The Ultimate Guide to Indian Government Schemes and Incentives for Startups

This article is a valuable resource for entrepreneurs seeking to leverage government support for their ventures.

Government schemes and incentives for startups in India

Here are some prominent government schemes and their associated benefits for building a startup in India. This will be useful in several areas, including financial advisory, funding, and legal elements of startup launch in India; read carefully.

Startup India Initiative

The Startup India Initiative, launched by Prime Minister Narendra Modi in 2016, is the best government scheme in India for startups. It has so far helped 50,000+ startups in India with its comprehensive set of leadership and skill-building ebooks, courses, and mentorship programs.

Benefits of Startup India Initiative

• Self-certification in line with labor and environmental legislation.
• Tax relief as well as cost reductions.
• Easy learning of business operations in 90 days, with fast-track patent registration and an 80% fee rebate.

Eligibility Criteria for Startup India Initiative

• Startups should not have made over INR 100 crores in prior fiscal years.
• The startup should be a registered partnership, private limited company, or limited liability partnership (LLP).
• The startup must apply within ten years of its formation date, or it will be rejected.
• The startup must seek to improve an established product or provide an essential innovation to society. Its services must potentially increase employment and wealth; reconstruction or existing businesses are not eligible.

How to apply for Startup India Initiative

1. Register on the Startup India Portal with your details and credentials.
2. We've attached the link to the picture below. Simply "click the picture below" and then sign up.
3. To obtain DPIIT recognition, select "Get Recognized."
4. Fill out the Section 56 Exemption application, and you should get a response from CBDT within 72 hours of submitting it.
5. There are several links on the Startup India Portal's landing page; peruse them according to your preferences and needs.

Pradhan Mantri Mudra Yojana

PM Modi launched the Pradhan Mantri Mudra Yojana for Micro Units Development and Refinance Agency Banks, or MUDRA banks, which lend to micro-finance entities and non-banking financial institutions with low-interest loans.

This scheme hosted by PM Modi for startups in India has allocated loans of up to INR 10 lakhs.

Benefits of Pradhan Mantri Mudra Yojana

• It facilitates easy access to finance for micro-enterprises with reduced interest expense.
• It takes a credit-plus strategy and encourages employment generation and higher GDP growth.
• It strongly encourages the development and growth of mass entrepreneurship.

Eligibility for Pradhan Mantri Mudra Yojana

Anyone from India who is an official citizen and has a business plan or a non-farm income-generating endeavor such as trading, manufacturing, etc., service sectors that requires a credit of up to INR 10 lakhs can contact a Bank, NBFC, or MFI under MUDRA loans under Pradhan Mantri Mudra Yojana and apply for the scheme.

How to apply for Pradhan Mantri Mudra Yojana

1. Simply click on the attached image below with a link, or search PMMY and launch the official Pradhan Mantri Mudra Yojana (PMMY) portal.
2. Then, as shown in the image below, scroll down to select the loan you would like among the three options Shishu, Kishore, and Tarun.
3. It will then ask you to download the application, carefully read it, and then download the PDF.
4. Simply download the PDF, complete the form online or offline, and submit it to your nearest PMMY accepted center.
5. The form will guide you to the best possible PMMY centers near you.

Credit Guarantee Trust Fund for Micro & Small Enterprises

Credit Guarantee Trust Fund for Micro and Small Enterprises (CGTSME) is one of the largest Startup Loan Schemes established by the Ministry of MSME India, providing eligible startups and MSMEs with a collateral-free loan of up to INR 1 crore.

Benefits of Credit Guarantee Trust Fund for Micro & Small Enterprises

• Collateral-free assurance is offered in addition to principal security for credit facilities provided to borrowers.
• It covers amounts ranging from INR 10 lakhs to INR 1 crore if the startups adhere to the eligibility requirements and standards.
• It can also be non-fund-based, allowing you to stake equity in your company instead of repayment.
• Special program within the scheme for women empowerment WOE MSE with a loan of up to INR 50 lakhs with an 80% guarantee cover.

Eligibility for Credit Guarantee Trust Fund for Micro & Small Enterprises

• The startup must be a new idea; for existing startups, it must not have a volume of more than INR 25 crores.
• It suggests that weak projects do not apply because they do not guarantee an investment return.
• It restricts service-based sectors such as retail, education, and so on.
• Only registered startups are accepted.
• The scheme is only available to Indian banks and NBFCs in the MSE sector.

How to apply for Credit Guarantee Trust Fund for Micro & Small Enterprises

The application process is a little complicated. The first and most important requirement is a PITCH about your startup and how it intends to solve a problem or provide a solution that can benefit welfare, society, and profit.

