Top Government Schemes for Startups in India to Support Innovative Ideas

The Indian Government has dedicated itself to building a great ecosystem that fosters innovation and entrepreneurship. In the last few years, we have seen many schemes and funds being dedicated to supporting startups. The main idea behind these government schemes for startups is to build a favorable environment for businesses to thrive.

Government schemes facilitate funding, collateral-free debts, accelerators and incubators, mentor programs, networking events, boot camps, tax holidays, and exemptions, to support the startup community. These schemes are meant for a diverse set of innovations, be it for services, manufacturing, defense, agri-tech, textile, or even food processing.

This article discusses some of the best Government Schemes for startups in India along with their benefits and eligibility.

Top 8 Government Schemes for Startups in India

1. Startup India Initiative
2. The Pradhan Mantri Mudra Yojana (PMMY)
3. Startup India Seed Fund Scheme (SISFS)
4. Atal Innovation Mission (AIM)
5. Startup Accelerator of MeitY for Product Innovation, Development and Growth Scheme
6. The Venture Capital Assistance Scheme
7. Single Point Registration Scheme (SPRS)
8. Standup India Scheme

Indian Government have launched multiple schemes to support startups and innovation in India. These schemes are intended to help startups to raise funding, drive innovation, and lower compliances.

1. Startup India Initiative

Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem that is conducive to the growth of startup businesses and thereby foster innovation and entrepreneurship. The action plan envisages providing support to startups through several initiatives, exemptions, relaxations and funding.

Startup India also embeds multiple other schemes from both central and state government to provide founders with one stop information and registration point. Besides, it also has a huge knowledge base of courses, eBooks, and mentorship programs on its portal to promote skills and leadership.

Startup India Scheme Eligibility

• Should be a registered Private Limited Company, Limited liability Partnership or Partnership Firm
• Within 10 years from the date of incorporation/formation
• turnover should not exceed 100 Cr in any of the previous financial year
• Must be working towards innovations, job creation, improvement, wealth creation, etc.

Major Benefits Under Startup India Scheme

• Tax Exemptions

• Fast track patent registration with 80% fee rebate
• 10,000 Crore allocation for fundraising
• Removed eligibility constraint for government tender
• Self-certification under environmental and labor laws
• Dedicated online portal for registration, application, and mentorship.
• Easy business wind up option in 90 days under IBC, 2016.

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2. The Pradhan Mantri Mudra Yojana (PMMY)

The Pradhan Mantri Mudra Yojana (PMMY) is one of the largest schemes from Government of India to provide financial assistance to small businesses, startups, and entrepreneurs. The scheme was launched in 2015 with the aim to provide easy access to credit for small business owners and entrepreneurs. The main purpose of Mudra Yojana is to provide working capital and credit line to MSME units.

Loans of up to ₹10 Lakhs can be availed under PMMY by eligible applicants which can be used for working capital requirements, purchase of machinery and equipment, etc. The repayment period for loans availed under PMMY is between 5 years and 7 years depending on the nature and purpose of the loan amount used.

Pradhan Mantri Mudra Yojana Eligibility:

• Must be a citizen of India between 18-60 years old.
• Must be an entrepreneur or small business owner registered under Micro Units Development and Refinance Agency (MUDRA)
• Should be involved in manufacturing, trading, services or any other non-farm business.

Major Benefits of PMMY:

• Financial assistance of up to ₹10 lakhs

• Low interest rates with no collateral
• Credit period of up to 5 years
• Lower and discounted interest rates for women

3. Startup India Seed Fund Scheme (SISFS)

The Startup India Seed Fund Scheme (SISFS) is a government initiative to provide financial assistance to early-stage startups for market entry, prototype development, product trials, commercialization, and proof of concept.

The scheme provides for a fund up to ₹10 to be disbursed to startups as seed funds. It is launched to support startup India initiative that mainly focuses on pre-revenue startup, helping them build their products to raise further funds in market.

Eligibility for Startup India Seed Fund Scheme

• Must not be more than 2 years old from the date of incorporation
• The startup must be DPIIT recognized
• The product/idea must be feasible, innovative, scalable, and tech-based
• Should not have raised funds more than 10 lakhs for other government schemes
• Indian promoters must hold shares greater than 51%

Major Benefits of SISFS:

• Provides seed capital Early-stage and pre-revenue startups
• Call for application around the year
• Seed capital up to ₹10 lakh for each startup
• Industry agnostic
• Incubators and acceptance across PAN India
• Physical Incubation not Compulsory
• Dedicated website for easy application and fund disbursement

4. Atal Innovation Mission (AIM)

Atal Innovation Mission is one of the largest government schemes for startups with a mandate to promote innovation and entrepreneurship across the country, with a focus on Tier-2 and Tier 3 cities. AIM provides a platform for the promotion of world-class Innovation Hubs, Grand Challenges, Sectoral Focus, other self-employment, and talent initiatives. The mission aims to provide people with easy access to information, resources, and infrastructure locally for innovation and entrepreneurship.

Atal Tinkering Labs, Innovation centers, Incubation Centers and Atal community Innovation Clusters are some of the major programs under the AIM scheme to foster research and development. The program aims to provide students with equipment like state-of-the-art computers, 3D printers, stable internet connections, etc. to promote creativity, curiosity, adaptive learning, and computational thinking.

Atal Innovation Mission Eligibility

Academic Applicants must be:

• AICTE or UGC affiliated Colleges/Universities, or
• Educational Institutions like ITIs, or
• Diploma other technical colleges.

