The Pradhan Mantri Rozgar Yojana or Prime Minister Rozgar Yojana (PMRY) is an innovative incentive taken up by the central government to encourage micro-enterprises. It helps provide a means of earning to the unemployed youth of the country by putting their skills to use for the betterment of society.
Pradhan Mantri Rozgar Yojana is one such Central Government scheme that aids the youth to initiate start-ups, especially in the manufacturing, service and trade sectors. According to a government report, approximately 69.5 lakh individuals have enrolled in this scheme between 2018 and 2019.
It is a Central Government Scheme launched in 1993 intending to offer sustainable employment opportunities to over 1 million unemployed youths during the 8th Plan. With the help of this scheme, unemployed youth can opt for self-employment ventures and can choose a better livelihood.
Here is a glimpse of the important components of PMRY.
Features of the PMRY scheme
- Prime Minister Rozgar Yojana provides a boost to the unemployed yet educated citizens of India to start a micro-enterprise.
- The PMRY scheme helps unemployed citizens start an enterprise irrespective of where they are in the country.
- The scheme is launched by the central government and it covers all the eligible citizens of India irrespective of whether they are in rural or urban locations.
- The scheme is designed for the betterment of society as a whole rather than for a specific group of people.
- The scheme provides a business loan at low-interest rates.
- The scheme provides a moratorium for repayment.
- An eligible individual can avail a loan as follows:
- For a business enterprise – up to Rs. 2 lakh
- For a service enterprise – up to Rs. 5 lakh
- For industry sector – up to Rs. 5 lakh
Prime minister rozgar yojana aims to provide sustainable self-employment to 10 lakh educated yet unemployed youth of the country. The scheme was started in 1993 to help provide financial assistance for starting one’s own enterprise in manufacturing, services, or trade.
Under the PMRY scheme, a subsidiary provided by the government is limited to 15% of the undertaking cost. Furthermore, for a business entrepreneur, this is restricted to Rs.12,500 additionally. Moreover, for different regions of the country, this appropriation limit is different. Hence, it is advised that before applying for benefits under Prime Minister Rozgar Yojana, an applicant should check the region-specific features from the official website of the same.
Documents required for application to PMRY
- Proof of Identity
- Profile of the proposed project under which you are applying to the PMRY scheme
- Proof of the applicant’s qualification/education
- Details of or a copy of the applicant’s technical certificate
- Certificate of caste
- EDP training certificate
- Driver’s Licence
- Proof of degree qualification
- Date of Birth proof – 10th class mark sheet or birth certificate, either are acceptable
- Proof of residence for the last 3 years – Either Ration Card or Residency proof
- An Income certificate issued by the MRO
Project Cost details
Listed below are important conditions that an applicant for the PMRY scheme should understand:
- The applicant is eligible for a total loan amount of Rs. 2 lakhs. This includes working capital and term loan.
- For the business sector, the total loan amount will be restricted to Rs. 1 lakh.
- The loan amount includes any cost of location or premises where the enterprise will be set up. However, the applicant will need to prove that the premises to be taken on lease or purchased is essential for the enterprise.
- In case a microenterprise is set up in a leased location, the financing bank will ensure that the lease agreement is renewed at the end of the lease period for as long as the loan is repaid.
The eligibility conditions to apply for the PMRY scheme are as under:
- The age of the applicant should be between 18 and 35 years. However, SCs/STs and women applicants have a higher age ceiling of 45 years and those from North-eastern states get an age ceiling of 40 years.
- The applicant should not be a defaulter to any nationalized/cooperative bank or financial institution.
- Education qualification of 8th class pass is a must for the applicant.
- The total income of the applicant, including his/her family, should be less than Rs.40,000 per month.
- The applicant should have been a permanent resident of that area for the preceding 3 years.
- The applicant should be able to arrange for the margin amount of 15% of the loan amount. This margin amount will include the subsidy the government provides.
The Pradhan Mantri Rozgar Yojana enables the applicant to get a loan of Rs. 1 lakh without collateral; however, for a larger loan amount the applicant will need to provide collateral. While the collateral-free amount is expected to be sufficient to start an enterprise, the applicant can also approach banks/NBFCs for an additional loan under the PMRY scheme backed by some collateral to help grow the micro-enterprise.