Top 10 Government Schemes To Support

Your Startup in India

Presented by SUJEET KUMAR PAL
 Introduction
Startup India is a flagship initiative of the Government of India with the agenda to actively support startups and
entrepreneurs. The primary objective of the program is to create a strong ecosystem that nurtures and protects
innovation and startups in India, ultimately generating large-scale employment opportunities and leading to
the sustainable economic growth of the country. Subsequently, the Indian government also launched the
Aatmanirbhar Bharat mission and the ‘Make in India’ program, with the aim of transforming India into a global
manufacturing and design export hub.

Today, India boasts of being the third-largest startup ecosystem across the globe. The country has over 100
unicorns and more than 60,000 startups operating within the territory. This success can be partly attributed to
the active support provided by the Indian government to startups and entrepreneurs through its various
schemes and programs. All of the aforementioned programs were accompanied by various government
schemes and resources to provide financial assistance and working capital to startups. For instance, startups
are eligible for a variety of benefits under the Startup India Action Plan, including tax incentives and exemptions,
loans at reduced interest rates, skill development programs, prioritization of startups in public procurement, etc.
This article aims to cover few of the numerous schemes launched by the Indian government.
 1. ASPIRE – A Scheme for Promotion of Innovation, Rural Industries and
Entrepreneurship

This scheme was introduced to set up a network of technology centers and incubation centers

01.
across India with the objective to accelerate entrepreneurship and encouraging innovations for
unmet social needs in the agro-business industry. It provides financial aid for setting up
livelihood business incubators and/or technology business incubators, by way of one-time grant
of 100% (hundred percent) cost of plant & machinery (apart from land and infrastructure) or a
sum up to INR 100 (Indian rupee hundred) lakhs, whichever is less.

In India, a large portion of the population is still dependent on agriculture for their livelihood and a
substantial number of Indians live in rural areas. As such, this scheme was launched with the
purpose of generating employment and establishing enterprises in the agriculture industry. It
provides knowledge to entrepreneurs for establishing their own businesses, to emerge as
employers, and to ensure their self-sustainability. This program intends to foster district-level
economic growth from the ground up.
2. Pradhan Mantri Mudra Yojana

Under this scheme, Micro Units Development and Refinance Agency Ltd. (“MUDRA”) is an

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non-banking financial company which supports development of micro enterprise sector in
India. MUDRA provided refinance support to banks and/or microfinance institution for
lending to micro units who have loan requirement up to INR 10 (Indian rupee ten) lakhs.
The loans have been divided into categories of Tarun, Kishore, and Shishu, depending on
the stage of development, funding needs and age of the business and the amount of loan
that can be availed by these businesses. There is no collateral security for these assets
and loans up to INR 10 (Indian rupee ten) lakhs can be provided to small businesses which
are non-corporate and non-farm micro or small enterprises. This loan is granted for a
variety of activities which provide income generation and employment creation. It is mostly
offered to street vendors, store owners, traders, and other service providers. Additionally,
working capital, travel vehicle, and working capital loans are offered. Thus, it is a unique
scheme that is devised to empower Indian entrepreneurs.
 3. Support for International Patent Protection in Electronics and
Information Technology (SIP-EIT)

The SIP-EIT scheme was launched by the Department of Electronics

and Information Technology (“DeiTY”) with the aim of providing
government funding to technology startups and Micro Small and
Medium Enterprises (“MSME”) in India for filing international
patents. This encourages innovation, builds brand recognition, and
recognizes the importance and potential of having global
intellectual property protection. The financial assistance is provided
to the information communication technologies and electronics
sector. The eligible entities can apply for this scheme at any stage
of the international patent filing process. The reimbursement limit
is set at either 50% (fifty percent) of the total expenses incurred
during filing and processing of the application, or INR 15 (Indian
rupee fifteen) lakh for every invention, whichever is lesser.
 4. Multiplier Grants Scheme (MGS)

This scheme was again launched by DeitY with the objective of

encouraging industries to collaborate with premier academic and
government R&D institutions for the development of packages and
products. This would strengthen the link between industries and
institutes, accelerate the development of indigenous products and
packages, and bridge the gap between proof-of-concept and
globalization. Under this scheme, if an industry supports the R&D of
products that are capable of commercialization, the government
would provide funding up to twice the amount provided by that
industry. The grant amount for an individual industry is restricted to
2 (two) crores per project and the preferred duration of each project
is less than 2 (two) years. For a consortium of industries, the
granted limit is 4 (four) crores with the duration of 3 (three) years.
 5. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

