India is gradually on its mission to build a robust startup ecosystem. In order to promote and support entrepreneurs, the government has created a ministry (department) dedicated to helping new businesses. Furthermore, the Central Government of India has also introduced many schemes to bolster entrepreneurship in India and to assist emerging startups financially.
“Take up one idea. Make that one idea your life, think of it, dream of it, live on that idea, let the brain, muscles, nerve, every part of your body be full of that idea and just leave every other idea alone. This is the way to success.”
- Mr Narendra Modi, Prime Minister of India
Government Schemes for Startups - Latest News
August 25, 2021 - The Indian government launched the SAMRIDH scheme to help the startups with the necessary funding and skillsets crucial for the growth of their business ahead.
May 25, 2021 - The imposed restrictions and lockdown strategy of the government as a prevention measure of the deadly second wave of Coronavirus has badly affected some sectors including Hospitality, Tourism, and Aviation. The government of India is preparing a stimulus package for these sectors to support the economic struggle these sectors are going through. The ministry of finance is working on proposals to support Tourism Industry, Aviation Industry, Hospitality sectors, and other small and medium-sized organizations, which were badly in trouble. The Finance Ministry has also given relaxations in cash management and removed imposed restrictions to encourage departments to carry out capital expenditure with an aim to boost the economy.
Here is a list of government schemes launched to develop and encourage entrepreneurship in India.
SAMRIDH Scheme
Startup India Seed Fund
Startup India Initiative
ASPIRE
Pradhan Mantri Mudra Yojana (PMMY)
Ministry of Skill Development and Entrepreneurship
ATAL Innovation Mission
eBiz Portal
Dairy Processing and Infrastructure Development Fund (DIDF)
Support for International Patent Protection in Electronics & Information Technology (SIP-EIT)
Multiplier Grants Scheme (MGS)
Credit Guarantee Fund Trust for Micro and Small Entreprises (CGTMSE)
Software Technology Park (STP) Scheme
The Venture Capital Assistance Scheme (VCA)
Loan For Rooftop Solar Pv Power Projects
NewGen Innovation and Entrepreneurship Development Centre (NewGen IEDC)
Single Point Registration Scheme
Modified Special Incentive Package Scheme (M-SIPS)
Stand Up India Scheme
High Risk - High Reward Research
IREDA-NCEF Refinance Scheme
Dairy Entrepreneurship Development Scheme
Drone Shakti
Zero Defect Zero Effect (ZED) Certification Scheme
Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)
Design Clinic Scheme for Design Expertise
Conclusion
SAMRIDH Scheme
Ashwini Vaishnaw, who was then a newly appointed Minister of Electronics Information and Technology (MeitY) launched the SAMRIDH scheme, which stands for Startup Accelerators of MeitY for pRoduct Innovation, Development, and growtH, on August 25, 2021, after a little over a week of his announcement that the government will support the startups in the initial stages.
The SAMRIDH initiative is designed to provide funding support to startups along with helping them bring skill sets together which will help them grow successful. The newly launched SAMRIDH program aims to focus on the acceleration of around 300 start-ups by extending them with customer connect, investor connect, and other opportunities for international expansion in the upcoming three years that will follow.
Startup India Seed Fund
On 16 January 2021, Prime Minister Narendra Modi announced the launch of the 'Startup India Seed Fund' — worth INR 1,000 crores — to help startups and support ideas from aspiring entrepreneurs. PM Modi said that the government is taking important measures to ensure that startups in India do not face any capital shortage.
The reserved fund for the Startup India Seed Fund initiative, as per the Union Budget of 2022 is Rs 283.5 crore, which is higher than the revised estimate of around Rs 100 crore for the year 2021-22.
Startup India Initiative
The Prime Minister of India launched the Startup India Initiative in the year 2016 on 16th January. The idea is to increase wealth and employability by giving wings to entrepreneurial spirits. The government gives tax benefits to startups under this scheme and around 50,000 startups have been recognized via this scheme in a period of a little more than five years, as of June 3, 2021. The Department of Industrial Policy and Promotion is maintaining this initiative and is treating it as a long term project. Moreover, the overall age limit for startups has been increased from two years to seven years. Plus, for the biotechnology firms, the age limit is ten years from the date of incorporation. It is one of the best government-sponsored startup schemes for entrepreneurs as it is provides several concessions.
