The Government of India has launched several schemes to support and encourage the Startup ecosystem in India. These schemes and initiatives provide incentives to the companies for business development.
The objective of launching these schemes is not only to support the startups but also to generate large-scale employment opportunities for youth. Today, India stands third among the startup ecosystem in the world. There are more than 60,000 startups in India at the moment.
In this article, we have listed some popular Government schemes that might be helpful for Startups.
Top Government Schemes For Startups
1. Pradhan Mantri Mudra Yojana
Micro Units Development and Refinance Agency Ltd., a non-banking financial company, supports this scheme. MUDRA provides refinance support to microfinance institutions or banks to lend loans up to Rs.10 Lakhs to micro units. Depending on the stages of development (Tarun, Kishore, and Shishu) and the age of the business, loans are granted.
There is no collateral for up to Rs.10 Lakhs loan for small enterprises and non-corporates. Any company that has the potential to generate revenues and provide employment will surely get a loan approved under this scheme.
2. Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTSME)
It is one of the best and largest funding schemes for startups provided by the Indian Government. This scheme provides loans to small businesses, and micro-level businesses, without any security.
Startups can get up to 1 crore rupees without any collateral. The loan is disbursed by the Credit Guarantee Fund Trust for Micro and Small Enterprises, backed by the Ministry of MSME and the Small Industries Development Bank of India. The loan is released either in the form of a term loan or a working capital.
3. Financial Support to MSMEs in ZED Certification Scheme
This scheme is focussed on new as well as existing manufacturing units. The ZED certification scheme is launched to encourage manufacturers to develop better-quality products with zero defects.
This scheme provides financial support to the manufacturers and the technology and tools needed to create a world-class product.
4. Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)
The Credit Linked Capital Subsidy scheme helps startups with technology upgradation and productivity, which makes their products competitive worldwide. Under this scheme, upfront cash is released to small-scale companies to buy equipment or hire services to improve the company’s productivity.
5. Design Clinic for Design Expertise to MSMEs
Innovation and design play a key role in the growth of any company. So, the Government of India plans to launch this scheme which supports the design-centric approach. Innovative designs by startups are encouraged by the Ministry of MSME. Ongoing training and skill development are also provided under this scheme.
Up to Rs.60,000 is provided to the companies to attend the seminars on design, and up to 3.75 Lakh rupees or 75% of the total amount is provided as the seminar cost. Usually, these seminars are conducted by MSMEs or startups.
6. ASPIRE – A Scheme for the Promotion of Innovation, Rural Industries, and Entrepreneurship
This scheme was launched to set up multiple incubation and technology centers to accelerate entrepreneurship and innovation in the agro-business industry. This scheme provides funding to set up either technology business incubators or livelihood business incubators. The fund is released either as a one-time grant (100% of the amount) for plant and machinery setup or up to 1 crore rupees, whatever is less.
7. Support for International Patent Protection in Electronics and Information Technology
(SIP-EIT)
This scheme was launched by the Department of Electronics and Information Technology to provide government funds to small and micro businesses to file international patents. Through this scheme, small businesses can get property protection for their ideas, innovation, brand recognition, etc.
The funding is provided only to information technology communication and electronics companies. Companies can apply for this scheme irrespective of where they stand in the international patent filing process. The funding is either 50% of the total filing expenses or Rs.15 lakhs, whatever is the less.
8. Multiplier Grants Scheme (MGS)
This scheme is launched to encourage industries to collaborate with academia and Research and Development team. This scheme will strengthen the link between institutes and industries. It will also bridge the gap between globalization and proof-of-concept.
The Indian Government would fund the companies that support the Research and Development of products and are also capable of being commercialized. The funding is capped at two crores per project, and the duration is less than two years. The grant is usually limited to 4 crores for a consortium of companies.
9. Single Point Registration Scheme (SPRS)
National Small Industries Corporation funds this scheme to encourage small-scale companies. The objective behind this scheme is to increase purchases from small-scale industries. MSEs under this scheme can participate in government purchases without any need to pay a security deposit before placing the bid. So, the companies having NSIC registration are exempted from paying Earnest Money Deposits. Moreover, 358 categories of goods are reserved to be purchased from the MSEs. The Government itself does a minimum of 25% of yearly purchases.
10. Extra Mural Research or Core Research Grant (CRG)
It is one of the oldest schemes launched by the Government after establishing the SERB, Science and Engineering Research Board. This scheme encourages academic institutions and Research and Development departments to conduct all kinds of science and engineering research.
11. High-Risk and High-Reward Research
This scheme encourages new ideas and innovations that will positively impact the field of science and technology. New yet risky ideas are also considered for funding, but they must also be highly rewarding if successful. Any scientific breakthroughs, out-of-the-box solutions, experimental or theoretical advances, etc., are also considered for budget approvals.
The funding a company can get is unlimited if their idea is worth rewarding to the field of science and technology. The budget is provided for three years, which you might extend up to 5 years in some cases.
12. ATAL Innovation Mission (AIM)
The ATAL Innovation Mission is launched to encourage the development and innovation research in India. AIM is under the control of the Department of Science and Technology. The Government of India does the budget allocation for this scheme. Through this scheme, there a synergy is established between the academies, industries, and the Government.
13. Startup India Seed Fund (SISF)
Startup India Seed Fund provides funding to companies with proof of concept, commercialization, prototypes, or even product trials. Through these investments, startups can compete with the respective industries’ leaders and positively impact India’s employment.
According to the Union budget 2022, Rs.283.5 crores was reserved for the Startup India Seed Fund scheme. This number is likely to increase in the coming years.
14. Venture Capital Assistance (VCA)
Small Farmer’s Agri-Business Consortium launched the Venture Capital Assistance scheme to provide interest-free loans to projects that qualify and can become successful ventures in the long run. Along with the capital, VCA also provides training and assistance to entrepreneurs.
15. New Generation Innovation & Entrepreneurship Development
The Indian Government launches this scheme to support and encourage the entrepreneurial spirit among the youth. Through this scheme, the Government aims to create new jobs, generate more wealth, and improve the economy. The New Generation Innovation & Entrepreneurship Development scheme can help solve the initial hurdles many startups face in the country.
Conclusion
These are beneficial schemes for startups, students, and budding entrepreneurs. The key objective behind these schemes remains the same: strengthening the bond between the industries and the Indian Government. Check which of the above schemes best fits your industry, and apply for the respective scheme.
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