Indian startups are expanding quickly, so government encouragement and backing are essential. The government has developed many policies to foster and promote young business people. These Indian govt schemes include grants and funds for financial support, tutoring, and other services that help entrepreneurs achieve their goals within one of the world’s fastest-expanding startup landscapes.

There is no legal definition of a startup; however, many scholars and institutions agree that the term can be defined as a newly formed business entity more inclined to innovation, scalability, and uniqueness of products and/or services offered. As we know, most startups have high costs at the initial stages and generate very little income.

Here are some of the Government of India Schemes and assistance for Startups, including Initiatives, Funds, and other programs. These assertions clearly demonstrate the government’s unwavering commitment to promoting the growth of startups and creating a propitious climate for business, providing a stable and supportive environment for your entrepreneurial journey.

Top 10 Indian Govt Schemes for Startups in India

Despite numerous government policies in India meant to support startups, the following are the top 10 most popular ones. These schemes have received much attention and focus within the entrepreneurial environment.

1. Startup India Initiative

The Prime Minister of India initiated the Startup India Initiative on January 16, 2016. The initiative offers several tax benefits for new ventures. Over the past five years, the scheme has accredited or recognized over 50,000 startups. In this context, this initiative aims to grow startup businesses through innovation and design interventions.

For an entity to enjoy the privileges of the Startup India Initiative, it must meet the eligibility criteria outlined on the official website. This initiative offers a long-term support structure, with the eligible period extended to 7 years, and for biotech firms, a generous 10 years from the date of incorporation. The real excitement lies in the numerous privileges and concessions it provides to budding entrepreneurs, fueling their motivation and drive to succeed.

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2. Stand up India scheme

About the schemes, the Stand-Up India Scheme has been designed explicitly for SC/ST and women entrepreneurs. From this group, applicants are offered loans from ₹10 lakh to ₹1 crore under this mission. The scheme ensures that at least one female in every branch of the selected bank is assisted in developing greenfield ventures. Such enterprises may be in manufacturing, service, or trading industries. In the case of any non-individual business entity, the woman, SC, or ST individual must have not less than fifty-one percent of the share.

3. Startup India seed fund

Many Indian startups have been confined to inadequate capital during their growth processes. This is a company’s focal point, and the absence of funds is destructive for the companies as they may be unable to build up models, conduct product tests, etc. With this objective in mind, the government of India has included a seed fund scheme in its Startup India scheme. A few criteria are mentioned: The startup applying should have DPIIT recognition and not be older than two years. A startup should have a business idea to create a product or a service in which people have demand, which generates revenue and can expand.

This Government scheme for startups is worth Rs.1,000 and was announced by the Prime Minister on January 16, 2021.

4. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

Other examples of schemes carried out by the government of India are the Credit Guarantee Funds Trust for Micro and Small Enterprise. It was launched on January 1, 2020, and has been functional since then. The scheme provides business loans from the micro level up to small industries and startups, where no collateral is demanded.

Indian startups can borrow money at very concessionary rates of interest without collateral. In collaboration with SIDBI, the government of India provides up to INR 100 lakhs under this scheme to create new startups and restore lost businesses.

This can be taken from working capital or term loans and is designed for manufacturing concerns.

5. Atal Innovation Mission (AIM)

AIM, or Atal Innovation Mission, is an apex government policy for startups set up by NITI Aayog to promote innovation and venture in the nation. This startup model incubates ideas for innovation and research from academicians and scholars and develops them in schools, universities, research institutions, industries, and MSMEs.

AIM has initiated Atal Tinker Labs and Atal Incubators to facilitate their objectives. The Atal Incubation Centers (AICs) are funded under this Indian government scheme for startups with a grant-in-aid of up to ₹10 crores for a maximum duration of no more than five years.

Some of the regional startup industries supported through financial and infrastructure are chemical startups, technology hardware, aeronautics, aerospace and defense, healthcare and life sciences, agriculture, Artificial intelligence, AR & VR, new automobile companies, construction, design, non-renewable and renewable energy, and telecommunication industries.

