List of Government Schemes To Support Startups In India

India is gradually moving towards the startup ecosystem. Therefore, in order to boost entrepreneurship, the government has created an entire ministry dedicated to helping new businesses. The ruling party has introduced many schemes to promote entrepreneurship and assist emerging startups financially.

Take up one idea. Make that one idea your life, think of it, dream of it, live on that idea, let the brain, muscles, nerve, every part of your body be full of that idea and just leave every other idea alone. This is the way to success.
- Mr Narendra Modi, Prime Minister of India

Here's a list of government schemes launched for developing and encouraging entrepreneurship in India:

Startup India Initiative

Startup India Initiative | Government Schemes for Startup Companies in India

The Prime Minister of India launched the Startup India Initiative in the year 2016. It changed the definition of a startup in terms of the scale and the horizon. The idea is to increase wealth and employability by giving wings to the entrepreneurial spirit. The government given startups tax benefit under this scheme and 798 applicants made use of the tax break. The Department of Industrial Policy and Promotion is maintaining this initiative and is treating it as a long term project. Moreover, the overall age limit for startups has increased from two years to seven years. And for biotechnology firms, the age limit is ten years from the date of incorporation. It is one of the best Indian government startup schemes for entrepreneurs as it is providing several policies for entrepreneurship programs.


Aspire | Small Business Ideas for Rural Areas in India

The government has made continuous efforts to improve the social and economic aspects life in rural areas of India. Since 56% of the Indian population lives in the rural areas, the government is promoting entrepreneurship and innovation in this sector. The ASPIRE scheme aims at increasing employment, reducing poverty, and improving innovation in rural India. However, the main idea is to promote the agro-business Industry. The Ministry of Medium and Small Enterprises has tried to get economic development at the grassroots level. The total budget plan is of Rs. 62.5 crores for the years 2014-2016.

Also read: Startup Hubs in India


Mudra Bank | Government Funding Schemes for Startups in India

Micro Units Development Refinance Agency (MUDRA) Bank has been created to enhance credit facility and boost the growth of small business in rural areas. The government has introduced this scheme to support small business in India. In 2015, the government allocated 10,000 crores to promote startup culture in the country. The MUDRA banks provides startup loans for Rs. 10 lakh to small enterprises, business which are non-corporate, and non-farm small/micro enterprises. It comes under Pradhan Mantri Mudra Yojana (PMMY) which was launched on 8 April 2015. The loans have been categorized into Tarun, Kishore, and Shishu. The assets are created through the bank’s finance and there is no collateral security.

Ministry Of Skill Development and Entrepreneurship

Government Support for Startups & Entrepreneurs in India

This task of promoting entrepreneurship was earlier given to different departments and government agencies. In 2014, the Prime Minister decided to dedicate an entire ministry to build this sector as he felt that skill development required more push from the government's side to promote and encourage it among the people. Furthermore, the idea is to reach 500 million people by the year 2022 by providing gap funding and skill development initiatives.

3 minute video explaining everything about Skill India Mission

Atal Innovation Mission

Atal Innovation Mission | Initiatives for Entrepreneurship development

In the budget of 2015, the government established the Atal Innovation Mission (AIM) with the name coming from the Former Prime Minister of India, Atal Bihari Vajpayee. The Atal Innovation Mission was established to provide a promotional platform which will involve academicians and draw upon national and international experiences to foster a culture of innovation, research, and development. The government allocated AIM about Rs. 150 crores in the year 2015.

eBiz Portal

eBiz Portal | Government Schemes for Startup Projects in India

This is the first electronic government-to-business(G2B) portal. The main purpose of the portal is to transform and develop a conducive business environment in the country. The eBiz portal was developed by Infosys in a public-private partnership model. It is a communication center for investors and the business communities in India. The portal has launched 29 services in 5 states of India, viz., Andhra Pradesh, Delhi, Haryana, Maharashtra, and Tamil Nadu. The government will add more services to the scheme in the future.

Dairy Processing and Infrastructure Development Fund (DIDF)

DIDF | Startup India Initiative

National Bank for Agriculture and Rural Development (NABARD) is an apex development bank in India. The Government of India had a announced creation of Dairy Processing and Infrastructure Development Fund under NABARD with a total corpus of Rs. 8000 crore over a period of 3 years (i.e. 2017-18 to 2019-20) in the Union Budget of 2017-18 for the sustained benefit of farmers.

Milk Unions, Multi-state Milk Cooperatives, State Dairy Federations, Milk Producing Companies, and NDDB subsidiaries meeting the eligibility criteria under the project can borrow loan from NABARD. The Loan component would be 80% (maximum rate) and the end borrower's contribution of 20 % (minimum rate). The end borrowers will get the loan at 6.5% per annum interest. The period of repayment will be 10 years with initial two years moratorium. The respective state government will be the guarantor of loan repayment. Also for the project sanctioned if the end user is not able to contribute its share in the scheme, the state government will contribute.

Also read: Rise and Fall of Doodhwala- A Milk Delivery Startup

Support for International Patent Protection in Electronics & Information Technology (SIP-EIT)

SIP-EIT | Startup Schemes in India

The Department of Electronics and Information Technology (DeiTY) has launched a scheme entitled “Support for International Patent Protection in E&IT (SIP-EIT)”. This scheme provides financial support to MSMEs and Technology StartUp units for international patent filing.

Features and benefits of the SIP-EIT scheme are:

  • Financial support is provided for international filing in Information Communication Technologies and Electronics sector.
  • The Reimbursement limit has been set to the maximum of Rs. 15 Lakhs per invention or 50% of the total charges incurred in filing and processing of a patent application, whichever is lesser.
  • SEP-EIT scheme can be applied at any stage of international patent filing by the applicant.