1. Select the bank you want to collaborate with from the list of 26 public sector banks, 21 private sector banks, and even institutions to help you avail of the scheme.
2. Launch (1) and navigate all concepts related to the scheme in this link.
3. If you are looking for an NBFC loan, click the dedicated link on the landing page above achievements, or if you are looking for a BANK loan, click the dedicated link above achievements.
4. Only two options are stated in the eligibility criteria, as shown in the above image NBFC and BANK.
5. You will now see a list of documents in the dedicated field; simply download it, organize and fill out the documents as prompted and provided, and then submit it to the selected bank.
6. The bank will review the application and, if granted, will transmit it to the trust (CGTMSE); if the trust also approves, your loan will be disbursed.

Startup India Seed Fund

Startup India Seed Fund is the government of India's effort to promote the growth of entrepreneurship in India, supporting startups with characteristics such as proof of concept, development, market-entry, commercialization, and prototyping.

The scheme aims to make it simpler for startups to compete with India's megacorporations and to create an optimal environment for new startups and them to avail investments. It ensures that startups have no trouble establishing their venture.

Benefits of Startup India Seed Fund

• The scheme provides financial assistance of up to INR 50 lakhs to early-stage startups through incubators.
• The government of India has allocated INR 945 crore for this initiative, which would be used for proof of concept, development, prototype, and other purposes.
• The government sponsors incubators, which then fund startups.

Eligibility for Startup India Seed Fund

• The Department must register the startup applying for this scheme for Promotion of Industry and Internal Trade and have been in operation for a maximum of two years and below at the time of application.
• It prioritizes entrepreneurs developing new solutions in sectors such as social impact, financial inclusion, education, food processing, and so on, all service sectors.
• The registering startup must not have received more than INR 10 lakhs in monetary help from any other government of India scheme.

How to apply for Startup India Seed Fund

1. The application process is simple; click the image below to access the registration page.
2. Once accessed, click the obvious "Apply Now" button, and you will be provided with two options for incubators and startups. Choose your criteria and register with your credentials.
3. Upload all required documents and fill out the content information as needed.
4. Fill out the application form again and click "save the profile." The application will be sent to the administrator.
5. The processes outlined above apply to both companies and incubators. However, please follow the instructions and fill in the details as required.

A Scheme for Promotion of Innovation, Rural Industries, and Entrepreneurship

A big name and a major scheme that was implemented by the Government of India in 2015 to improve the social and economic elements of life in rural India, making it one of the most acclaimed schemes launched by the government of India.

The Ministry of MSME introduced the ASPIRE scheme.

It established a network of technology and incubation centers to foster innovative thinking and entrepreneurship in the agro-sector, as agriculture still provides a living for a substantial portion of India's population.

Benefits of A Scheme for Promotion of Innovation, Rural Industries, and Entrepreneurship

• It helps to create new jobs by encouraging entrepreneurship.
• It fosters underserved and neglected solutions for societal needs while highly facilitating new business concepts.
• It provides appropriate training for the youth regarding skill development and entrepreneurship and encourages much-needed economic growth at the district level.
• The primary goal of this scheme is to increase the value of agricultural products by automating agricultural processes and investing heavily in startups to improve rural development.
• It also provides aspiring entrepreneurs with financial facilitation, business resource networking, and practical business experience.

Eligibility for A Scheme for Promotion of Innovation, Rural Industries, and Entrepreneurship

• Everyone over 18 who wants to be trained for an incubator is eligible, as is any entrepreneur interested in founding a startup in India.
• This scheme is open to any technical institute or university in the rural or agro-based sectors.
• Any private enterprise operating under the PPP model can establish an LBI, and existing incubators can apply for this scheme.
• Incubators that have received prior government subsidies for the same set of operations under incubation are not eligible.

How to apply for A Scheme for Promotion of Innovation, Rural Industries, and Entrepreneurship

1. The application procedure is simple: a registration application must be sent to the official website of ASPIRE (2) "click the attached link."
2. It is then forwarded to the Ministry of MSME, and the Scheme Steering Committee is in charge of overall policy, management support, and application process coordination.
3. If the application meets the eligibility and standards, the ASPIRE program efficiently aids the applicant.
4. Include all relevant documentation regarding your company's operations, plans, pitches, new ideas, etc.

As we investigate more categories and Government schemes for startups in India, we will keep you current on other policies that will help you benefit the most and launch a startup in India with a full-fledged plan in every possible manner.