Government Schemes For Startups in India: The current decade would likely go down in history as the decade of entrepreneurship in India. The country is amid a startup boom, and things seem exceedingly favorable for entrepreneurs.
As per records, the scale and magnitude of startups in India are the highest they’ve ever been, making the country one of the fastest-growing startup ecosystems in the world.
The Indian government’s constant backing of startups by providing them with incentives has aided this growth.
Over the last few years, they’ve rolled out various schemes dedicated to supporting startups. The goal behind these schemes and funds has been to create an environment where ventures can thrive.
So, if you’re a budding entrepreneur in India looking to start a business, you must know about these government schemes for startups. In this article, we’ll discuss the top schemes for startups in India and their benefits.
Top 10 Government Schemes for Startups in India
The top 10 government schemes for Startups in
1. Startup India Initiative
The Startup India Initiative is, by far, the largest government scheme for startups in India. Started by Prime Minister Narendra Modi in 2016, over 50,000 businesses come under this scheme.
It has an extensive collection of ebooks, courses, and mentorship programs to promote leadership and skills. Critical benefits of this scheme include:
- Tax exemption
- Cost reduction
- Easy business wind-up option in 90 days.
- Access to funds
- Self-certification under labor and environmental laws
- Fast-track patent registration with an 80% fee rebate.
Here’s the eligibility for this government scheme.
- The startup should be a registered partnership firm, private limited company, or LLP.
- Turnover shouldn’t exceed 100 crores in any of the previous financial years.
- The startup must apply within ten years from the date of formation.
2. Startup India Seed Fund Scheme
The Startup India Seed Fund Scheme (SISFS) provides financial assistance to early-stage startups for market entry, product trials, commercialization, prototype development, and proof of concept.
The government has allocated a total budget of 945 crores to this scheme. It expects to provide funds to 3600 startups. Grants of up to 20 lakh rupees will be provided for developing trials or prototypes. This scheme also aims to enhance the innovation culture and development in the country.
Here’s the eligibility criterion for this government scheme for startups.
- The startup must be recognized by DPIIT.
- The product or idea must be scalable, innovative, tech-based, and feasible.
- Indian promoters must hold shares equal to or more than 51%.
- The startup must apply within two years of its incorporation for this scheme.
The USP of this government scheme is that it’s industry agnostic and doesn’t require physical incubation.
3. Pradhan Mantri Mudhra Yojna
PMMY is a scheme for startups and MSMEs that aims to provide access to capital and loans to help ventures sustain and grow their business. Launched in 2015, eligible applicants can claim loans of up to 10 lakhs for working capital requirements. The repayment period for loans availed under this scheme is five to seven years.
There are three categories under which loan gets provided in PMMY:
- Shishu – Up to 50,000
- Kishor -Up to 5 Lakhs
- Tarun – Between 5-10 Lakhs
Startups must be involved in trading, manufacturing, services, or any other non-farm business to be eligible for this scheme.
4. Atal Innovation Mission
This scheme belongs to a category of government schemes for startups with a mandate to promote entrepreneurship and innovation countrywide. The core focus of this scheme is on tier-2 and tier-3 cities.
Also known as AIM, this scheme provides a platform for promoting world-class innovation hubs, sectoral focus, grand challenges, and talent initiatives. Some key programs under this scheme are innovation centers, Atal tinkering labs, community incubation centers, and innovation centers.
Besides providing financial support and resources to startups, the scheme offers easy access to information and resources.
5. Credit Guarantee Trust Fund
The Credit Guarantee Trust Fund For Micro & Small Enterprises (CGTMSE) provides collateral-free loans for MSMEs and selected startups. The amount of these loans can range up to INR 1 crore. It helps retailers, self-help groups, educational institutes, SMEs, and farmers.
This scheme facilitates the flow of credit in the startup sector and strengthens the credit delivery system. The CGTMSE is primarily for service and manufacturing businesses. Loans under this scheme can be claimed as working capital or term loan.
