To create opportunities of employment, the Indian government started the Pradhan Mantri Rozgar Yojana (PMRY) in 1993. Through the scheme, the government aimed to encourage self-employment among those who have the qualifications as well as the ability of starting their own business. For starting a business, among other things, a necessary requirement is to have enough funds, which works as a barrier for many people. PMRY caters to the fund requirements of these people.
The government provides financial assistance through PMRY scheme to deal with this barrier. Those seeking to start their ventures in areas like service, manufacturing and trade can avail financial assistance. For help in preparing applications and finding the opportunities, District Industry Centres, Directorates of Industries, NGOs, etc. can be contacted.
Important Aspects of PMRY Scheme
- The scheme is targeted at the age group 18 to 35 years. However, applicants from North-Eastern states receive some age relaxation and can make an application till the age of 40. Age relaxation is also available for women, SCs/STs and differently abled persons, and the upper age limit for them is 45 years.
- Banks prefer applications of those who have some training in specific areas. The basic training of 15 to 20 days to successfully set up the business can be provided as well. A certificate of completion of the training program may be asked by the banks to approve loan under PMRY.
- In an attempt to ensure OBC and SC/ST representation, the provision of reservation of 22.5% for SC/ST applicants and 27% for OBCs has been made in the scheme.
- The benefit under PMRY scheme is provided for all economic activities.
- Depending on the project, the loan amount differs. A higher loan amount can be approved in cases of joint initiatives. Banks may consider sanctioning up to 10 lakh rupees for group projects.
- Under the PMRY scheme, there is provision for giving subsidy. The subsidy can be 15% of the project cost, capped at the maximum subsidy amount of 15,000 for North-Eastern states, Himachal Pradesh, Uttarakhand and Jammu and Kashmir. For all the other states, each beneficiary is eligible for a maximum subsidy of 12500.
- Beneficiaries of the scheme do not have to start the repayment of the loan instantly. Banks may provide some relief by providing moratorium for a certain period. Assessment of this requirement is done and banks accordingly decide this period.
- The repayment of the loan can be done in equated monthly instalments (EMIs). Banks usually give 3 to 7 years of time for repayment.
Applications for getting the benefits of PMRY scheme can be made online. To access the official website of PMRY, you can use the following link: www.pmrpy.gov.in
- On the official website of PMRY, loan seekers have to first register themselves. An application form available on the website need to be duly filled by the applicant.
- Along with the necessary documents, this form is submitted to the concerned bank.
- At their end, banks review the submitted application and intimate the applicants accordingly.
- For accepting applications, banks ask for a number of documents. The general documents required include documents for identity proof, date of birth proof, and income certificate.
- Additionally, applicants are required to provide proof of residence for 3 years. This residence proof has to be of the area the applicant is applying the loan from.
- To claim reservations, caste certificate has to be attached with the application.
- Banks also ask for training completion certificate that is provided to applicants for setting up businesses.
Eligibility Criteria for the Loan
Before applying for the loan, it is important to understand the eligibility requirements. Listed below are the key criteria that most lender consider.
- Income: Only those with a family income of less than 1,00,000 are considered eligible for loan under PMRY. All those with a family income of more than this prescribed limit cannot avail benefits of PMRY
- Default on the loan payment: Loan defaulters are not considered eligible for the loan.
- Age limit: The general age limit to be eligible for the loan is 18 to 35 years. However, in some cases, age relaxation is provided.
- Residence: To qualify for the loan, the applicant must be a permanent resident of the area for a minimum of 3 years from where the application is being made.
- Educational qualification: Applicants need to be at least 8th standard pass to be eligible for PMRY loan.
If you do not meet the eligibility criteria of PMRY, loan against property or LAP can be an alternative for you. LAP money does not come with any restriction. You can use the money to start a business. LAP can also be considered if you require extra money for your business.
In the overall implementation of the PMRY scheme, District Industry Centres, Directorates of Industries, NGOs, etc. have a vital role to play in the preparation and processing of applications. PMRY scheme functions as an enabler for self-employment opportunities. Using the loan offered under the scheme, various businesses can be started and employment opportunities can be created.