Government Scheme: Start Your Own Business with ₹25 Lakh Loan and 25% Free Money!

The Uttar Pradesh government is all set to supercharge its self-employment initiatives with a significant boost to the Mukhyamantri Swarojgar Yojana. In a major policy shift, the state will now offer interest-free loans up to ₹25 lakh to aspiring entrepreneurs under this scheme, a substantial rise from the earlier ₹5 lakh cap. What’s more, 25% of the project cost will be subsidized, meaning it won't need to be repaid if the business is successfully operated for two years.

New Push for Self-Employment

The move comes as part of the government’s broader goal to encourage youth to launch their own ventures. Following the immense success of the Mukhyamantri Yuva Udyami Yojana, where young entrepreneurs can get interest-free loans up to ₹5 lakh, the government is now extending similar benefits under the Mukhyamantri Swarojgar Yojana.

With over 50,000 applications already submitted in the first month of this financial year under the Yuva Udyami Yojana, demand is skyrocketing. Recognizing this, the government plans to upgrade the Swarojgar Yojana so that youth can start larger-scale businesses with better financial backing.

Loan Limit Increased to ₹25 Lakh

Previously, the Swarojgar Yojana offered loans at subsidized interest rates. Under the revised structure:

• Up to ₹25 lakh interest-free loans will be provided for projects in the industrial sector.

• For the service sector, loans of up to ₹10 lakh are available.

• Provisions are being made to quadruple the project size up to ₹1 crore in some cases.

This expansion is aimed at supporting small and medium-sized entrepreneurs across the state.

25% Margin Money Will Be Subsidized

A standout feature of the scheme is the 25% margin money that the government contributes:

• In the industrial sector, this amounts to ₹6.25 lakh.

• In the service sector, it's ₹2.50 lakh.

If the business runs successfully for two years, this amount will be converted into a subsidy—which means the entrepreneur won’t have to repay it.

Applicant’s Contribution

To be eligible for a loan under the scheme:

• General category applicants must contribute 10% of the project cost.

• SC/ST, OBC, minorities, and women need to put in only 5%.

This structure significantly lowers the entry barrier for marginalized groups, promoting inclusive entrepreneurship.

Who Can Apply?

To be eligible under the Mukhyamantri Swarojgar Yojana:

• Applicants must be 18 to 40 years old.

• Must be residents of Uttar Pradesh.

• Must have at least passed Class 10.

• Should not be a bank defaulter.

A Proven Scheme with a Strong Track Record

The Mukhyamantri Swarojgar Yojana has already proved beneficial. In the 2018–19 financial year alone, 2.5 lakh youth were employed through this program. Over 31,300 applications were approved, and ₹758.97 crore was distributed as margin money.

What's Next?

With the planned upgrades, the scheme is expected to reach more beneficiaries and make a bigger impact. Whether it's starting a tea shop or a tattoo studio, the 762 business activities listed under the Yuva Udyami Yojana will now also benefit from zero-interest financing under the Swarojgar Yojana.

Final Words

This development is a game-changer for aspiring entrepreneurs in Uttar Pradesh. The state government’s decision to offer up to ₹25 lakh in interest-free loans, along with 25% project cost subsidy, is a strong step toward economic self-reliance and job creation. Eligible youth should take advantage of this golden opportunity to turn their business dreams into reality.