If you have been thinking, “I don’t have the starting capital to launch my business,” here’s important news. The Maharashtra state government’s CMEGP scheme offers substantial subsidy support when you apply through a bank and set up your enterprise. It is not a full waiver of the loan but a credit-linked subsidy that can reduce your investment burden significantly.
This article explains how the scheme works in 2025, who qualifies, the subsidy rates, loan parts, and how you can apply.
What is CMEGP?
The CMEGP (Chief Minister’s Employment Generation Programme) is a scheme by the Government of Maharashtra to promote self-employment and entrepreneurship via micro & small enterprises in urban and rural areas.
It works on a credit-linked subsidy model: you set up a new unit, you take a bank loan, and a portion of the project cost is provided as a subsidy (margin money) by the government.
Key Figures and Facts for 2025
Maximum project cost: up to ₹50 lakh for the manufacturing sector; up to ₹20–₹50 lakh depending on scheme details for service/agro units.
Subsidy (margin money) rates:
- General Category: Urban 15 %, Rural 25 % (per some sources)
- Special Category (SC/ST/OBC/Women/Minority/Differently-abled): Urban 25%-35%, rural up to 35% or more.
Beneficiary’s own contribution: Often 5%‐10% of project cost for special category; 10% for general category.
Loan financing: The balance of the project cost (after subsidy and own contribution) is provided by a bank as a term loan.
Eligibility: Applicant must be a resident of Maharashtra, age 18-45 (relaxation for special category), have the educational qualification as specified, be only one per family, and have a new unit only.
How Much Subsidy Could You Get?
Suppose you plan a manufacturing unit costing ₹10 lakh in a rural area, and you are from a “Special Category” (e.g., woman entrepreneur / SC/ST). If the subsidy rate is 35%:
- Subsidy = 35 % of ₹10 lakh = ₹3.5 lakh
- Your own contribution might be 5% (₹50,000)
- Bank loan = ₹10 lakh − ₹3.5 lakh − ₹50,000 = ₹6 lakh (approx.)
This means you borrow less and repay less, making launch easier.
Note: The claim that the government “doesn’t make you repay the loan” is incorrect: you still repay the bank loan. The subsidy is only part of the cost.
Who Should Use This Scheme?
- First-time entrepreneurs in Maharashtra — urban or rural.
- Women, SC/ST, OBC, minority, and differently-abled candidates who may qualify for a higher subsidy.
- Those planning micro or small businesses in manufacturing, services, agro-processing, e-vehicles, etc.
- Individuals who have not previously availed similar subsidy schemes, and the unit must be new.
What are the steps to apply for CMEGP Scheme?
- Visit the official CMEGP portal and register.
- Prepare a project report for your proposed business – indicate sector, costs, etc.
- Upload required documents: Aadhaar, bank passbook, education proof, domicile certificate, and caste certificate if applicable.
- Submit the online form; the district-level body (DLSCC) reviews eligibility and forwards it to the bank.
- Attend EDP (Entrepreneur Development Programme) training if required.
- The bank sanctions the loan; the government subsidy (margin money) is routed through state agencies to the bank account.
- Set up your unit, commence operations, and repay your bank loan as per terms.
Important Points & Caveats
- The subsidy is not an immediate full rebate; it is a portion of the project cost and subject to conditions (the unit must run successfully, etc.).
- Only one member per family (including spouse) can apply.
- Existing units or those who have already availed government self-employment subsidies may not be eligible.
- While the scheme market limit is ₹50 lakh, practical loan/cost may differ.
- Make sure to verify the latest interest rates, bank terms and margin.
Why Some Instagram Reels’ Claims Were Slightly Misleading
The reel claimed that you “could borrow ₹10 lakh and get ₹3.5 lakh waived”. That aligns with the subsidy rate of ~35% in a special category rural case, but it glosses over the fact you still repay the balance loan. The government does not fully repay your loan. The subsidy reduces your cost. The rest becomes a bank loan you must service.
Conclusion
If you are based in Maharashtra and thinking of launching your own small business, the CMEGP is a powerful tool that reduces your financial burden substantially and supports entrepreneurship. But it is not a “free money” scheme; you must still invest, apply, run your business, and repay the bank loan. Understand eligibility, prepare documentation carefully, and move through the official portal.