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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
- Register on the Startup India Portal with your details and credentials.
- We've attached the link to the picture below. Simply "click the picture below" and then sign up.
- To obtain DPIIT recognition, select "Get Recognized."
- Fill out the Section 56 Exemption application, and you should get a response from CBDT within 72 hours of submitting it.
- 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
- Simply click on the attached image below with a link, or search PMMY and launch the official Pradhan Mantri Mudra Yojana (PMMY) portal.
- Then, as shown in the image below, scroll down to select the loan you would like among the three options Shishu, Kishore, and Tarun.
- It will then ask you to download the application, carefully read it, and then download the PDF.
- Simply download the PDF, complete the form online or offline, and submit it to your nearest PMMY accepted center.
- 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.