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To encourage more and more entrepreneurs to establish startups in India, the Government of India comes up with various schemes from time to time. If you’re planning to register a start up business in India, or already own one, then you might benefit from this blog post wherein we discuss the list of government schemes for startups in India.
We have picked the leading government schemes for Indian startups for our list. These schemes have benefited many startups in the country by offering subsidies, tax exemption, collateral-free loans and various other perks.:
Launched: 16 January 2016
The Start Up India Initiative is one of the most popular government startup schemes. It is a flagship programme launched on 16 January 2016 by the Government of India to promote a robust ecosystem for startups and innovation within India. It aims to encourage economic growth and create job opportunities by supporting and incentivizing the budding entrepreneurs.
Under the scheme, the eligible start ups receive tax exemptions for 3 consecutive years. Additionally, it also offers exemptions on income tax and capital gains tax. Fund of Funds for Startups (FFS) of the scheme provides early-stage funding to businesses. FFS was established with a corpus of Rs. 10,000 crore, to meet the funding requirements of startups.
Launched: 2016
Atal Innovation Mission, abbreviated as AIM, is a government program that encourages innovation and entrepreneurship. The National Institution for Transforming India, a.k.a NITI Aayog, launched this programme. The aim of AIM is to create and promote a culture of entrepreneurship across every corner in the nation.
It intends to provide a platform and collaboration opportunities for different stakeholders, increase awareness and form an umbrella structure to oversee the innovation ecosystem in the nation. The AIM has been extended by the Government of India and will run until March 2028. A substantial budget has been allocated for this program.
NITI Aayog, under the Atal Innovation Mission, formulates policies for driving technological advancements and supporting the entrepreneurial ecosystems. The scheme serves as a collaborative plan for encouraging partnerships between government institutions, industries and academics to speed up the innovation process.
Launched: 6 October 2016
The GOI launched CGSS under the Startup India action plan with Rs. 2000 allocation. This scheme helps startups to access loans without needing to submit a collateral for the same.
To be eligible for the scheme, the Department of Industrial Policy and Promotion must recognize the startups. The guarantees are offered on a portfolio basis. The portfolios consist of at least 10 startup loans for a particular financial year. The credit guarantee offered will be inclusive of any other assistance such as term loans, venture capital, working capital, debentures, etc. The scheme offers up to Rs. 5 crore amount to every startup that is eligible for it.
The scheme will be providing credit to cover up to 75% of the credit facility subject to a ceiling of Rs. 150 lakh. It will cover up to 85% of the credit facility where loans amounting less than Rs. 5 lakh are granted to micro enterprises.
Launched: 1991
STP Scheme is an entirely export-oriented scheme for startups. It focuses on developing and exporting computer software, such as export of professional services through communication links on physical media.
It is a unique program that concentrates on a single industry, computer software. In order to operate globally, the program incorporates the government's concepts of 100% Export Oriented Units (EOU), Export Processing Zones (EPZ), and Science Parks/Technology Parks. The provision of single-point contact services for member units, which allows them to carry out export activities at a pace consistent with global standards, is the distinctive characteristic of the STP scheme.
Many benefits are associated with registering under the STP scheme. There is no import duty on products imported in the country under this scheme. There is exemption from specific customs to a certain extent.
Any unit registered under the system of Software Technology Parks is exempt from any form of central excise. This is applicable to the system of excise duty on software goods. Under the Section 10A of the Income Tax Act 1961, the units under STP scheme can avail income tax holiday of 10 years on export profits.
Launched: 2015
ASPIRE stands for “A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship.” The Government of India launched this scheme to support entrepreneurship and job creation. It was introduced in 2015 with the aim to build new enterprises in rural areas specifically.
The main goal of the ASPIRE scheme is to ensure rural areas have new employment opportunities. The young population of the country has out-of-box thinking and has innovative ideas. To utilize this talent, ASPIRE was launched for rural areas’ youth and to boost entrepreneurship culture. The scheme has led to the creation of multiple incubation and technology centers to encourage entrepreneurship, especially in agro-industries.
ASPIRE offers grants, loans and subsidies to rural entrepreneurs so they can establish or expand their business operations and overcome the barriers related to funding requirements. It enables the establishment of livelihood business incubators in rural and underserved sections of the country to provide support as well as mentorship to budding entrepreneurs. A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship offers training programs along with workshops to increase the technical knowledge and entrepreneurial skills of rural businessmen.
Launched: 8 April 2015
MUDRA Bank is yet another scheme that is considered one of the best startup schemes in India. It offers loans to non-banking and micro-finance institutions at a lower rate so they can grow and contribute to the economy’s growth. This scheme came into force on 8 April 2015 under the Pradhan Mantri Mudra Yojana Scheme.
The programme was first announced in the Union Budget 2015 in February month. Entrepreneurs of non-banking sectors can establish their start ups and benefit from MUDRA Bank. The bank takes care of customers by ensuring that they shall not be indebted and will responsibly lend money.
On the basis of loan amount, loans under the scheme are classified into 3 categories: Shishu, Kishor and Tarun. Shishu refers to Rs. 50,000 loan + 40% additional or extra funds. Kishor refers to loans up to Rs. 5 lac + 35% additional or extra fund. And Tarun refers to loan upto Rs. 10 lac + 25% additional or extra fund.
Small enterprises, vendors selling fruits and vegetables, shopkeepers and artisans can also borrow funds under the scheme. In order to support microfinance to the sector of microenterprises at regional/state level, MUDRA links to MFIs, Banks and many other institutions.
