The Pradhan Mantri Rozgar Yojana or the Prime Minister’s Rozgar Yojana (PMRY), launched back in 1993, is a scheme sponsored by the Government of India.
The primary objective of this scheme is to provide subsidised financial assistance to educated and unemployed individuals and help them start their own business.
The original motive of Pradhan Mantri Rozgar Yojana was to establish 7 Lakh micro enterprises and provide self-employment to 10 Lakh unemployed youth by 1995. After successful implementation, the Government extended the scheme with certain amendments.
Highlights of Prime Minister’s Rozgar Yojana
- Implementing Organisation
- Development Commissioner (Small-Scale Industries) of the Ministry of Small Scale, Rural and Agro, Industries is the primary implementing authority of this scheme.
- Small Industries Service Institute (SISI) is the body for this scheme in Mumbai, Delhi, Chennai, and Kolkata.
- District Industries Centres (DICs) are the organisation at the grassroots level.
- Commissioner or Director of
Industries is the respective body at the state level (except for the 4
metropolitan cities mentioned above).
The Pradhan Mantri Rozgar Yojana provides 22.5% reservation to Scheduled Caste (SC) and Scheduled Tribe (ST) along with 27% reservation for Other Backward Class (OBC) individuals. This scheme also gives preference to economically weaker sections and women.
Selected beneficiaries under this scheme will receive training for 15 to 20 days with an additional hands-on working of 7 to 10 days in an enterprise.
Features Of Loans Under The Prime Minister’s Rozgar Yojana
- Interest Rates
Financial institutions will charge the standard rate of interest, which may differ based on the loan amount.
Individuals can opt for a secured loan for unemployed like a loan against property to avail lower interest rates. Borrowers can use a loan against property for a multitude of purposes.
Collateral is not required for loans up to Rs. 1 Lakh. The no collateral requirement clause is also valid for partnership businesses, where each individual is contributing not more than Rs. 1 Lakh.
- Loan amount
The maximum loan amount under the Pradhan Mantri Rozgar Yojana is Rs. 1 Lakh for businesses and Rs. 2 Lakh for other enterprises. The loan amount can go up to Rs. 10 Lakh if the project is a partnership headed by two or more beneficiaries.
The loan tenor ranges from 3 to 7 years. Borrowers will also be eligible for a moratorium period under the sole discretion of the lender before the tenor commences.
- Subsidy and Margin Money
The maximum subsidy per beneficiary is 15% but is limited to Rs. 7,500. Lenders are eligible to take margin money ranging from 5% to 16.25% of the project costs. The total margin and subsidy will be 20% of the project cost.
Eligibility Criteria For Loans Under The Prime Minister’s Rozgar Yojana
- Educational Qualification – Individuals who have passed the 8th standard are eligible for the Pradhan Mantri Rozgar Yojana.
The scheme will give more preference to those having training in any trade for at least 6 months from a government-approved or recognised institution.
- Age – Age limit for this scheme is between 18 and 40 years. A 10-year age relaxation is provided to women, physically handicapped individuals, ex-servicemen, and SC/STs.
- Residency – Individuals must be a resident of that area for a minimum of 3 years.
- Income – Income of the beneficiary, his/her spouse, or his/her family must not be more than Rs. 40,000 per annum.
Additionally, beneficiaries must not have availed any other subsidy-linked schemes or be a defaulter with any financial institution in India.
Those not eligible for loans under this scheme can opt for an alternate secured unemployed loan like loan against property. Individuals can qualify for a loan against property by meeting a few eligibility criteria.
Applying for the Prime Minister’s Rozgar Yojana
Applicants are required to submit the relevant form along with the required documents at the concerned financial institution. Selected applicants will be called for interviews; they will benefit from financing based on their performance.
Applying for a secured personal loan for
unemployed like loan against property is comparatively easier.
NBFCs like Bajaj Finserv offer these loans against a few documents and
They also bring pre-approved offers, which lower
the time taken to avail financing by making the process hassle-free.
Pre-approved offers are available on several financial products like personal
loans, home loans, business loans, and more.
Lastly, the Pradhan Mantri Rozgar Yojana also envisages that the DICs have been provided power to recover the loan amount along with interest by any means necessary if the borrower defaults.