Government Loan Scheme For Unemployed Youth

Prime Minister Rozgar Yojana is an initiative of Govt. of India for the educated unemployed youth of the country. Self-employment in rural and small towns in India is considered as the best means to solve the growing unemployment problem.

The main objective of the scheme is to provide easy subsidized financial assistance to educated unemployed youth for starting their own enterprises in manufacturing, business & service and trade sectors. The scheme has been designed to provide employment to more than a million Person by setting up of 7 lakhs micro enterprises by the educated unemployed youth.

Related: Top 20 Best Agricultural Loan Providers In India

Eligibility Of The Scheme For Unemployed Youth

  • For all educated unemployed between the age group of 18-40 years, in general, with 10 years, relaxation for SC/STs, ex-servicemen, physically handicapped and women.
  • Matric (Passed or Failed) or ITI passed or having undergone a Govt. sponsored technical course for a minimum duration of 6 months.
  • Neither the income of the beneficiary along with the spouse nor the income of parents of the beneficiaries shall exceed Rs.40000 pa
  • Permanent resident of the area for at least 3 years.
  • Should not be a defaulter to any nationalized bank / financial institution/cooperative bank. Further, a person already assisted under other subsidy linked government schemes would not be eligible under this scheme.

Related: Top 6 Women Entrepreneur Loan Schemes In India

Features Of The Scheme For Unemployed Youth

  • All economically viable activities including agriculture and allied activities but excluding direct agricultural operations like raising crop, purchase of manure etc.
  • Rs.1.00 lakh for the business sector. Rs. 2.00 lakhs for other activities. Loan to be of composite nature. If two or more eligible persons join together in a partnership, the project can cover up to Rs.10.00 lakhs. Assistance shall be limited to individual admissibility.
  • The subsidy is limited to 15% of the project cost subject to a ceiling of Rs.7,500/- per entrepreneur. Banks can take margin money from the entrepreneur varying from 5% to 16.25% of the project costs as to make the total of the subsidy and the margin money equal to 20% of the project cost.
  • No collateral for the project up to Rs.1 lakh. Additionally, you can avail an exemption from collateral in case of partnership project. However, it is limited to an amount of Rs.1 lakh per person participating in the project.
  • Additionally, you will need to pay the normal bank rate of interest. Repayment schedule may range between 3 to 7 years after an initial moratorium as may be prescribed.
  • Also, you can avail the training expenses and operational expenditure by the ceiling of Rs.2,000 per case. The existing system of revising the scale of expenditure in consultation with the Finance for various activities and flexibility would be available to the implementing agencies of the state and central levels subjects to a condition that overall training and operating expenses remain within the ceiling of Rs.2,000/- per case sanctioned.

How To Avail The Scheme For Unemployed Youth

  • The District Industries Centres and the Directorate of Industries shall mainly be responsible for scheme implementation along with banks
  • Basic minimum targets based on the population and the number of educated unemployed, Additional targets would be linked to the recovery of loans sanctioned, past performance of sanctions or special circumstances prevailing in the state/UT.
  • The scheme has the preference to weaker sections including women. The scheme envisages 22.5% reservation for SC/ST and 27% for other Backward class (OBCs). In case SC/ST/OBC candidates are not available, States/UTs Government will be competent to consider other categories of candidates under PMRY.