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Prime Minister's Rozgar Yojana (PMRY) – UPSC Notes

PMRY was launched in 1993 by the Ministry of Skill Development and Entrepreneurship to generate self-employment opportunities for educated unemployed
Amith
Estimated read time: 2 min

Prime Minister's Rozgar Yojana (PMRY)

Introduction

The Prime Minister’s Rozgar Yojana (PMRY) was launched in 1993 by the Ministry of Skill Development and Entrepreneurship to generate self-employment opportunities for educated unemployed youth in India. The scheme aimed to provide financial assistance to set up micro-enterprises in the manufacturing, service, and trade sectors.


Objectives of PMRY

  • Promote Self-Employment – Encourage unemployed youth to become entrepreneurs.
  • Support Small Businesses – Provide financial support for small-scale industries.
  • Skill Development – Train youth in business management and entrepreneurship.
  • Reduce Unemployment – Generate employment by assisting new businesses.

Eligibility Criteria

  • Age Limit:
    • 18 to 35 years (for general category).
    • 18 to 45 years (for SC/ST, women, and physically disabled persons).
  • Educational Qualification:
    • Minimum 8th standard pass.
  • Family Income Limit:
    • Combined income of the applicant and parents should not exceed ₹1 lakh per annum.
  • Residency Requirement:
    • Must have been a resident of the area for at least 3 years.
  • Loan Limit:
    • Maximum loan of ₹2 lakh for business and ₹5 lakh for industry-related projects.

Key Features of PMRY

  • Collateral-Free Loans – Loans up to ₹1 lakh did not require collateral security.
  • Subsidy & Margin Money:
    • The government provided a subsidy of 15% of the project cost, subject to a maximum of ₹7,500.
  • Training & Skill Development:
    • Beneficiaries underwent business training for 15–20 days before receiving funds.
  • Loan Repayment Period:
    • Loans had to be repaid within 3 to 7 years with a moratorium period of 6–18 months.

Sectors Covered under PMRY

  • Manufacturing – Small-scale production units.
  • Service Sector – IT, tourism, repair shops, etc.
  • Trade Sector – Small shops, retail businesses.

Achievements of PMRY

  • More than 3.5 million entrepreneurs benefited from the scheme since its inception.
  • It contributed significantly to the growth of micro-enterprises in rural and urban areas.
  • Encouraged women entrepreneurs by providing loans and training.

Challenges & Issues

  • Loan Repayment Problems – High rates of Non-Performing Assets (NPAs) due to difficulty in repayment.
  • Lack of Awareness – Many eligible candidates were unaware of the scheme’s benefits.
  • Limited Impact on Employment – The scheme did not create jobs on a large scale as expected.
  • Bureaucratic Delays – Lengthy paperwork and approvals slowed down loan disbursement.

Discontinuation & Successor Schemes

  • The PMRY scheme was discontinued in 2007 due to its limited impact and high NPA levels.
  • It was replaced by the Prime Minister's Employment Generation Programme (PMEGP) in 2008, which offered better financial support and broader coverage.

Way Forward

  • Stronger Financial Literacy Programs – Teach entrepreneurs about financial management and loan repayment.
  • Simplified Loan Processes – Reduce bureaucratic hurdles to make loan access easier.
  • Better Skill Development – Integrate modern training programs with digital skills and marketing techniques.

Conclusion

The Prime Minister’s Rozgar Yojana (PMRY) played a crucial role in promoting self-employment and entrepreneurship among India’s youth. Although it faced challenges, it set the foundation for future employment generation schemes like PMEGP and Mudra Yojana. Proper implementation and financial discipline are essential for such initiatives to create long-term employment and economic growth.

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