Startups have been defined by the Indian Government as entities that are less than 7 years old, are headquartered in the country, and have an annual turnover of fewer than 250 million rupees. Government schemes for startups are a major factor that aids in the acceleration of such smaller-scale businesses, ultimately contributing to the collective growth of the Indian economy.
The necessity of startups to receive external aid for its growth cannot be stressed enough. Without external aid, startups cannot reach its full potential in this highly competitive global market. With unaided startups, the team tends to spend a lot of valuable time in determining the logistics, analytics, accounting, etc. Instead, if they could focus on business development and consumerism, it would have a more progressive outcome.
This is where government schemes for startups in India come in. They play a crucial role in formulating long-term goals and perspectives which will ensure the success and inverse development of the businesses. These specific schemes aim to provide funds, banking, accountancy, product description, overall development, legal backing, branding, design, launching, publicity, marketing, etc., thereby aiding them in getting their business running.
To establish this girth in the development of startups, over 50 government schemes have been introduced in India already. Here are our picks of the top 13 government schemes for startups to help you find your perfect fit:
1. Support for International Patent Protection In Electronics and Information Technology (SIP-EIT)
To know more about this scheme, log into https://www.ict-ipr.in
Headed by the Department of Electronics and Information Technology (DeitY), the SIP-EIT aims at:
- Providing financial aid to MSMEs and technology startups.
- Formulating international patent filings.
- Revitalizing the ethics of innovation.
- Acknowledging the capabilities of global IP.
- Seizing growth opportunities in ICTE sectors.
The refunding will be limited to 15lakhs INR or 50% of total expenses in filling out patent applications.
2. National Clean Energy Fund (NCEF) Refinance:
To know more about this government scheme, log into https://www.ireda.gov.in.
Headed by the Indian Renewable Energy Development Agency (IREDA), The NCEF aims at:
- Reviving the existing operations of small hydropower projects and biomass power by bringing down the cost of financing.
- This can be done by introducing refinancing at economic rates of interests.
- The funding is extracted from the NCEF.
The maximum refinancing amount is set to INP 15cr per project. Refinancing should not exceed 30%of the loan and is cited at 2% interest rate from IREDA to the respective banks and financial institutes.
3. Multiplier Grants Scheme (MGS)
To find out more about this government scheme, log into https://www.meity.gov.in.
Headed by the Department of Electronics and Information Technology (DeitY), MGS strives at:
- Initiating inter-organisational R&D collaborations between industries and education for better insight.
- Regulating development of products and packages through R&D institutions.
The government has made very specific announcements for the financial incentives associated with MGS. The individual industry should be limited at 2cr per project for a time period of 2 years. The collective industries should be limited at 4cr per project for a 3 year time period.
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4. Modified Special Incentive Package Scheme(M-SIPS)
To more about this government scheme, log into https://www.msips.in.
Headed by the Department of Electronics and Information Technology (DeitY), M-SIPS aims at:
- Spreading awareness about Intellectual Property Rights among various stakeholders in the E&IT sector.
- Supporting IPR workshops and seminars to spread awareness.
The Indian Government provides for a capital subsidy of 20% for SEZ units and 25% for non-SEZ units. It is centred around electronic manufacturing. Additionally, it provides for reimbursements for capital excise by non-SEZ units.
5. Performance and Credit Rating Scheme
To find out more about this government scheme, log into https://www.nsic.co.in.
Headed by the National Small Industries Corporation, the Performance and Credit Rating Scheme aims at:
- Elucidating on a SWOT analysis of small-scale industries.
- Legitimately formed under the Ministry of MSME along with leading stakeholders to boost business in small-scale industries.
If the ratings are 50lakhs, 25,000INR will be contributed. For turnover of 200lakhs, 30,000 INR will be contributed and for turnover of 400 lakhs, 40,000 INR will be contributed.
6. Raw Material Assistance
To find out more information about this government scheme, log into https://www.nsic.co.in.
Headed by the National Small Industries Corporation (NSIC), the Raw Material Assistance Scheme aims at:
- Assisting MSMEs by providing financial assistance.
- This financial assistance is provided for the purchase of necessary raw materials for production.
- The financial assistance provided to these MSMEs will allow these companies to focus on manufacturing.
The MSMEs will be aided by the government to undertake bulk purchase and cash discounts. Additionally, all documentation and call of action for the procedures will be taken care of. This is just to ensure that these MSMEs will solely focus on the production and manufacturing process.
7. Aspire- Scheme for promotion of Innovation, Entrepreneurship and Agro-Industry
To find out more about this government scheme, log into https://www.msme.gov.in.