Multiplier Grants Scheme (MGS)

MGS | Government Grants for Startups in India

Department of Electronics and Information Technology (DeitY) started the Multiplier Grants Scheme (MGS). The scheme aims to encourage collaborative Research & Development (R&D) between industry and academics or R&D institutions for development of products and packages. Under the scheme, if the industry supports R&D for development of products that can be commercialized at institution level, then government will also support them financially which will be up to twice the amount provided by industry. MGS promotes and expedites development of aboriginal products and packages. The government grants would be limited to a maximum amount of Rs. 2 Crores per project and the duration of each project could considerably be less than 2 years. It would be Rs. 4.0 Crores and 3 years for industry associations.

Credit Guarantee Scheme for Startups (CGSS)

The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE ) was set up by the government of India to provide business loans to micro and small industries, and startup business with zero collateral. It allows the new and upcoming startups to avail the loans at highly subsidised interest rates without providing any security. Working along with SIDBI (Small Industries Development Bank of India), the government provides a maximum amount of up to Rs. 100 lakhs under this scheme for boosting new enterprises as well as rehabilitating the existing ones. Primarily for manufacturing units, this loan can be availed in the form of working capital or term loan.

Software Technology Park (STP) Scheme

The Software Technology Park (STP) scheme is a totally export oriented Scheme for the development and export of computer software. This includes the export of professional services using communication links or media.

This scheme is unique in its nature as it focuses on only one sector, i.e., computer software. The scheme integrates the government concept of "100% Export Oriented Units" (EOU), "Export Processing Zones" (EPZ), and the concept of Science Parks or Technology Parks as operating elsewhere in the world. The sales in the Domestic Tariff Area (DTA) shall be permissible up to 50% of the export in value terms. STP gives total depreciation on capital goods over a period of five years.

The Venture Capital Assistance Scheme (VCA)

The Small Farmer’s Agri-Business Consortium (SFAC) has launched the scheme named Venture Capital Assistance (VCA) Scheme for the welfare of farmer-entrepreneurs to develop their agri-business which is approved by the banks and financial institutions regulated by the RBI. This government scheme intends to assist in the form of the term loan to the qualifying projects of the farmers to meet their capital requirements for the implementation of the project. VCA promotes training and visits of agri-entrepreneurs in setting up agribusiness projects.

The quantum of loan will be 26% or 40% (for hilly regions) of the promoter’s equity. The maximum amount of loan provided under this scheme will be Rs.50 lakhs.

Loan For Rooftop Solar Pv Power Projects

Loan for Rooftop Solar Projects | Government Support for Entrepreneurs in India

To get more non-conventional power, the government of India has set a challenging target to set up 40,000 MWp of Grid-Interactive Rooftop Solar PV Plants during the next five years. These rooftop solar PV plants will be set up in residential, commercial, industrial, and institutional sectors in the country ranging from 1 kWp to 500 kWp capacity. Such rooftop plants are economically viable for the companies as they produce clean electricity from the solar energy at about Rs. 7.0 per kWh without any subsidy. The government also provides a subsidy of 15% on these plants to the associations or individual companies which makes it further attractive and viable.

NewGen Innovation and Entrepreneurship Development Centre (NewGen IEDC)

NewGen IEDC is a startup program launched by the National Science and Technology Entrepreneurship Development Board under the Department of Science and Technology, Government of India. This programme aims to inculcate the spirit of innovation and entrepreneurship among the science and technology youth, support and encourage the startup creation through proper guidance, mentorship and support. NewGen IEDC directs the energy and the knowledge of the youth towards the purpose of being active partners in the economic development process.

The NewGen IEDC programme is a five-year programme that would be implemented in an educational institution. The NewGen IEDC programme will support maximum of 20 new projects.

Single Point Registration Scheme

SRPS | Indian Government Schemes for Startup Business

The Single Point Registration Scheme (SPRS) is a startup scheme which was launched in 2003. It is managed by the National Small Industries Corporation (NSIC). NSIC registers all Micro & Small Enterprises (MSEs) in India under this Single Point Registration Scheme to participate in government purchases.

Enterprises are classified as Micro, Small & Medium based on the limit of investment for the manufacturing or service sector. Eligible MSME units are provided with Udyog Aadhar registration certificate. All Central Ministries/Departments /PSUs shall set an annual goal of minimum 20% of total annual purchases of products produced or rendered by MSMEs. For exclusive purchase from MSMEs, about 358 items are reserved.

Modified Special Incentive Package Scheme (M-SIPS)

The government of India has approved a special incentive package to promote large-scale manufacturing in the Electronic System Design and Manufacturing (ESDM) sector. The scheme is called the Modified Special Incentive Package Scheme (M-SIPS).

Under M-SIPS, the Indian government will provide subsidy of 20 percent on capital investments in special economic zones (SEZs) and 25 percent on capital investments in non-SEZs for individual companies. It also provides for re-imbursement of CVD/excise for capital equipment for the non-SEZ units. For high technology and high capital investment units like fabs, re-imbursement of central taxes and duties is also provided. The incentives are available for investments made in a project within a period of 10 years from the date of approval.

Also read: List of Startups in Delhi


The government is promoting these schemes not only to increase the number of people who are benefitting from them but also to highlight the work they have done in the last 5 years. These initiatives have been introduced for the development of the Indian startup ecosystem. India seems to be heading towards the era of entrepreneurship. In the next 10 years, India may host as many successful startups as the USA or any other leading nation.

Read more: 2018 list of top 50 richest people in India

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