A Complete Guide To Pradhan Mantri Rojgar Yojana (PMRY)
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13 June 2022
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13 June 2022India is a developing country that is making great strides in economic development. However, unemployment is still a significant concern that ails the country. In 1993, the Central Government launched the Pradhan Mantri Rojgar Yojana (PMRY) to provide gainful employment to unemployed individuals. The scheme helps educated, unemployed youth access financial assistance and become gainfully employed. Read on to get a detailed insight into Pradhan Mantri Rojgar Yojana.
Table of contents
What is PMRY?
The PMRY full form is Pradhan Mantri Rojgar Yojana. This scheme provides subsidized loans to educated but unemployed individuals. Through the PMRY, borrowers can get a loan of the desired capital to start their businesses and become self-employed.
Why was PMRY Implemented?
Prime Minister Rojgar Yojana (PMRY) was implemented primarily to address the growing unemployment in India. With the funding offered by the scheme, unemployed youths can potentially set up small businesses and contribute positively to the economy. New business ventures also add to the country’s GDP (Gross Domestic Product) and help generate new opportunities for employment for others.
Thus, with the PM Rojgar Yojana, the Government aimed to tackle unemployment, supercharge the GDP, empower the youth, and boost the job prospects of other unemployed individuals in the country.
Features of Prime Minister Rojgar Yojana (PMRY)
Here are some of the prominent features of the PM Rojgar Yojana:
- The PMRY scheme provides funds for all types of business activities that are economically viable. Agricultural and allied activities are also covered, barring direct planting and cultivation of crops.
- The PMRY loan limit is Rs.1 lakh for enterprises in the business sector and up to Rs.2 lakh for the non-business sector.
- A composite loan of up to Rs.95,000 (for enterprises in the business sector) or Rs.1.9 lakh (for the non-business sector) can be availed under the scheme.
- Banks offering the loan require a margin ranging from 5% to 16.25%. For the North-Eastern States, the margin of money ranges from 5% to 12.5%.
- The total subsidy and the margin should not be more than 20% of the project’s cost.
- A subsidy of up to 15% is available under Prime Minister Rojgar Yojana’s scheme. However, the maximum subsidy is limited to Rs.7500 per borrower (except in the North-Eastern States where the amount is Rs.15,000).
- Collateral-free loans are available for up to Rs.1 lakh for business and service sectors and up to Rs.2 lakh for industrial sectors. However, the borrower would have to give a personal guarantee for loan repayment. Moreover, any asset bought or created using the loan would be hypothecated (pledged as security) to the bank.
- The repayment tenure ranges between three years and seven years.
- There are no processing charges under Prime Minister Rojgar Yojana.
Eligibility Criteria for Prime Minister Rojgar Yojana (PMRY)
Not everyone can avail of a loan through the Prime Minister Rojgar Yojana scheme. The scheme is open to borrowers who fulfil the specified eligibility criteria. These criteria include the following:
| Age limit | The borrower should be aged between 18 years and 35 years. For the North-Eastern States, the age limit is 18 to 40 years. In the case of physically handicapped individuals, women, ex-servicemen and borrowers belonging to the Scheduled Caste or Scheduled Tribe, the maximum age is 45 years. |
| Educational qualification | The borrower should be at least a Class 8 graduate. Borrowers who have received training in any trade from any Government or approved institution for at least 6 months would be given preference. |
| Income limit | The total income of the borrower, including the spouse, should not be more than Rs.40,000 p.a.If the borrower is unmarried, the total income of the parents should not be more than Rs.40,000 p.a. |
| Residency status | The borrower should be a resident of the area for a minimum of 3 years where they want to start the venture. The rule, however, does not apply to newly married women. In such cases, the residency criterion would apply to their husbands or in-laws. |
| Other criteria | The applicant should not be a loan defaulter. Only one member per family can apply for the PMRY scheme. The applicant should not have availed of any subsidy-linked scheme earlier. |
Documents Required to Avail of a Loan Through PMRY Scheme
The following set of documents would be required when you apply for the Prime Minister Rojgar Yojana (PMRY) scheme to avail of a subsidised loan –
- Age proof like your birth certificate, SSC certificate, etc.
- Ration card to act as proof of residency. If the Ration Card is unavailable, a Residency Certificate issued by the District Magistrate, Deputy Commissioner or any other State Government designated authority would be accepted.
- Income certificate that has been issued by the Mandal Revenue Officer (MRO)
- Certificates about your educational qualification.
- A profile of the proposed project that would be financed with the loan.
- Identity proof like Aadhaar card, PAN Card, passport, and driving license.
- Caste certificate issued by the Mandal Revenue Officer (MRO).
- Certificate of the Entrepreneurship Development Programme (EDP).
- An affidavit that a notary has signed.
- Any other document that the lender might require.
Also Read: Pradhan Mantri Awas Yojana (PMAY): Benefits, Features And More
How to Apply for a PMRY Subsidised Loan
Follow these steps to apply for a PMRY Loan:
Step 1: Prepare a complete report of the proposed project containing the details of the business and the amount of loan required.
Step 2: Visit the official website and download the PMRY form.
Step 3: Fill out the necessary details as given in the form.
Step 4: Submit the filled form along with the necessary documents at the local bank or DIC (District Industries Center), which are listed under the PMRY scheme.
Step 5: The lender (bank) would scrutinize the application and the project, and if found satisfactory, the candidates would be contacted by the bank within a week.
PMRY: Things to Remember
Here are some essential things that you should know about the Prime Minister Rojgar Yojana loan before you apply for it:
- A training certificate is a must – a loan would be sanctioned only on the basis of training.
- You can avail of a moratorium period before starting the loan repayment. The moratorium period is when you don’t have to repay the loan. This period helps you establish your business and get it running. The moratorium period is worked out mutually between the borrower and the bank.
- In the case of default, the bank can take penal measures to recover the loan.
- You can repay the loan before the chosen repayment tenure. However, this facility is allowed only after three years. This means that the minimum loan repayment tenure has to be three years.
- You can also seek additional funds. However, the maximum loan would be limited to Rs.1 lakh or Rs.2 lakh, depending on the type of project.
Also Read: Pradhan Mantri Jan Arogya Yojana: PMJAY Scheme Features And Eligibility Criteria
Final Word
Pradhan Mantri Rojgar Yojana (PMRY) provides financial assistance to deserving youth who are unemployed. With the help of the subsidized loan, you can give wings to your venture, become productive and earn a living. Apply for a PMRY loan if you are eligible.
If, however, you are not eligible or if you require a simpler loan, you can opt for a Navi personal loan. Navi personal loans offer funds up to Rs.20 lakh that you can use to establish your business. With a simple process, online processing and quick issuance, Navi personal loans can give you the capital you need.
So, establish your business today and hone your entrepreneurial skills to become successful!
FAQs on PMRY
Ans: Yes, people living in urban areas can also apply for the PMRY loan. They should, however, fulfil the specified criteria.
Ans: The subsidy allows you interest-free loans. You don’t have to pay interest on the subsidized part of the loan. This reduces the interest cost and helps you pay off the loan affordably.
Ans: You can avail of a term loan and a working capital loan under the scheme.
Ans: No, the specified margin money would be needed as a down payment before the loan is sanctioned. You cannot get funding for the full cost of the project.
Ans: No, there are no hidden charges for the loan availed under Prime Minister Rojgar Yojana scheme.
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