To implement the Credit Guarantee Fund Scheme for Micro and Small Enterprises
(“MSE”), the Ministry of MSME, the Government of India, and the Small Industries
Development Bank of India (“SIDBI”), established the Credit Guarantee Fund Trust for
Micro and Small Enterprises (CGTMSE). This scheme strengthens the credit delivery
system and facilitates flow of credit in the MSE sector. It provides loans at highly
subsidized rates and with zero collateral to startups, small-scale industries, and micro-
level businesses. The scheme covers fund and non-fund-based credit facilities up to Rs.
200 lakhs for every eligible borrower and the funds are dispersed by the SIDBI. The
scheme is primarily for service or manufacturing businesses and the loan can be availed
in the form of a term loan or working capital.
 6. Single Point Registration Scheme (SPRS)

SPRS is a developmental scheme managed by the National Small Industries Corporation (NSIC) for
supporting MSE. Undoubtedly, the Indian government is the single largest purchaser of a large array of
goods. The objective behind this scheme was to increase the number of purchases from the small-scale
sector. By opting for this scheme, NSIC registers the eligible MSEs for participation in government
purchases without any Earnest Money Deposit (EMD), which is the money taken from bidders before they
place any bid, as a security deposit for ensuring their seriousness in the project. Thus, under SPRS, MSEs
having an NSIC registration will be exempt from paying the EMD.. Further benefits include advantages in
tender participation, free of cost tender, and procurement from MSEs. As an additional benefit, 358 (three
hundred and fifty-eight) categories of goods are reserved for being purchased exclusively from the MSEs
and the government has also prescribed a minimum limit of 25% of the total yearly purchases made by
central ministries, departments, and public sector undertakings from MSEs only.
 7. Extra Mural Research or Core Research Grant (CRG)

CRG was originally named Extramural Research

funding scheme. It was launched more than four
decades ago, after the establishment of the Science
and Engineering Research Board (“SERB”) but
continues to be one of the most relevant and useful
schemes. The objective of CRG is to help research
labs, academic institutions and other R&D
organizations carry out research in all frontier fields of
science and engineering. Thus, it encourages
upcoming and eminent scientists for an individual-
centric competitive method of research funding.
 8. High Risk and High Reward Research
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This scheme aims to support and invite new ideas and proposals
which carry the potential to have a broad impact in the domains of
30 science and technology. It lays emphasis on proposals that are new
and risky, but if successful, can be highly rewarding for the field of
science. Such proposals may include theoretical and experimental
20 advances, challenges to existing hypotheses, scientific
breakthroughs, an ‘out of the box’ solution for an important
problem, or the formulation of a new hypothesis that brings about
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new technologies. There is no prescribed budget limitation for
these projects and the research grant shall cover consumables,
contingencies, equipment, and travelling costs apart from the
overhead grants. The funding is provided for 3 (three) years which
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Option A Option B Option C Option D may be extended to 5 (five) years in exceptional cases.
 9. Design Clinic Scheme

The Indian government has recognized the importance of innovation and design in the growth of
any brand and decided that every MSME and startup should build a design-centric approach for
fueling their startup. In order to encourage small businesses to experiment with new and innovative
designs for their goods, the Ministry of MSME established the Design Clinic scheme to create a
sustainable design eco system through ongoing training and skill development. Under this scheme,
the government shall extend up to INR 60,000 (Indian rupee sixty thousand) for attending seminars
on design and up to INR 3.75 lakhs or 75% (seventy-five percent) of the seminar’s cost, where the
seminar is conducted by the startup or MSME. By virtue of this program, it is expected that
entrepreneurs and leaders would get an opportunity to learn about the latest practices and trends
pertaining to designs, network with other innovators and designers, learn design theories and
increase the local competitiveness of their products using designs.
 10. Zero Defect Zero Effect (ZED) scheme

This mission seeks to motivate manufacturers to create better

products, have zero defects and high quality, as the name suggests. It
is a handholding scheme that provides an opportunity to MSMEs to
embrace world-class manufacturing processes, use new technology
and consistently improve their products. The scheme provides tools,
technology as well as financial assistance to startups and MSMEs for
ensuring zero defects in their goods. ZED also offers a holistic
certification, assesses enterprises for ZED, and supports startups in
climbing up the maturity assessment model of the scheme.
 Conclusion

The schemes discussed in this article serve a twofold purpose: they support and benefit the existing
startups and businesses while also inspiring and encouraging budding entrepreneurs, students, and
leaders from every domain to launch their own businesses and take another step towards an
Aatmanirbhar Bharat. The vision is to enable the talent of India to dream of new ideas, implement them
and ultimately, convert them into a successful and thriving business. These initiatives have proved to
be quite successful in their objective, with India ranking number 3 (three) in the list of the world’s
highest number of startups.