ASPIRE
The government has made continuous efforts to improve the social and economic aspects of life in rural areas of India and one of the most popular schemes that the Indian government has sanctioned in this regard is ASPIRE. A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE) is a Government of India initiative and promoted by the Ministry of Micro, Small and Medium Enterprises (MSME).
The mentioned scheme was launched in 2015 to offer proper knowledge to the entrepreneurs to start with their business and emerge as employers. Since 56% of the Indian population lives in rural areas, the government has promoted entrepreneurship and innovation in the rural sector with this scheme. The ASPIRE scheme aims at increasing employment, reducing poverty, and encouraging innovation in rural India. However, the main idea is to promote the agro-business industry. The Ministry of Medium and Small Enterprises has tried to boost economic development at the grassroots level. The total budget of the scheme initially was INR 62.5 crores for the period of 2014-2016.
Also read: Startup Hubs in India
Pradhan Mantri Mudra Yojana (PMMY)
Micro Units Development Refinance Agency (MUDRA) banks has been created to enhance credit facility and boost the growth of small business in rural areas. The government has introduced this scheme to support small businesses in India. In 2015, the government allocated INR 10,000 crores to promote startup culture in the country. The MUDRA banks provide startup loans of up to INR 10 lakhs to small enterprises, business, which are non-corporate, and non-farm small/micro-enterprises. MUDRA comes under Pradhan Mantri Mudra Yojana (PMMY) which was launched on 8 April 2015. The loans have been categorized as Tarun, Kishore, and Shishu. The assets are created through the bank’s finance and there is no collateral security.
Ministry of Skill Development and Entrepreneurship
The task of promoting entrepreneurship was earlier given to different departments and government agencies. In 2014, the Prime Minister decided to dedicate an entire ministry to build this sector as he felt that skill development required greater push from the government's side. Furthermore, the idea is to reach 500 million people by the year 2022 through gap-funding and skill development initiatives.
ATAL Innovation Mission
In the budget session of 2015, the Indian government announced the Atal Innovation Mission (AIM); with the name coming from Atal Bihari Vajpayee, the Former Prime Minister of India. Atal Innovation Mission was established to create a promotional platform involving academicians and draw upon national and international experiences to foster a culture of innovation, research, and development. The government allocated AIM around INR 150 crores in the year 2015.
eBiz Portal
eBiz was the first electronic government-to-business(G2B) portal, which was founded in January 2013. The main purpose of the portal was to transform and develop a conducive business environment in the country. eBiz Portal was developed by Infosys in a public-private partnership model. It was designed as a communication center for investors and business communities in India. The portal had launched 29+ services in over 5 states of India, viz., Andhra Pradesh, Delhi, Haryana, Maharashtra, and Tamil Nadu. The government also announced that it will add more services to the scheme with time. However, after rounds of talks about the shutting down of the eBiz initiative since July 2018, it was finally shut down on account of low service integration. The government is again planning to revive eBiz-like portals, according to the 2020 updates.
Dairy Processing and Infrastructure Development Fund (DIDF)
National Bank for Agriculture and Rural Development (NABARD) is an apex development bank in India. The Government of India announced the creation of the Dairy Processing and Infrastructure Development Fund under NABARD in the Union Budget of 2017-18 for the sustained benefit of farmers. The total corpus for this fund is INR 8000 crores over a period of 3 years (i.e. 2017-18 to 2019-20)
Milk Unions, multi-state milk cooperatives, state dairy federations, milk-producing companies, and NDDB subsidiaries meeting the eligibility criteria under the project can borrow loans from NABARD. The loan component would be 80% (maximum rate) with the end borrower's contribution at 20 % (minimum rate). Borrowers shall get the loan at an interest rate of 6.5% per annum. The period of repayment will be 10 years. The respective state government will be the guarantor of loan repayment. Moreover, if the borrower is not able to contribute his or her share in the scheme, the state government shall step in.
