If you've always dreamt of starting your own business but lacked the necessary funding, worry no more. The Indian government has introduced the Startup India Scheme to support aspiring entrepreneurs like you.
Startup India Scheme Explained
Since 2016, the Startup India scheme has provided financial support to individuals and organizations looking to launch or propel their businesses. Through this scheme, Indian startups get loans and subsidies to promote job creation and economic growth in India.
Here are the top 10 Startup India schemes that entrepreneurs should know about:
Startup India Seed Fund Scheme
Introduced by the Indian government on January 16, 2021, this scheme targets early-stage startups. With a total budget of ₹945 Crores, it funds around 3600 businesses and 300 incubators. The selected entrepreneurs can receive funding of up to ₹5 Crores, along with grants for concept development and product/service growth. Read more here.
Startup India Initiative
Launched by the Prime Minister on January 16, 2016, the Startup India Initiative aims to promote and support startups through tax benefits and other incentives. Over 50,000 firms have already benefited from this scheme, with extended age limits for startups and biotechnology companies. It remains one of the most impactful government-sponsored programs for startup owners. See if you are eligible for a Startup India Initiative.
Multiplier Grants Scheme (MGS)
The Multiplier Grants Scheme (MGS) encourages research and development (R&D) partnerships between academia, institutions, and industry for the production of innovative products and services. Under this scheme, the government provides financing of up to ₹2 Crores for each project, with a project duration of fewer than two years.
Aatmanirbhar Bharat App Innovation Challenge
Launched on July 4, 2020, this program encourages Indian startups to collaborate and develop innovative solutions with global relevance. Prime Minister Narendra Modi urged tech and startup firms to participate in this challenge by creating cutting-edge mobile applications. The winners of the challenge received financial rewards.
Atal Innovation Mission (AIM)
Initiated in 2016 by NITI Aayog, the Atal Innovation Mission aims to foster an entrepreneurial and innovative culture in India. It supports innovation by creating programs and policies in various economic sectors. Selected firms can receive funding of up to ₹10 Crores over a five-year period, with a focus on sectors like health, agriculture, transportation, and education.
Credit Guarantee Fund Trust for Micro and Small Enterprises
The Credit Guarantee Fund Trust for Micro and Small Enterprises is designed to offer collateral-free business loans to MSME firms. It aims to provide affordable loans with discounted interest rates to promote the establishment and revitalization of businesses. The government collaborates with the Small Industries Development Bank of India (SIDBI) to offer loans up to ₹100 Lakhs.
The eBiz Portal is an online platform that facilitates government-to-business collaboration (G2B) and offers a user-friendly environment for businesses. Developed by Infosys, this platform serves as a communication hub for investors and entrepreneurs in India. Initially launched in five states, the government plans to expand its services gradually.
Software Technology Park (STP)
The Software Technology Park (STP) is an export-oriented system aimed at increasing the export of computer software and technical services. It focuses on promoting computer software businesses through dedicated courses and infrastructure. This government initiative draws inspiration from Export Processing Zones (EPZ) and Science/Technology Parks around the world.
Dairy Processing and Infrastructure Development Fund (DIDF)
To support the competitiveness of dairy cooperatives for the long-term benefit of farmers, the Indian government established the DIDF with a total budget of ₹11,184 Crores. This scheme benefits milk-producing businesses, multi-state milk cooperatives, and state dairy federations by providing financial assistance.
Micro Units Development Refinance Agency (MUDRA) banks aim to enhance the availability of loans and promote the growth of small businesses in rural areas. They provide loans up to ₹10 Lakhs to microenterprises, excluding farms and corporations. The loans are categorized as Tarun, Shishu, and Kishor based on their amounts.
India is witnessing the rise of talented entrepreneurs and a thriving business ecosystem. The government has introduced these schemes to inspire startups and students across all academic disciplines, aligning with the Atmanirbhar Bharat vision. These programs play a crucial role in fostering the growth of the Indian startup ecosystem.
Unfortunately, not everyone is eligible for these schemes. Thus, you can also explore other equity-free and debt-free startup investment opportunities, such as joining international startup accelerators.
Frequently Asked Questions
How do startups make money?
Many startups are not profitable and generate money through investments to support their growth. Most startups use a subscription model as the monetization strategy, but it is usually not enough. Most startups have an exit strategy where they plan to get acquired by a larger company. There are exceptions, of course.
Which is the best startup in India?
India has a lot of great startups, so we can't identify the single best startup. As of 2023, the following startups seem to perform the best: CRED, Vernacular.ai, PharmEasy, Digit Insurance, Meesho, Groww, Nykaa, Udaan, Dream11, Swiggy, Instamojo, PostMan, and more!
What is the Startup India scheme?
Prime Minister Narendra Modi launched the Startup India scheme on August 15, 2015, to empower the growth of startups in India. It is a flagship initiative of the Indian government to provide financial aid to startups to build an inclusive ecosystem for innovation and entrepreneurship in the country.
Who is eligible for the Startup India scheme?
To be eligible for the Startup India scheme, individuals must be above 18 years of age, and their company should be a private limited entity or a partnership. Additionally, the company's annual turnover must not exceed INR 100 crore (approximately USD 14 million).