PMRY Loan Scheme is a government initiative in India aimed at providing self-employment opportunities to educated unemployed youth by offering financial assistance to start their own small businesses.

Unemployment is a major issue for educated young people in India, leading to frustration and low productivity. Small businesses, like village shops and home-based ventures, offer a solution by providing self-employment opportunities. Starting these businesses with moderate funds can create jobs for 4 to 5 people, bringing satisfaction, increasing national income, and helping unemployed individuals positively.

On August 15, 1993, the Hon’ble Prime Minister of India announced a new scheme called the PMRY Loan Scheme (PMRY-Prime Minister’s Rozgar Yojana)

Goal of PMRY Loan Scheme (PRIME MINISTER ROJGAR YOJNA LOAN SCHME)

The main goal of the PMRY scheme was to give easy, subsidized financial help to educated unemployed youth to start their own businesses in manufacturing, business, service, and trade sectors.

Main Features PMRY Scheme –

This scheme is funded and supported by the central government.

The Development Commissioner (Small-Scale Industries) under the Ministry of Small Scale, Rural, and Agro Industries, Government of India, is the main authority for this scheme.

At the state level, the scheme is implemented by the respective Commissioner or Director of Industries, except in the four metropolitan cities. The Secretaries of Industries oversee its progress overall.

Eligibility Criteria and Scheme Details –

AGE

– Open to all educated unemployed individuals aged 18-40 years.

– SC/STs, ex-servicemen, physically handicapped individuals, and women have a 10-year age relaxation.

Educational Qualification:

– Must have passed 8th grade & Preference for those trained in any trade at government-recognized/approved institutions for at least six months.

Family Income –

– The combined income of the beneficiary, their spouse, and parents must not exceed Rs. 40,000 per year.

Residence –

– Must be a permanent resident of the area for at least 3 years.

Defaulter –

– Should not have defaulted on any loans from nationalized banks, financial institutions, or cooperative banks.

– Not eligible if already assisted under other government subsidy-linked schemes.

Activities Covered –

All economically viable activities, including agriculture and related activities, except direct agricultural operations like raising crops or purchasing manure.

Project Cost –

– Up to Rs. 1 lakh for business sector projects.

– Up to Rs. 2 lakhs for other activities.

– For partnerships, projects up to Rs. 10 lakhs are covered, with assistance limited to individual eligibility.

Subsidy and Margin Money –

– Subsidy is 15% of the project cost, with a maximum of Rs. 7,500 per entrepreneur.

– Banks can require margin money from the entrepreneur ranging from 5% to 16.25% of the project cost, so the total of subsidy and margin money equals 20% of the project cost.

Collateral –

– No collateral required for projects up to Rs. 1 lakh.

– For partnership projects, collateral exemption applies up to Rs. 1 lakh per person.

Rate of Interest and Repayment Schedule –

– Normal bank interest rates apply.

– Repayment schedule ranges from 3 to 7 years, with an initial grace period as prescribed.

Training and Other Assistance –

– Training and operational expenses covered up to Rs. 2,000 per case.

– Flexibility for implementing agencies to revise expenditure within the Rs. 2,000 limit per case.

Implementing Agency –

– The scheme is mainly implemented by the District Industries Centres and the Directorate of Industries, in collaboration with banks.

Linkages of Targets with Recovery –

– Basic minimum targets based on population and number of educated unemployed.

– Additional targets linked to loan recovery rates, past sanction performance, or special circumstances in the state/UT.

Reservation –

– Preference for weaker sections, including women.

– 22.5% reservation for SC/STs and 27% for OBCs.

– If SC/ST/OBC candidates are unavailable, other categories may be considered.

How Scheme will Fulfilment/ Accomplishment

Fixing of Targets: –These yearly targets, set from April to March, are fixed by DCSSI (Development Commissioner for Small Scale Industries) based on factors like population, unemployment, and area backwardness. They are regularly monitored and may be revised based on loan recovery and annual performance.

Allocation of Targets by States: – The State Government distributes the state’s targets to all District Industries Centres (DIC) in the district where the scheme is active.

Allocation of financial targets to banks – Banks, along with District Industrial Centres (DICs), implement the PMRY scheme and sanction loans. The Reserve Bank of India’s RPCD informs lead banks in each state about allocated targets. These lead banks then instruct their district branches to disburse the funds as per the targets.

Calling for PMRY applications: – The District Industries Centre (DIC) and local banks invite people to apply for PMRY loans. Application forms are available at DICs, with local Industry Promotion Officers, and at local banks. The form is simple, asking for basic candidate details.

Constituting the Task Force Committee – The GM of DIC forms a task force with financing bankers and officials from agencies like SISI to interview and assess PMRY loan applicants based on their knowledge, aptitude, interest, and entrepreneurial qualities. Selected candidates are assigned to banks, informed, and directed to finalize their loans, completing the selection process.

Training for Selected Candidates: Under DCSSI guidelines, the GM of DIC arranges 7-20 days of training for all PMRY-selected candidates, providing materials, schedules, skilled faculty, and convenient centers to help them successfully start and run their enterprises.

Monitoring and Reviewing PMRY – The DCSSI checks how well the PMRY is working by getting monthly, quarterly, and yearly reports from each district, which are sent to the Commissioner of Industries, DCSSI, and RBI. Important officials hold meetings at the state and district levels to review progress and make improvements to ensure the scheme helps educated unemployed youth get jobs.

How to Apply for PMRY Loan

Prepare Project Report – To apply for a PMRY loan, candidates must fully understand their project idea and prepare a detailed project report, which includes all aspects of the proposed venture such as costs, production details, and profitability. Developmental agencies like SISI and DIC offer advice and prepared project profiles to assist PMRY beneficiaries.

PMRY supports loans for manufacturing, service, and business ventures. Prospective entrepreneurs must begin by preparing a project proposal. Factors to consider include:

1. Product marketability through market surveys
2. Availability and demand for raw materials
3. Infrastructure availability such as power, water, and government clearances
4. Technology and operational procedures for setting up the unit

Applying for PMRY Loan – After finalizing the project idea, applicants submit their forms with required documents and photos to DIC or local banks. Applications undergo thorough scrutiny, and selected candidates are interviewed at convenient district locations. For Loan Application Form Click here

Bank Clearance for the Project – After receiving the selection letter from the bank, applicants discuss project viability and necessary adjustments with the allotted banker before proceeding with project implementation.

Training – Selected applicants undergo training and receive certificates, which they must present to the bank for loan approval. DIC and bankers assist in project implementation and ensure its success.

Grounding of the unit: –  Before starting the project, applicants must complete necessary statutory formalities, i.e., Before starting the project, ensure to arrange margin money per PMRY Loan Scheme guidelines (5% to 16.25% of project cost), collateral security if needed for projects over Rs.1 lakh per person, local body permission, Pollution Control Board clearance if applicable, sales tax registration, DIC registration for state incentives, and other statutory clearances as required by law.

Repayment of Loan

After starting commercial production, the entrepreneur must repay the loan with interest as per the repayment schedule set by the banker, typically spanning 3 to 7 years with an initial moratorium period. Non-payment may lead to recovery actions by the bank, DIC, and authorities under the Revenue Recovery Act.

If you or someone you know is looking to start a small business or enterprise, it’s advisable to check the current government schemes available in your region or country, as they often vary by location and economic policies. PMRY Loan schemes typically provide financial assistance, training, and other support to help individuals establish and grow their businesses…

For You Tube Videos on PMRY Loan Scheme Click here

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