The departments that come under the agriculture ministry were allocated a total of Rs 1.31 lakh crore in 2021 Budget, which has been increased to Rs 1.32 lakh crore in the Union Budget of 2022. A fund consisting of blended capital that will be raised under the co-investment model will be facilitated via NABARD, which will finance the agritech startups and rural enterprises that are relevant to farming. The Finance Minister of India, Nirmala Sitharaman further added that the use of ‘kisan drones’ will see a new encouragement to facilitate effective crop assessment, digitization of land records, and the spraying of insecticides and nutrients.
Chayanika Goswami
Support for International Patent Protection in Electronics & Information Technology (SIP-EIT)
The Department of Electronics and Information Technology (DeiTY) has launched a scheme entitled “Support for International Patent Protection in E&IT (SIP-EIT)”. This scheme provides financial support to MSMEs and Technology Startups for international patent filing.
Features and benefits of the SIP-EIT scheme are:
- Financial support is provided for international filing in Information Communication Technologies and Electronics sector.
- The Reimbursement limit has been set at a maximum of INR 15 lakhs per invention or 50% of the total charges incurred in filing and processing of a patent application, whichever is lesser.
- The SEP-EIT scheme can be applied at any stage of international patent filing by the applicant.
Multiplier Grants Scheme (MGS)
Department of Electronics and Information Technology (DeitY) started the Multiplier Grants Scheme (MGS). This scheme aims to encourage collaborative Research & Development (R&D) between industry and academics/institutions for the development of products and packages. Under the scheme, if the industry supports the R&D of products that can be commercialized at the institutional level, the government shall provide financial support which will be up to twice the amount provided by industry. MGS promotes and expedites the development of aboriginal products and packages. The government grants would be limited to a maximum amount of INR 2 crores per project and the duration of each project could considerably be less than 2 years. It would be INR 4 crores and 3 years for industry associations.
Credit Guarantee Fund Trust for Micro and Small Entreprises (CGTMSE)
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE ) was set up by the government of India and had been put to effect from 1st January 2000 onwards to provide business loans to micro-level businesses, small-scale industries, and startups with zero collateral. It allows businesses to avail loans at highly subsidized interest rates without requiring security. By working along with SIDBI (Small Industries Development Bank of India), the government provides a maximum amount of up to INR 100 lakhs under this scheme for boosting new enterprises as well as rehabilitating the existing ones. Primarily meant for manufacturing units, this loan can be availed in the form of working capital or a term loan.
Software Technology Park (STP)
The Software Technology Park (STP) scheme is a totally export-oriented scheme for the development and export of computer software. This includes the export of professional services using communication links or media.
The scheme is unique in its nature as it focuses on only one sector, i.e., computer software. The scheme integrates the government concept of "100% Export Oriented Units" (EOU), "Export Processing Zones" (EPZ), and the concept of Science Parks or Technology Parks as operating elsewhere in the world. The sales in the Domestic Tariff Area (DTA) shall be permissible up to 50% of the export in value terms. STP gives total depreciation on capital goods over a period of five years.
The Venture Capital Assistance Scheme (VCA)
Small Farmer’s Agri-Business Consortium (SFAC) has launched the Venture Capital Assistance (VCA) scheme for the welfare of farmer-entrepreneurs and to develop their agri-business. The scheme is approved by the banks and financial institutions regulated by the RBI. It intends to provide assistance in the form of term loans to farmers so that the latter can meet the capital requirements for their project's implementation. VCA promotes the training and nurturing of agri-entrepreneurs.
The quantum of the loan will be 26% (40% for hilly regions) of the promoter’s equity. The maximum amount of loan provided under this scheme will be INR 50 lakhs.
