Can I avail of the benefits of PMRY in addition to other subsidies?
Ans: Unfortunately, you cannot apply for the PMRY scheme if you have already availed of any other government-sponsored subsidy or initiative.
Q. 4 Are there any processing charges for a PMRY loan?
Ans: No, there are no processing or hidden charges in a PMRY loan. However, lenders can charge a sum of margin anywhere between 5% to 16.25% of the total project cost.
Q. 5 What are the PMRY loan eligibility criteria?
Ans: The government has specified PMRY loan eligibility criteria to apply for financial assistance. A person aged between 18-35 who has cleared Class 8 (or metric pass) and has a gross total family income of less than INR 40,000 per month can apply for this scheme. Furthermore, such a person should have been a resident of the area from which they are applying for at least three years. However, there are certain exceptions provided for in the scheme’s guidelines on a case-by-case basis.
Q. 6 How does PMRY benefit the weaker sections of society?
Ans: This government scheme has specific reservation levels for women as well as the weaker sections of society. There is a 22.5% reservation for Scheduled Caste/Scheduled Tribes (SC/ST) and 27% for Other Backward Classes (OBCs).
If, in any particular instance, SC/ST/OBC candidates are not available, the state government has the autonomy to consider candidates from other categories.
Q. 7 What are the prerequisites before commencing a project under PMRY?
Ans: Before starting a project under this scheme, you will have to:
- Deposit the margin money with the bank
- Seek permission from the applicable local body (municipality or the panchayat)
- Deposit the applicable collateral security
- Seek clearance from the Pollution Control Board for your enterprise, if required
- Apply for necessary tax registrations like Goods and Service Tax (GST) and income tax
- Check if you need other business registrations like MSME registration, and Shops and Establishment Certificates
- Register with a District Industries Centre (DIC) to avail of state government incentives.
Q.8 Since its introduction, what changes has the government made to Pradhan Mantri Rozgar Yojana?
Ans: Here are some of the amendments the government has made to this scheme:
- The upper age limit for applicants from the northeastern states of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, and Sikkim is now 40 years.
- The minimum education qualification requirement has been brought down from Class 10 to Class 8.
- The higher limit for the cost of a project is now INR 2 lakhs, which was previously INR 1 lakh.
- The government has revised the PMRY loan limits over the years.
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