India is well on its way towards establishing a sustainable startup ecosystem. India, today, has at its disposal robust amounts of talent. Harnessing this raw potential by encouraging startup culture has proven advantageous, contributing to a wide range of innovation and skills in the market. The Indian government got wind of this and wasted no time in setting up government schemes for startups in India to endorse and assist entrepreneurs financially.
Top Government Schemes For Startups in India
Startups in India are defined as companies headquartered in India, functioning for less than 10 years and receiving an annual turnover of fewer than ₹100 crores.
Here’s a list of government schemes for startups in India
1. Atal Innovation Mission
AIM or Atal Innovation Mission is a prime government scheme for startups, established by NITI Aayog to encourage innovation and entrepreneurship across India. The idea behind this startup scheme is to provide an environment for academicians and scholars to generate ideas for innovation, research, and develop them at the school, university, research institutions, industry and MSME levels.
To facilitate their objectives, AIM has created Atal Tinker Labs and Atal Incubators. Under this government scheme for startups in India, the Atal Incubation Centers (AICs) are awarded a grant-in-aid of ₹10 crores for a maximum of 5 years.
Startup industries eligible for financial and infrastructure support are chemical startups, technology hardware, aeronautics, aerospace and defense, healthcare and life sciences, agriculture, Artificial intelligence, AR & VR, automotive startups, construction, design, non-renewable and renewable energy and telecommunication startups
2. Startup India Initiative
The startup India scheme was launched by the Prime Minister of India on the 16th of January 2016.
The startup India scheme provides tax benefits to startups. This scheme has also identified around 50,000 startups in a span of a little over five years. Through this scheme, the government’s objective is to facilitate the growth of startups through innovation and design. To avail benefits of the startup India scheme, these are the criteria a company must meet, a few requirements that are mentioned on the website .This scheme is viewed to be around for the long haul. With the increase of the overall age limit from 2 years to 7 and for Bio-tech firms – the age limit is 10 years from its date of incorporation.
This is one of the most beneficial schemes to be availed by entrepreneurs, with wide benefits and several concessions.
3. Stand up India scheme
Stand-up India for financing SC/ST and/or Women Entrepreneurs Among the government schemes for startups, this scheme is specifically designed for SC/ST/ or women entrepreneurs. The scheme providers a loan between 10 lakh and 1 crore to at least one of the above-mentioned borrower eligible candidates. And at least one woman per bank branch to set up greenfield enterprises. The setup enterprise must be a manufacturer, a service, or a trade sector project. In the case of non-individual enterprises, the woman, SC or ST person must be 51% shareholder.
4. Startup India seed fund
Startups in India have had to put up with insufficient capital during their development stages. This is a company’s defining point, and lack of funds can be detrimental to the companies’ growth as they might not be able to create prototypes, execute product trials etc. Recognizing this need, the government has included a seed funding scheme within its startup India Scheme. A few criteria mentioned are: the applying startup should have DPIIT recognition and not be more than two years in age. The startup should hold a business idea to develop a product or a service that is market fit, commercially viable, and has a scope of scaling.
This Government scheme for startups is worth 1,000 and was initiated by the Prime Minister on 16th January 2021.
5. SAMRIDH Scheme
This scheme for startups in India was intended to support funding for Indian startups and assist them in collecting the required manpower to drive their companies to success. The scheme was introduced in August 2021 by the newly appointed Minister of Electronics Information and Technology (MeitY).
SAMRIDH stands for – Startup Accelerators of MeitY for Product Innovation, Development, and Growth. The scheme’s objective is to accelerate around 300+ startups by providing them with customer connections, investor connections, and opportunities for international expansion within the following three years.
6. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
The list of government schemes in India includes the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE ). It was set up on 1st January, 2020 by the government of India and has been live since. The scheme gives out business loans to micro-level businesses, small-scale industries, and startups with no collateral required.
Startups in India are allowed to avail loans at highly subsidized interest rates with no security. Working alongside SIDBI (Small Industries Development Bank of India), the government offers a maximum of INR 100 lakhs under this scheme to promote startups in addition to recovering existing businesses.
This loan can be received from working capital or a term loan and is essentially meant for manufacturing industries.
7. Software Technology Park (STP) Scheme
The Software Technology Park (STP) scheme is a scheme for startups in India that is entirely oriented towards exports. This scheme enables the development and export of computer software. In addition, the export of professional services via communication links or physical media is also a focal point.
This Government scheme for startups in India has a singular focus on computer software. This program is a combination of the concept of one hundred percent export Oriented Units by the government, i.e. Export Processing Zones, and the principles of science Parks/Technology Parks, operating across the globe.
Domestic Tariff Area (DTA) sales are admissible for up to 50% of the exports in terms of value. STP provides total depreciation on capital assets for a period of five years.
8. NewGen Innovation and Entrepreneurship Development Centre (NewGen IEDC)
One of The government schemes for startups in India is the New Gen IEDC scheme. launched in collaboration with the National Science and Technology Entrepreneurship Development Board under the Department of Science and Technology & Government of India, the scheme aims to instill an innovative and entrepreneurial mindset among the youth of India using advice, mentorship, and assistance. NewGen IEDC scheme is a five-year program to be implemented in educational institutions and will shoulder up to 20 new projects. Students, through this scheme, will be encouraged to pursue new initiatives that have the capacity to go commercial.
9. Support for International Patent Protection in Electronics & Information Technology (SIP-EIT)
The Department of Electronics and Information Technology (DeiTY) launched a scheme for startups in India titled – Support for International Patent Protection in E&IT (SIP-EIT). This scheme’s target is to provide financial support access to Technology Startups MSMEs and for filing international patents.
Features and benefits of this government scheme for startups are:
- Provides financial support to Information Communication Technologies and the electronics sector for international filing.
- A Compensation limit of INR 15 lakhs per invention or 50% of the total charges sustained while filing and processing of the patent application, whichever is lower, is set.
- The SEP-EIT scheme is applicable at any of the stages of international patent filing by the applicant.
10. The Venture Capital Assistance Scheme (VCA)
The Venture Capital Assistance (VCA) scheme was launched by the small Farmer’s Agri-Business Consortium (SFAC). This government scheme for startups was created for the welfare of farmer-entrepreneurs additionally, to develop their agribusiness.
The scheme is authorized by banks and various financial institutions regulated by the RBI.
The program’s objective is to assist agribusinesses in the form of term loans for farmers to satisfy capital requirements crucial in facilitating their projects and to promote the training and nurturing needed by agricultural entrepreneurs.
The portion of the loan will be 26% (40% for hilly regions) of the promoter’s equity. A maximum loan amount of INR 50 lakhs can be sanctioned under this scheme.
In addition to the above-mentioned schemes, platforms such as the I-MADE program – enabling entrepreneurs to build 10 lakh mobile app start-ups and under the Pradhan Mantri Mudra Yojana – the MUDRA Bank’s scheme provides microfinance along with low-interest rate loans to entrepreneurs hailing from socioeconomically backward backgrounds. A capital of ₹20,000 crores has been sanctioned for this scheme.
The government hasn’t initiated these only for the benefit of existing startups but to also motivate promising entrepreneurs, startups, and students from all walks of life, thus, progressing the vision of an atmanirbhar Bharat.