Prime minister employment generation programme: a tool to attain economic development through MSMEs in India

Purpose-This paper reviews and empirically analyses the performance of PMEGP in creating continuous and sustainable (self-) employment opportunities to a large segment of traditional and prospective artisans, rural and urban unemployed youth through micro-entrepreneurial activities. Design/methodology/approach - The paper empirically analyses the impact of PMEGP in creating employment opportunities in 6 different zones of the country for the period of 2009 through 2016. The study considers estimated employment opportunities created (EEOC) as dependent variable and number of units assisted (NOU) and Margin Money Subsidy Utilized (MMSU) as explanatory variables for analyzing their effect on EEOC; employing various statistical analysis including descriptive statistics, ordinary least square (OLS) regression, regression equation statistics and econometric analysis. Findings - The random effect model shows that the overall r-square is 0.77 and the f-statistics probability is zero indicating the model is the good fit. Thus, the result of the study reveals that NOU is significant determinant for generating employment opportunities whereas MMSU is insignificant. The paper concludes by giving recommendations for policy makers. Research limitations/implications - The paper studies the impact of the scheme at a macro level without considering enterprises on an individual basis and the micro-level problems such as inadequate response from banks, etc. Practical implications - The paper provides a tool to attain economic development through MSMEs in India. Originality/value - The study spreads across all the six zones of India and examines the contribution of PMEGP in creating employment opportunities, thereby achieving sustainable economic development.