6. Software Technology Park (STP) Scheme

The Software Technology Park (STP) scheme is the only scheme for startups in India that is primarily export-oriented. This scheme can also be used to develop and export computer software. Exporting professional services through communications links or physical media also falls under this area.

One of the existing Government schemes for startups in India is exclusively in the sphere of computer software. This program amalgamates the government’s one hundred percent Export-Oriented Units, also known as Export Processing Zones, and the science Parks/Technology Parks concept operative worldwide.

The STP scheme allows for DTA sales up to 50% of the export value, and it offers total depreciation on capital assets for the first five years, providing significant financial benefits.

7. Ebiz Portal

The system under consideration, the eBiz portal, is India’s first Government-to-Business (G2B) portal. Infosys created it with the Department of Industrial Policy and Promotion (DIPP) to foster better relations between the government, commerce, and industries.

Primary Objectives of the eBiz Portal:

• Business-Friendly Environment: The portal has been designed to simplify various regulatory requirements, ensure clarity, and promote a better business environment in India.
• Ease of Doing Business: By interacting with government departments that can be obstacles to doing business, the eBiz portal tries to facilitate the business environment to increase domestic and foreign investments.
• Accountability and Responsiveness: It is also meant to enhance the responsibility and sensitivity of the various government departments.

Background and Goals:

Launched in 2013 as one of 27 mission-mode projects by the Indian government, eBiz has several key goals: 

• Creating an Investor-Friendly Environment
• This means that G2B services must be consolidated to have an integrated single-window system online.
• Reducing Bureaucracy
• The specific objective of the second type of intervention, concerned with standardizing the flow of information, is as follows:
• In this core competence, the company must demonstrate transparency and visibility.
• Savin on Costs through Self Distribution
• Offering a Single Portal for Accessing the Services
• Simplifying Compliance for Various Stakeholders, including entrepreneurs, industries, regulatory bodies, and financial institutions.

The services are being introduced gradually, with 50 services to be provided in the pilot and at least 200 services in ten years.

8. Dairy Processing and Infrastructure Development Fund (DIDF)

DIDF was launched in 2017-18 by the Government of India in partnership with the National Bank for Agriculture and Rural Development (NABARD) with a cumulative fund size of ₹8,004 crores.

This has encouraged the provision of subsidized loans at an interest rate of 6 percent for this kind of project. It reduced it by 5 percent for the financially constrained milk cooperatives. The first objective is to promote the upgrade of old and inefficient chilling and processing infrastructure and the development of plants for the production of value-added dairy products.

The objectives of the scheme include: 

• Improving the production effectiveness of the dairy processing plants and the producer-owned dairy institutions.
• Helping institutions involving producers and managers to increase their portion of the total milk market volume.
• Developing more significant opportunities for rural milk suppliers to own, manage, and negotiate their stakes and share in the organized milk sector.

Banks may finance the following institutions for this scheme: State Cooperative Dairy Federations, Cooperative Milk Unions, Milk Producer Companies, Multi-State Milk Cooperatives, subsidiaries of NDDB, Farmer Producer Organisations (FPOs), and Self-Help Groups (SHGs). These institutions need to make profits and have a sale value that is more than the total cost.

9. Startup Intellectual Property Protection Scheme (SIPPS)

The Government of India, to encourage startups, launched the Scheme for Facilitating Startups Intellectual Property Protection (SIPP). This Scheme was initiated to reach out to startups and protect and promote their intellectual property rights (IPR), thus encouraging innovation and creativity among entrepreneurs. The Scheme was started on a pilot basis in January 2016 and was in force until March 2020. The Department of Promotion of Industry and Internal Trade (DPIIT) has notified us that the SIPP scheme is now being extended for three years, up to March 31, 2023.

Objectives of the SIPP:

• Promote awareness of Intellectual Property Rights (IPR) among startups.
• Nurture and mentor innovative and emerging technologies.
• Assist in the protection and commercialization of IPR.

