Government Schemes For Startups in India

The Union Ministry of Commerce and Industry launched Startup India on 16th January, 2016. This scheme was introduced to provide financial support and incentives to startups, which have resulted in India becoming the third-largest startup ecosystem in the world.

 

India's startup ecosystem has rapidly grown to become the third-largest globally, with over 100,000 registered startups as of 2023, up from just 350 in 2014. This represents a 300-fold increase since 2014. In 2022, 26,522 new startups were registered, a 32.6% increase from 2021. Many startups generate substantial revenue across sectors like technology, healthcare, and education.

 

A major contributor to the growth of India’s startups has been the loan schemes provided by the Indian Government. 

Here are some of the top schemes for startups launched by the Government of India: 

1. Pradhan Mantri Mudra Yojana (PMMY)

The PMMY scheme aids micro, small, and medium enterprises through collateral-free loans. There are three categories of loans under this scheme. These include:

• Shishu ranging up to ₹50,000

• Kishore ranging from ₹50,000 to ₹5 Lakhs

• Tarun extending up to ₹10 Lakhs

2. Atal Innovation Mission (AIM)

Established by NITI Aayog in 2016, Atal Innovation Mission encourages innovation and entrepreneurship through various initiatives, including the establishment of Atal Tinkering Labs in schools and Atal Incubation Centres for startups. The goal of this scheme is to create a culture of innovation by boosting creativity and problem-solving skills among students and supporting startups with mentorship and funding.

3. Stand-Up India Scheme

The government launched the Stand-Up India scheme to promote the startup culture among the marginalised and vulnerable sections of society. The scheme facilitates loan amount ranging from ₹10 Lakhs to ₹1 Crore to one borrower each from SC, ST, and women categories, setting up a greenfield enterprise.

4. Credit Linked Capital Subsidy Scheme (CLCSS)

CLCSS was introduced to provide financial assistance to small-scale industries (SSIs) for upgrading their technology. The scheme offers a subsidy of 15% on the investment made in upgrading to modern technology, thereby enhancing productivity and competitiveness in the market.

5. Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTMSE)

Launched in 2000, CGTMSE provides credit guarantees to banks and financial institutions for loans extended to micro and small enterprises. This scheme aims to encourage lending to small businesses by reducing the risk for lenders.

6. Startup India Scheme

Introduced in 2016, this program aims to build a strong ecosystem for nurturing innovation and startups in India. It offers various benefits, including tax exemptions, funding support, and easier compliance regulations, to promote entrepreneurship and facilitate startup growth.

7. Credit Guarantee Scheme (CGS)

The Government of India has also started a Credit Guarantee Scheme to provide assistance to DPIIT-recognised startups. Under this scheme, the government established a fund with a fixed corpus to extend credit guarantees on loans provided to startups by banks and NBFCs.