Headed by the Steering Committee under the Ministry of MSME, Aspire aspires to:
- Set up technology and networking sectors, as well as incubation centres.
- These centres are to be set up by the Steering Committee to develop the spirit of entrepreneurship in the rural-agro based economy.
- Setting up of TBIs or Technology Business Incubators.
In order to support the 20 incubation centres that have been set up, a one-time grant of 50% of the Plant and Machinery will be provided. This equates to INR 30 lakhs, which is more than enough for the skilful orientation of these incubator centres.
8. Coir Udyami Yojana
To know more about this government scheme, log into https://www.coirservices.gov.in.
Headed by the Coir Board, the Coir UdyamiYojana strives to:
- Set up a choir programme project of worth INR 10 lakhs.
- Additionally, one cycle of working capital is to be provided for capital assistance by commercial banks and financial institutions. This cost should not exceed 25% of the entire project cost (INR 10 lakhs).
The commercial banks and financial institutions will aid with the capital requirements through term loans. As for the working capital, the banks will incur this amount with cash credit. Credit will be 55% of the entire project cost. This equation will be determined after slashing 40% of margin money as subsidy.
9. International Corporation(IC) Scheme
To know more in detail about this government scheme, log into https://www.msme.gov.in.
Headed by the Office of the Development Commissioner (MSME), IC’s major aim is to:
- Provide basic legal financial assistance.
- This financial assistance is to induce performance initiative of MSME companies by aiding them for travel and marketing in monetary perspectives.
- This is aimed towards the growth and development of MSMEs on a global platform. To promote this global initiative, this scheme provides financial assistance for exports and other international operations.
MSME gets a 100% economy class airfare benefit for all its export operations. The off bearer of the respective organisation gets an allowance of INR150 daily.
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10. Bank Credit Facilitation Scheme
To more in detail about this government scheme, log into https://www.nsic.co.in.
Headed by the National Small Industries Corporation, The Bank Credit Facilitation Scheme aims at:
- Meeting the credit expectations of the respective MSMEs without imposing any cost on the MSMEs.
- For this purpose, the government has signed up with various nationalised as well as private sector banks to provide these necessary funds.
The repayment time period is set at 5 to 7 years from the date and time of its application.
11. Udaan Training Programme for Unemployed Youth of J&K
To know more about this government scheme, log into https://www.msdegov.in/.
Headed by the National Skill Development Corporation (NSDC), Udaan aims at:
- Providing a training course for 5 years in sectors like software, BPO and Business Management. This is meant for J&K citizens specifically.
- It aims to train over 40,000 youth over the period of 5 years.
A sum of 750cr INR has been fixed for funding to these training sessions for a period of 5 years. This fund covers basic expenses of boarding, travel cost, travel, medical facilities, etc.
12. Loan for Rooftop Solar PV Power Projects
To know more about this government scheme, log into https://www.ireda.gov.in.
Headed by the Indian Renewable Energy Development Agency (IREDA), this government scheme for startups aims at:
- Supporting all solar energy PV related projects with physical and financial assistance.
The loan will be 70% of the total cost of the project with 30% of the promoter’s contribution. The minimum time for repayment will be 9 years. The maximum construction period is 12 months from the date of loan application.
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13. Dairy Entrepreneurship Development Scheme
To know more about this particular government scheme, log into https://www.nabard.org/.
Headed by the National for Agriculture and Rural Development (NABARD), this government scheme seeks to:
- Introducing structural changes in the process of production of milk.
- Altering the structure at the grassroot level itself.
- Bringing about commercialisation of milk production with advanced technology.
The benefits highly depend on the capital requirements for undertaking individual projects- technically starting at 25% of the total overlay and then building it up from when required.
India is progressively evolving into an ideal economy for nurturing a startup ecosystem, and is only third to UK and the USA in the global market for startups. These government schemes for startups will prove to be a strong ladder for any upcoming enterprise looking to successfully climb the startup market in India.
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Q. What are the benefits of choosing a govt. scheme over angel investments?
A. Both of these have different roles to play in the growth of any startup. Where schemes by govt. help in aggregating to the overall revenue generated and the services supplies, angel investors fund the primary capital needed by any given startup. In a nutshell, one shouldn’t compare the two on any scale of merits.
Q. How easy is it to avail these schemes? Given the process and formalities needed?
A. See the process is fairly transparent. One must comply with the prerequisites of availing these schemes and within a specified turn around time, the process is initiated seamlessly.
Q. How much fund can a startup avail from these government schemes for startups?
A. Depending upon the scale or size, there’s a broad slab of funds to avail from startup India scheme. For accurate information, please log in to https://www.startupindia.gov.in/