Launched: 24 March, 2015
The Support for International Patent Protection in Electronics & Information Technology (SIP-EIT) scheme is a Government of India initiative. The Department of Electronics & Information Technology (DeitY) manages this scheme. It is one of the top 10 start up schemes in India and is exclusively for small and medium-sized enterprises and technology start ups that file patent applications internationally.
To avail the benefits of SIP-EIT, the applicant must register as an entity under MSME Development Act 2006 or apply for company registration with RoC in accordance with the Companies Act 2013. Additionally, they must fulfill the conditions of investment in plant and machinery as required in MSME Development Act 2006. The programme encourages innovation, recognizes the value and potential of global intellectual property and captures growth opportunities in the Information and Communications Technology sector.
Benefits of SIP-EIT include reimbursement of expenses to registered entities incurred during filing and processing foreign patent applications for up to a total of Rs. 15 lakh per invention or 50% of the total expenditures incurred, whichever is less. Expenses refers to official fees paid during patent filing, examination, processing fees, attorney charges, cost of translation and expenses on search.
Launched: 2017
The Dairy Processing and Infrastructure Development Fund (DIDF) was announced in the Union Budget 2017. It helped to modernize the milk processing units and create new infrastructure. It assisted the start ups belonging to the dairy sector by providing them with access to long-term loans at concessional interest rates. In March 2024, the scheme was merged with the Animal Husbandry Infrastructure Development Fund.
Projects sanctioned under the fund before 31 March 2023 can receive continuous funding and interest subvention under Animal Husbandry Infrastructure Development Fund. DIDF improved milk processing and chilling units, increased value addition, organized market for milk producers, and employment opportunities in the project domain.
Launched: 2013
The Department of Electronics and Information Technology (DeitY) runs the Multiplier Grants Scheme, which is one of the best government schemes for entrepreneurship. The scheme intends to stimulate collaborative Research and Development (R&D) between academics, industry and research organizations.
The aim of MGS is to boost industry to partner with premier academic institutions for the development of products and packages. It establishes, nurtures and strengthens the linkages between industry and institutes. Additionally, it promotes industry oriented research and development at institutes. MGS encourages and speeds up the development of indigenous products and packages. It bridges the gap between R&D & proof of concept and commercialization & globalization.
Under MGS, the financial support provided by the government can be up to twice the amount typically provided by the industry. The industry and institutions must jointly submit the proposals for getting financial support under the Multiplier Grants Scheme.
Launched: 2003
The Government of India introduced the Single Point Registration Scheme (SPRS) in 2003 to boost the Indian start-up ecosystem. The National Small Industries Corporation (NSIC) manages SPRS. NSIC was introduced in 1955 to promote the growth and development of small industries across the nation. It is responsible for registering all micro and small enterprises under the SPRS for participation in government purchases.
Under SPRS, businesses are classified as micro, small or medium based on their investment limit for manufacturing or service sectors. Udyog aadhaar registration is granted to eligible MSME units. To obtain it, they must invest in plants and machinery (for the manufacturing sector) or invest in equipment (for the service sector).
MSEs are eligible for a number of benefits if they register through NSIC under the Single Point Registration Scheme in order to participate in government purchases. Eligible recipients will get tender sets at no cost. Additionally, micro and small businesses that qualify will need to make payment of the Earnest Money Deposit (EMD).
The best government schemes for startups in India are: Start Up India Initiative, Single Point Registration Scheme, Multiplier Grants Scheme, SIP-EIT, ASPIRE, DIDF, CGS for Start ups, AIM, MUDRA and STP Scheme. These schemes promote the growth and development of start ups and small businesses across various sectors and contribute to the country’s GDP. Connect with Registrationwala for assistance in Startup Registration.
Disclaimer: This article is based on the author’s personal opinion and may or may not represent views of the general public, institutions or organizations.
Q1.Who runs the Start Up India Initiative?
A. The Ministry of Commerce and Industry runs the Startup India initiative - one of the best govt schemes for startups. The Department for Promotion of Industry and Internal Trade is responsible for its execution.
Q2. Which financial institution was set up by the government for development and refinancing of micro units enterprises?
A. The government established the Micro Units Development & Refinance Agency (MUDRA) to support micro units enterprises.
Q3. What is the full form of the ASPIRE scheme?
A. ASPIRE scheme’s full form is “A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship.”
Q4. Which scheme allows start ups to access loans without collateral?
A. The Credit Guarantee Scheme for Startups enables start ups to access loans without needing collateral.
Q5. NITI Aayog launched which scheme in 2016 to encourage entrepreneurship and innovation?
A. In 2016, the NITI Aayog launched the Atal Innovation Mission with the aim to promote entrepreneurship and innovation in India.
Q6. Which Ministry runs the Support for International Patent Protection in Electronics & Information Technology scheme?
A. The Ministry of Electronics and Information Technology (MeitY) runs the Support for International Patent Protection in Electronics & Information Technology scheme.
Q7. What is the Startup Government Scheme?
A. The Startup Government Scheme called Startup India provides financial support, tax benefits, and mentorship to promote new startups in India.
Q8. What are some Government Schemes for New Business in India?
A. Government Schemes for New Business include initiatives like the Startup India Scheme and Mudra Yojana to assist with funding and infrastructure.
Q9. What are the Entrepreneurship Programs in India by the Government?
These programs, such as Atal Innovation Mission and NSDC, offer mentorship, funding, and skill development to foster entrepreneurship in India.
Q10. What are the leading govt schemes for entrepreneurs?
A. Some of the leading government schemes for the entrepreneurs are the Startup India Seed Fund Scheme, Pradhan Mantri Mudra Yojana (PMMY) and Stand-Up India initiative.
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