SIPP Benefits for Startups:

• Access to patent, trademark, and design services with only statutory fees required.
• The government covers professional fees for IPR-related services.
• Comprehensive start-to-end IPR services, including drafting, filing, and hearings.
• DPIIT impaneled facilitators provide free IPR services to startups.
• There is no need for an eligibility certificate from the Inter-Ministerial Board of Certification.

As per the revised guidelines, the Startups enrolled under this Scheme will not be required to obtain a certificate of an eligible business from the Inter-Ministerial Board of Certification.

10. Pradhan Mantri Mudra Yojana (PMMY)

The Pradhan Mantri Mudra Yojana (PMMY) is again an independent Indian Government scheme that offers loans to small and micro enterprises operating in nonfarming sectors for self-employment. This loan can be used to meet working capital requirements, build capacity, and modernize. The scheme is available via banks, non-bank financial companies, NBFCs, microfinance institutions, MFIs, and other relevant financial facilitators. PMMY provides loans of up to ₹ 10 lakhs to the Promoter/Proprietor/Partner/Managing Partner/Owner of the business, where collateral security is not required for a loan of ₹50,000 or less. It also disposes of loans for micro-enterprises and others involved in petty business ventures.

The scheme categorizes its interventions into three stages—’SHISHU,” ‘KISHOR,” and ‘TARUN’—which correspond to the growth stage and funding needs of the beneficiary micro unit or entrepreneur:

• Shishu comprising of Loans up to Rs. 50,000/-
• Kishor (Applicable for loan amount up to Rs. 5,00,000/-.
• Tarun (Refers to some conditions under which a borrower is allowed to borrow up to Rs. 10,00,000/-)

The lending rates are according to the directions issued by the RBI, and lending rates are respected occasionally.

Startup India is a government-launched program responsible for supporting and nurturing startups in the country by providing an encouraging environment for innovation. By providing funding and other support to those wishing to engage in business activities, Startup India seeks to contribute to the generation of wealth and employment in the Indian economy.

FAQs

1.What is Startup India, and what can it offer to my startup?

Startup India is a government-sponsored program that provides startups with tax incentives, funds, and guidance to overcome initial spending and get a consultation.

2. What are MSME schemes, and why are they relevant to my small business?

MSME schemes involve:

• Offering capital subsidies.
• New technologies and marketing.
• Thus improving the competitiveness and growth of your small business.

3. To whom is the Stand-Up India Scheme targeted?

SC/ST and women entrepreneurs can borrow from ₹10 lakh to ₹1 crore to start or scale-up ventures.

4. What is the Startup India Seed Fund?

A ₹1,000 crore fund in 2021 to incubate startups and give them early-stage funding to build products that can be marketed.

5. What gains will I have from the Atal Innovation Mission?

Atal Innovation Mission provides funds and advocacy for innovation, using funding and incubation to turn innovative ideas into sustainable and profitable business models.

6. What is the Software Technology Park (STP) Scheme?

A scheme aimed at developing software exports that brought in incentives such as 100% capital depreciation for five years.

7. What is the eBiz Portal?

India’s first online Government-to-Business (G2B) platform to simplify regulatory processes and enhance the ease of doing business.

8. What is the Dairy Processing & Infrastructure Development Fund (DIDF)?

An ₹8,004 crore fund intended to provide cheaper credit to upgrade the dairy sector.

9. What is the Startup Intellectual Property Protection Scheme (SIPPS)?

An investment plan for claims to enhance and market new inventions and ideas, where the Government pays the professional charges.

10. How does the Mudra Yojana assist in securing funds for my business?

A scheme known as Pradhan Mantri Mudra Yojana, launched in India, offers loans suited for micro and small businesses, catering to the business’s necessary financial needs for growth and operations.

Contact our experts at Match Valley (Mob: +9195381 11008, E-mail: [email protected]) for a free consultation on preparing your pitch deck, preparing /reviewing a financial model, and for startup fundraising