Loan For Rooftop Solar Pv Power Projects
To build reliance on non-conventional sources of power, the government of India has decided to set up 40,000 MWp of Grid-Interactive Rooftop Solar PV Plants in the next five years. These rooftop solar PV plants will be set up in residential, commercial, industrial, and institutional sectors in the country and shall range from 1 kWp to 500 kWp in terms of capacity. Such rooftop plants are economically viable since they can produce electricity using solar energy at about INR 7 per kWh without any subsidy. The government also provides a subsidy of 15% on these plants to the associations or individual companies, making the scheme even more lucrative.
NewGen Innovation and Entrepreneurship Development Centre (NewGen IEDC)
NewGen IEDC is an initiative launched by the National Science and Technology Entrepreneurship Development Board under the Department of Science and Technology, Government of India. The initiative aims to inculcate the spirit of innovation and entrepreneurship among the Indian youth. It also endeavors to support and encourage entrepreneurship through guidance, mentorship, and support.
NewGen IEDC is a five-year programme that would be implemented in educational institutions. It will support up to 20 new projects.
Single Point Registration Scheme (SPRS)
The Single Point Registration Scheme (SPRS) was launched in 2003. It is managed by the National Small Industries Corporation (NSIC). NSIC registers all Micro & Small Enterprises (MSEs) in India under the Single Point Registration Scheme to enable them to participate in government purchases.
Enterprises are classified as Micro, Small, or Medium based on the limit of investment. Eligible MSME units are provided with Udyog Aadhar registration certificate. All central ministries, departments, and PSUs shall set an annual goal of minimum 20% of the total annual purchases of products produced or rendered by MSMEs. About 358 items are reserved for exclusive purchase from MSMEs .
Modified Special Incentive Package Scheme (M-SIPS)
The government of India has approved a special incentive package to promote large-scale manufacturing in the Electronic System Design and Manufacturing (ESDM) sector. The scheme is called the Modified Special Incentive Package Scheme (M-SIPS).
Under M-SIPS, the Indian government will provide a subsidy of 20% on capital investments in special economic zones (SEZs) and 25% on capital investments in non-SEZs for individual companies. It also provides the re-imbursement of CVD/excise on capital equipment for non-SEZ units. Re-imbursement of central taxes and duties is also provided for high technology and high capital investment units.
Ashwini
Stand Up India Scheme
Stand-Up India for Financing SC/ST and/or Women Entrepreneurs
Stand-Up India is a notable government of India scheme for financing SC/ST and/or women entrepreneurs. According to the scheme, bank loans between 10 lakhs to 1 crore can be borrowed by at least one Scheduled Cast (SC) or Scheduled Tribe (ST) borrower and at least one woman per bank brand to set up a greenfield enterprise. The greenfield enterprise may be based out of manufacturing, services or the trading sector. In case of non-individual enterprises, it is mandatory that an SC/ST or a woman entrepreneur holds at least 51% of the shareholding and controlling stakes.
ExtraMural Research Funding Scheme
ExtraMural Research or Core Research Grant
The government of India launched the famous Extramural Research (EMR) funding scheme via SERB to help academic institutions, research laboratories, and other R&D organizations carry out their basic research in all frontier areas of Science and Engineering. Founded just after the establishment of the Science and Engineering Research Council (SERC), this scheme is one of the oldest on the list and still quite a relevant one even after more than four decades of its existence.
This scheme encourages emerging and eminent scientists in the field of science and engineering for an individual-centric competitive mode of research funding. Only the name Extramural Research (EMR) has now been renamed to Core Research Grant (CRG) because the scheme provides core research support to active researchers.
High Risk - High Reward Research
The High Risk and High Reward Research is a scheme launched by the Indian government to support and invite new proposals and ideas that have the potential to usher a paradigm shifting influence on the Science and Technology domains. This funding focuses on the new proposals, which might be conceptually new and risky but are expected to have a paradigm shifting influence on the S&T, in terms of formulating new hypotheses or scientific breakthroughs, which might help in the emergence of new technologies.
