BUSINESS MANAGEMENT & STARTUPS

I Semester - NEP

Module No. 5: Government Initiatives for Startups in India ( 10 Hrs )

Government Initiatives – Startup India Initiative, Seed Fund – ASPIRE –SAMRIDDHI Scheme –
Mudra
Scheme (Sishu, Kishore & Tarun) – ATAL Innovation Mission – MSME Multiplier Grants Scheme –
Credit Guarantee fund trust for micro & small business – Software Technology Park – Venture Capital
Assistance Scheme – Single Point Registration scheme – M-SIPS – Self Employment & Talent
Utilization (SETU)

Introduction

Startup India Initiative

Startup India is a flagship initiative of the Government of India, intended to catalyse startup culture and
build a strong and inclusive ecosystem for innovation and entrepreneurship in India.
Launched on 16th January, 2016, the Startup India Initiative has rolled out several programs with the
objective of supporting entrepreneurs, building a robust startup ecosystem and transforming India into
a country of job creators instead of job seekers. These programs are managed by a dedicated Startup
India Team, which reports to the Department for Industrial Policy and Promotion (DPIIT).

Benefits provided under Startup India

1. Simple process: The government of India has launched a mobile app and a website for easy
registration for startups. Anyone interested in setting up a startup can fill up a simple form on
the website and upload certain documents. The entire process is completely online.

2. Reduction in cost: The government also provides lists of facilitators of patents and trademarks.
They will provide high-quality Intellectual Property Right Services including fast examination
of patents at lower fees. The government will bear all facilitator fees and the startup will bear
only the statutory fees. They will enjoy 80% reduction in the cost of filing patents.

3. Easy access to Funds: A 10,000 crore rupees fund is set-up by government to provide funds to
the startups as venture capital. The government is also giving guarantee to the lenders to
encourage banks and other financial institutions for providing venture capital.

4. Tax holiday for 3 Years: Startups will be exempted from income tax for 3 years provided they
get a certification from Inter-Ministerial Board (IMB).

5. Apply for tenders: Startups can apply for government tenders. They are exempted from the
“prior experience/turnover” criteria applicable for normal companies answering to government
tenders.

6. R & D facilities: Seven new Research Parks will be set up to provide facilities to startups in the
R&D sector

7. No time-consuming compliances: Various compliances have been simplified for startups to

save time and money. Startups shall be allowed to self-certify compliance (through the Startup
mobile app) with 9 labour and 3 environment laws.
 8. Tax saving for investors: People investing their capital gains in the venture funds setup by the
government will get exemption from capital gains. This will help startups to attract more
investors.

9. Choose your investor: After this plan, the startups will have an option to choose between the
VCs, giving them the liberty to choose their investors.

10. Easy exit: In case of exit – A startup can close its business within 90 days from the date of
application of winding up

11. Meet other entrepreneurs: The government has proposed to hold 2 startup fests annually both
nationally and internationally to enable the various stakeholders of a startup to meet. This will
provide huge networking opportunities.

STARTUP INDIA INITIATIVES

1. Pradhan Mantri Mudra Yojana
MUDRA Loan is offered under the Pradhan Mantri Mudra Yojana (PMMY). MUDRA stands for
Micro-Units Development and Refinance Agency. Under this scheme, borrowers can avail business
loans ranging from Rs.50,000 to Rs.10 lakh on the basis of the Shishu, Kishor, and Tarun categories.

2. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Small Industries Development Bank of India (SIDBI) and Ministry of Micro, