Planning to start a business in India and looking for schemes that can support your business venture? You do not need to look too far with the Government of India’s ‘Startup India’ scheme to provide financial aid in the form of loans and subsidies to aspiring individuals who are starting up their own businesses. This initiative will further increase job opportunities and boost the Indian economy significantly.
The Government has also launched the ‘Made in India’ initiative along with the ‘Aatmanirbhar Bharat’ mission, with the aim of making India a new business, manufacturing and design export hub of the world.
With more than 100 unicorns and over 80,000 startups, India has the world’s third-largest startup ecosystem. Various schemes started by the Government aims to further boost this number and provide monetary assistance to entrepreneurs during the initial stages of their business venture.
A Scheme for the Promotion of Innovation, Rural Industries & Entrepreneurship (ASPIRE)
India is massively dependent on agriculture for various reasons. In addition, a significant part of the Indian population resides in the rural areas as well. The ASPIRE program was launched to create job opportunities, innovative agriculture businesses and a network of technology and incubation centers across India with the aim of boosting entrepreneurship and supporting innovation in the country.
ASPIRE provides financial support to set up livelihood business incubators and/or technology business incubators up to INR 100 lakh or 100% of the Plant and Machinery cost is provided by the Government.
| Note: The cost of land and infrastructure is not included in the monetary help provided by the Government. |
Prime Minister’s Employment Generation Program (PMEGP)
PMEGP aims to provide financial aid to help setup independent business and create long-term job opportunities in both urban and rural areas of the country.
Key benefits of this program:
- Bank-financed monetary assistance to help setup micro-enterprises in the market apart from the farm sector.
- Margin Money subsidy between 15% and 35% shall be for projects that amount up to INR 50 lakhs in the manufacturing industry and INR 20 lakh in the service sector.
- The margin money subsidy for special categories such as SC/ST/women/minorities/ex-servicemen/transgender/aspirational districts/North Eastern Region (NER) is 35% and 25% in rural and urban areas respectively.
Pradhan Mantri ‘Mudra’ Yojana
Micro Units Development and Refinancing Agency Ltd. (MUDRA) is a non-banking financial institution that, under this program, aims to boost the growth of micro-enterprise sector in India. MUDRA provides banks and/or microfinance institutions with refinancing help in order to lend to micro units with loan requirements up to INR 10 lakhs.
The loans available have been sorted into three categories –
Tarun, Kishore and Shishu. Depending on the stage of development, the need for finances, the age of the firm, and the number of loans that may be availed of, businesses may avail of the loans available.
- There is no specific collateral security for such assets and non-corporate and non-farm micro or small enterprises can avail of loans of up to INR 10 lakhs.
- This loan is made available basically to generate income and increase the number of jobs in the country. It is mainly available for store owners, traders, street vendors, and other such service-providers.
Note: You may also apply for other available options like working capital, travel vehicles and working capital loans.
Support for International Patent Protection in Electronics and Information Technology (SIP-EIT)
Launched by the Department of Electronics and Information Technology, the SIP-EIT scheme aims to provide financial aid to tech-startups for international patent filings. The aim is to promote intellectual property protection, brand recognition and innovation while assisting eligible entities with the international patent filing process.
- The reimbursement limit for any invention is set at 50% of the overall application filing and processing expenses or INR 15 lakhs, whichever is lesser.
Multiplier Grants Scheme (MGS)
Also launched by the Department of Electronics and Information Technology, the MGS aims to enable collaboration with premier academic and government R&D institutions to develop packages and products. This shall not only help industries explore and manufacture indigenous products but also eliminate the gap between the startup and globalization stage.
- As per this scheme, a grant of INR 2 crores per project and industry with a preferred duration of two years shall be available for startups.
- The granted limit for a consortium of industries is INR 4 crores with a duration of three years.
Credit Guarantee Fund Trust for Micro & Small Enterprises (CGTMSE)
The Credit Guarantee Fund Trust for Micro and Small Enterprises was launched by the Ministry of MSME of the Indian Government and the Small Industries Development Bank of India (SIDBI). This scheme allows startups, small-scale industries and micro-level businesses avail loans at a highly subsidized rate and without any collateral security.