6. Venture Capital Assistance Scheme
It is one of the most sought-after government schemes for startups in the agricultural sector. Under this scheme, entrepreneurs can receive interest-free debt and OD. It allows them to cover up their working capital.
The core focus of this scheme is on the development of the Agro-industry. A fund of INR 10,000 crores was fixed by the government under this scheme. This fund provides INR 2500 crore as interest-free debt financing to small and marginal farmers.
The benefits of this scheme include:
- Overdraft facility and term loan
- Facilitate Agri-based venture setup
- Longer repayment period of up to 5 years.
- Helps startups set up an Agro business by arranging meets, visits, and training.
- Interest-free debt financing from financial institutes.
7. The Standup India Scheme
This scheme is one of the few government schemes for startups that encourage entrepreneurship among scheduled tribes (STs), scheduled castes (SCs), and women by offering financial help as loans.
The SIC, launched by the Prime Minister in 2016, aims to promote employment generation for backward castes and women and entrepreneurial spirit in this section.
Banks will provide loans of up to INR 1 crore to at least one SC or ST borrower and a woman borrower. There’s a flexible loan repayment time of seven years under this scheme. However, only first-time entrepreneurs can apply for this scheme.
8. Design Clinic Scheme
The government of India wants every startup and MSME to build a design-centric approach for fueling their business. In order to boost experimentation with new designs, the MSME Ministry established this scheme.
It aims to encourage an ecosystem of sustainable design through ongoing skill development and training. The government shall extend up to INR 60,000 for attending design seminars and up to INR 3.75 lakhs to the startup for conducting the seminar under this scheme.
The hope behind this scheme is that entrepreneurs would learn the latest trends and practices about designs and network with like-minded individuals.
9. Raw Material Assistance Scheme
This government scheme for startups in India was launched by National Small Industries Corporation (NSIC). It aims to assist manufacturers and startups with procuring raw materials. Under this scheme, applicants can claim low-interest loans and financial help to get raw materials.
10. Single Point Registration Scheme
This government startup scheme offers a single-window system for filing tenders to startups and MSMEs. It is administered by the National Small Industries Corporation.
The goal of this scheme is to ease restrictions for startups applying for government tenders. SRPS reduces the time, cost, and requirements with participation in government tenders. However, it’s essential that the startup shouldn’t have completed a year of incorporation if they want to apply for this scheme.
Benefits of Startups Government Schemes in India
While each startup government scheme in India comes with its pros, there are some benefits that they share. Here are the key benefits of government startup schemes in India.
- Financial assistance
- Facilitate funding
- Provide collateral-free loans
- Offer mentorship
- Tax exemptions
- Networking opportunities
- Easy access to vital resources
FAQs on List of Government Schemes in India
The frequently asked questions on Government Schemes in India are given below:
What are the government schemes for startups in India?
The Startup India Seed Fund Scheme and the Startup India initiative are two of the biggest government schemes for startups in India. Other schemes include the Pradhan Mantri Mudhra Yojna, Standup India Scheme, and Venture Capital Assistance Scheme.
How can I get government funding for startups in India?
There are many government schemes for startups that you can apply for to get funding. One of the best schemes for startups seeking funds is the Startup India Seed Fund Scheme.
How Indian government is helping the Indian startups?
The Indian government actively supports entrepreneurs and startups by launching many programs and initiatives. They provide financial assistance, technical assistance, and subsidies, among other facilities, to startups through numerous schemes.
Who are eligible for the startup India scheme?
In order to be eligible for the Startup India scheme, the startup should be a registered partnership firm, private limited company, or LLP. Besides, its turnover shouldn’t exceed 100 crores in previous financial years. The startup must also apply within ten years from the date of formation.
Do startups need GST?
Startups must register for GST. However, if the annual turnover of the startup is below INR 40 lakhs, they are exempt from GST registration.
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