KVIC Sparks Employment Boom with New Self-Employment Projects in Rural Areas

Khadi and Village Industries are generating employment opportunities in rural as well as urban areas of the country through the setting up of new self-employment ventures/projects/micro-enterprises in the non-farm sector. The purpose is to bring together widely dispersed traditional artisans, and rural and urban unemployed youth and give them self-employment opportunities to the extent possible, at their places, and in the process provide continuous and sustainable employment to a large segment of traditional and prospective artisans and rural and urban unemployed youth in the country.

According to Minister of State for Micro, Small and Medium Enterprises Shobha Karandlaje, this will help arrest migration of rural youth to urban areas to increase the wage-earning capacity of workers and artisans and contribute to an increase in the growth rate of rural and urban employment.

The Ministry of MSME, through the Khadi and Village Industries Commission (KVIC), is implementing the Prime Minister’s Employment Generation Programme (PMEGP). PMEGP being a Central Sector Scheme assists General Category beneficiaries with a Margin Money (MM) subsidy of 25% of the project cost in rural areas and 15% in urban areas.

For beneficiaries belonging to Special Categories such as Scheduled Castes, Scheduled Tribes, OBCs, Minorities, Women, Ex-servicemen, Physically Handicapped, Transgenders, beneficiaries belonging to Northeastern Region, Hill and Border areas, and Aspirational Districts, the Margin Money subsidy is 35% in rural areas and 25% in urban areas. The maximum cost of the project is Rs. 50 lakhs in the manufacturing sector and Rs. 20 lakhs in the service sector. Also, own contribution of beneficiaries under the Special Category is 05% and 10% for General Category beneficiaries.

Since 2018-19, existing PMEGP/REGP/MUDRA enterprises have also been supported based on past good performances with 2nd loan for upgradation and expansion. Under the second loan, the maximum project cost admissible for Margin Money (MM) subsidy under the Manufacturing sector is Rs. 1.00 crore and for the Service sector is Rs. 25 Lakhs. The eligible subsidy on a second loan for all categories is 15% of project cost (20% for NER & Hill States).

An official release quoting the minister said that another scheme, “Gramodyog Vikas Yojana (GVY)”, was meant for the promotion and development of village industries, through technological modernisation, training and other support and services for the promotion of village industries thereby creating Self Employment opportunities.

Key components include Wellness and Cosmetics, Handmade Paper and Leather, Agro-Based and Food Processing, Mineral-Based Industry, Rural Engineering, and Service Industry. In FY 2023-24, GVY spent ₹31.34 crore on training and toolkits, benefiting 16,355 artisans.

The release said that under the Prime Minister Employment Generation Programme (PMEGP), a Margin Money Subsidy to the tune of Rs.3093.88 crore has been disbursed assisting 89,118 micro-enterprises for providing estimated employment to 71,12,944 persons. Under Gramodyog Vikas Yojana, during FY 2023-24, an expenditure of Rs.31.34 crore was incurred on training/tool-kit distribution under various components/verticals of GVY, benefiting 16,355 artisans.

Several steps have been taken by the Government to reach and enhance the effectiveness of the KVI and PMEGP schemes across the country. The maximum project cost admissible has been enhanced from Rs. 25 Lakhs to Rs. 50 Lakhs for the Manufacturing sector and from Rs. 10 Lakhs to Rs. 20 Lakhs for the Service sector.

Applicants from aspirational districts and Transgenders have been included in Special Category. Besides, industries related to Animal Husbandry like dairy, poultry, aquaculture, and insects (bees, sericulture, etc.) have been allowed under the scheme. COVID years -- FY2020-21 and FY2021-22 -- have been exempted while considering the  profitability of existing PMEGP/REGP/MUDRA units applying for a second loan under PMEGP. No mandatory EDP is needed for project costs up to Rs. 2 lakh and a shorter period of training (up to 5 days) for projects up to Rs. 5 lakh.

Awareness camps, workshops and exhibitions at all levels are organised to create awareness about the scheme among the prospective entrepreneurs. Publicity of the PMEGP scheme is done through print and electronic media. KVIC has conducted training programmes during the FY 2023-24 and trained candidates under various trades such as Tailoring & Embroidery, Beautician, Bee Keeping and Fruit & Vegetables Processing and artisans from BPL category.

To promote the adoption of Modern Technologies/processes, specialised training programmes are held to nurture micro enterprises/self-employment at the rural level. Every year, targets under PMEGP are fixed based on past years' performance and overall budget allocation for the scheme. Budget Availability under the Margin Money component of PMEGP for FY 2024-25 is Rs. 2,250 crore (including Rs. 100 Crore for the second loan)

New activities like AC repairing, Mobile Repairing, Sewing Machines Operation & Popcorn making and training along with toolkits/machines have been included in the GVY scheme for the benefit of unemployed youths.