- With the funds disbursed by SIDBI, this program provides funds and non-fund credit services of up to INR 200 lakhs to each eligible borrower.
CGTMSE is a scheme primarily for service or manufacturing businesses. Furthermore, the loans availed by such entities can be availed of as working capital or as a term loan.
Single Point Registration Scheme
The Single Point Registration Scheme is managed by the National Small Industries Corporation and aims to assist MSEs in India and increase the total number of purchases from small businesses.
- Eligible MSEs are registered by the NSIC to make government purchases without the need for an Earnest Money Deposit (EMD).
- In addition, certain advantages in tender participation, free tender and procurement from MSEs are available as well.
- Furthermore, 358 categories of goods are reserved for purchase exclusively from MSEs, while the Government has fixed a minimum limit of 25% of the total year’s purchases made by departments, central ministries and the public sector to be only made from MSEs.
Extra Mural Research or Core Research Grant (CRG)
The Core Research Grant was created by the Science and Engineering Research Board (SERB) in order to support scientific and engineering research being conducted by university institutions, research labs and other R&D entities. As such, both established and up-and-coming researchers are motivated to use a competitive individual-centric funding model.
Micro & Small Enterprises Cluster Development Program (MSE-CDP)
The goal of this program is to enable growth and sustainability of MSEs by tackling common challenges like improvement of technology, skills, quality, market access, etc. The program creates/upgrades infrastructural facilities in the new/existing industrial areas/clusters of MSEs.
Key benefits of the scheme:
- Creation of ‘tangible assets’ like Common Production/Processing Center, Design Centers and Testing Facilities, which include Plug-and-Play facilities. The Government of India assists up to 80% of the maximum project cost of INR 30 crores.
- Developing land, roads, drainage, power distribution, etc. in new/existing industrial (multi-product) areas/ estates/ flatted factory complexes. With this, the Government of India shall assist up to 70% of the maximum project cost of INR 15 crores.
High Risk and High Reward Research
This scheme was launched to assist with new scientific and technological ideas. This assistance may involve improvements in theories and experimentations, tests of hypotheses and scientific breakthroughs. There is no fixed cap for expenses for these projects, while aside from the overhead funding, the research grant must cover consumables, unforeseen expenses, equipment, and travel expenses.
- The financial aid provided is for three years. However, in case of special circumstances, this period may be extended to five years.
Design Clinic Scheme
To develop a feasible design ecosystem for training and skill-building, the Ministry of MSME launched the Design Clinic scheme.
- The Government shall pay up to INR 60,000 and up to INR 3.75 lakhs or 75% of the seminar’s cost for attending design seminars under this scheme, if it is hosted by a startup or MSME.
It is presumed that this scheme will help entrepreneurs and leaders get the chance to learn the most recent best practices and trends for design, connect with other designers and innovators, increase their knowledge base about design theories, and boost local competitiveness of their products’ use of designs.
Zero Defect Zero Effect (ZED) Scheme
Availing of this scheme helps MSMEs get the chance to adopt cutting-edge production techniques, make use of cutting edge technology and progressively improve their products. The scheme provides startups and MSMEs the necessary resources, technology and financial help to make sure there are no defects in their products. Besides, ZED helps startups, evaluates businesses and certifies businesses.
Scheme of Fund for Regeneration of Traditional Industries (SFURTI)
SFURTI aims to organize traditional industries and artisans into collective groups by boosting productions and focusing on value addition in order to increase the competitiveness of products.
Key benefits:
• Financial aid of up to INR 2.5 crores for up to 500 artisans and INR 5 crores for more than 500 artisans.
• Other forms of assistance may include a production facility to setup modern machineries, exposure visits, buyer and seller meets, skill development, marketing business development, support for digitization, etc.
Conclusion
The Government of India is taking significant steps to support growth of startups and encourage others to start their own business and become a part of the ‘Aatmanirbhar Bharat’. The ultimate goal is to help individuals with creative and innovative ideas to turn them into actual profitable businesses. This will not only help such individuals grow but also have a significant impact and boost the Indian economy as well.
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