IREDA-NCEF Refinance Scheme
The revival of the operations of existing biomass power and other small hydro power projects, which were affected due to unforeseen circumstances, is essential, which is why the government of India decided upon the Refinance Scheme in collaboration with the Indian Renewable Energy Development Agency Ltd. (IREDA) and The National Clean Energy Fund (NCEF).
The scheme aims to revive the operations of the existing biomass power and small hydro power projects by cutting down the cost of funds for these projects and providing refinance at concessional rates of interest, with funds sourced from the National Clean Energy Fund (NCEF).
Dairy Entrepreneurship Development Scheme
The Dairy Entrepreneurship Development Scheme (DEDS) is a scheme implemented by the Department of Animal Husbandry, dairying, and fisheries to generate self-employment opportunities in the dairy sector. These opportunities in the mentioned sector will comprise activities like the enhancement of milk production, procurement, preservation, transportation, processing, and marketing of milk by providing back-ended capital subsidies for bankable projects.
The scheme has been implemented by the National Bank for Agriculture and Rural Development (NABARD).
Drone Shakti
The government of India launched Drone Shakti, as voiced by the Union Finance Minister Nirmala Sitharaman on February 1, 2022. This new initiative is designed to motivate the startups to introduce diverse applications for drones, including drones-as-a-service (DaaS). Furthermore, the finance minister also stated that the government would encourage the use of drones by farmers. Sitharaman focused on the farmers' use of these drones to survey the lands and spray insecticides along with digitising land records. Besides, the government also asserted to stand in full support of the drone technology startup in India. It recently flagged off 100 Kisan Drones in diverse parts of the country to spray pesticides and more. In order to promote the made-in-India drones, the government of India banned the import of drones with immediate effect. This however exempts the import of drones for research and development, defence, and security purposes, as per the Ministry of Civil Aviation (MoCA).
The drone manufacturing industry, as estimated by MoCA, is expected to receive an investment of over Rs 5,000 crore over the next 3 years, which will include drones and drone components. The annual turnover of the sales of the drone manufacturing industry, which was valued at Rs 60 crore during FY 2020-21, will shoot over to Rs 900 crore during FY 2023-24.
Zero Defect Zero Effect (ZED) Certification Scheme
The Zero Defect Zero Effect (ZED) scheme has been launched by the government of India with a vision of creating proper awareness about ZED manufacturing among the MSMEs and motivating them for the assessment of their enterprise for ZED and supporting them. ZED can be summed up as an integrated and holistic certification and handholding scheme that extends an opportunity to the Micro, Small and Medium Enterprises (MSMEs) to strive to continuously improve their processes and move up the ZED maturity assessment model.
Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)
Credit Linked Capital Subsidy for Technology Upgradation, which is popularly acronymed as CLCSS, is a government of India scheme to upgrade technology. Under CLCSS the Indian government provides cash for the Indian companies upfront to upgrade/modernize their equipment or techniques. This scheme mainly empowers Micro and Small Scale Enterprises (MSMEs).
Design Clinic Scheme for Design Expertise
The Design Clinic Scheme for Design Expertise is a scheme declared by the Indian government to support the MSME manufacturing sector of India. As the government deems that design and innovation are critical to the growth of a brand and feels that the MSMEs should develop a design-centric approach to fuel their startups, it aims to infuse design expertise in them. Under this scheme, the government of India announced to extend around Rs 60,000 for attending design seminars and up to Rs 3.75 lakhs or 75% of the cost that would be needed in conducting the seminar, where the entrepreneurs and their teams can learn about design theories, interact with design veterans, build a network, and put them into practice.
Conclusion
The government is not only promoting these schemes to help the present group of startups benefit from them but also motivating the budding entrepreneurs, startups, and students from all domains, who tend to be independent and lead the vision of Atmanirbhar Bharat forward. These initiatives have been introduced for the development of the Indian startup ecosystem. The country now seems to be heading towards the golden era of entrepreneurship, where if things go as planned, India may host as many successful startups as the USA or any other leading nation by 2030.
Read more: 2018 list of top 50 richest people in India
Source :- https://startuptalky.com/ Author :- Ashwini Date :-February 21, 2022 at 12:02PM