Non-Academic applicants:

• Voluntary and organizations having exposure and experience in awareness and promotion of Science and Technology in the Country

Major benefits of Atal Innovation Mission;

• Financial Support

Up to ₹10 crore financial support for setting up world-class incubators

Up to ₹20 lakhs financial support for sector-specific innovation

Up to ₹1 crore financial support for Grand Challenges

• Provides self-employment and talent promotion through community
• 5000+ Atal Tinkering Labs for school students across the country to drive innovation and world class development
• Mentorship scheme for youth with 5100+ qualified mentors
• Easy access to information, resources, and infrastructure

5. Startup Accelerator of MeitY for Product Innovation, Development and Growth Scheme

SAMRIDH scheme helps product startups to access the Indian market and to scale their product for the global market. The scheme was introduced by the Ministry of Electronics & Information Technology to boost independent software vendors. The government scheme for startup aims to accelerate 300 startups by enhancing their product, customer connection, investor connect and international market.

The scheme also provides hand-holding support to product startups in the form of technical, regulatory, financial and market access mentoring. Unlike other schemes that provide funding and direct support to startups, SAMRIDH mainly focuses on integrating all the incubators and accelerators and giving them direct assistance.

SAMRIDH Scheme Eligibility

For Startups:

• Must be incorporated in India and the entrepreneur should be citizen of India
• Startups with innovative products in the field of software and IT
• Having a minimum viable product or a product under beta testing stage

For Accelerators:

• Must have more than 3 years in incubation operations and have supported more than 50 start-ups and at least 10 startups have received non-public investment. Or, Has dedicated accelerator programs with experience of conducting minimum 3 cohorts listed in SAMRIDH
• Should be operating inside India
• Must have necessary infrastructure and resources to carry out acceleration for startups

Benefits under SAMRIDH Startup Scheme

• Financial assistance upto ₹40 Lakh for startups
• Capital for accelerators to promote startups’ growth and build ecosystem
• Refine, enhance, and promote the software products
• Build a meetup point for venture capitalists, entrepreneurs, and mentors
• Supporting startups to trade in international and domestic markets
• Helping startups to get business through vast networks of accelerators

6. The Venture Capital Assistance Scheme

Venture Capital Assistance Scheme is the most popular government scheme for agricultural startups. Under this scheme, agriprenuers, small crop producers and farmers can receive interest free debt and OD to cover up their working capital.

This government startup scheme majorly focuses on the development of agro industry. The government has set up a fund of INR 10,000 crore under this scheme which will provide INR 2,500 crore as interest free debt financing to small and marginal farmers.

Venture Capital Assistance Scheme Eligibility:

• All small and marginal farmers
• Agri-preneurs
• Crop producers
• Proprietorship/partnership firms
• Units registered in agri-export zones
• Agricultual graduates
• Self-help teams

Benefits under Venture Capital Scheme:

• Facilitate Agri-based business setup
• Interest free debt financing from financial institutions.
• Both overdraft facility and term loan.
• Longer repayment period up to 5 years.
• Strengthen and augment the existing set up of Central and State SFAC
• Help agri-prenuers to set up agro business by arranging meets, visits and training
• Strengthen vertical ties between producers and agro projects.

7. Single Point Registration Scheme (SPRS)

The Single Point Registration Scheme (SPRS) is a government startup scheme that provides a single window system for filing tenders to Micro and Small Enterprises and startups. This scheme is administered by the National Small Industries Corporation (NSIC).

The main objective of this scheme is to ease restrictions for startups applying for government tenders. SPRS minimizes the time, requirement and cost associated with participation in government tenders.

Single Point Registration Scheme Eligibility:

• MSEs, including startup companies that have UAM or EM Part II
• Should have commenced their production
• Should not have completed one year of incorporation

Benefits of Single Point Registration Scheme:

• Easy Government Procurement from MSEs
• Preference in tender filing and allotment
• EMD (Ernest Money Deposit Exemption)
• Completely free info on tender

8. Standup India Scheme

The Standup India Scheme is a government startup scheme that encourages entrepreneurship among Scheduled Castes (SCs), Scheduled Tribes (STs) and Women by providing them financial assistance in the form of loans. This scheme was launched by the Prime Minister on 5th April 2016.

The main objective of this scheme is to promote entrepreneurship and employment generation for backward castes, tribes and women. Under this scheme, banks will provide collateral-free loans up to ₹1 Crore to at least one SC or ST borrower and one-woman borrower for setting up a greenfield enterprise. This is a first-of-its-kind scheme that aims to provide access to equitable financial support for SC/ST and Women entrepreneurs.

Standup India Scheme Eligibility:

• Must be an Indian citizen above 18 years
• Should belong to SC/ST category or Women
• Should be the first-time venture (Greenfield Project)
• Should not have defaulted on any loan from any bank or financial institution
• Trading Manufacturing or Service Sector

Benefits of Standup India Scheme:

• Collateral free loan
• Amount of loan ranging from ₹10 lakhs to one crore
• Flexible repayment time up to 7 Years
• Lowest applicable rate of interest

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In a Nutshell

Currently, India hold more than 50 Unicorn startups and Indian government is focused to add more name to the list with tax benefits, lower compliance, and better infrastructure. The government has launched several startup schemes to promote entrepreneurship and employment generation. These schemes provide funding, financial assistance, incentives, exemptions or any other to startups. Startup India Portal is the hub for all the entrepreneurs to know and avail the benefit of all these schemes.

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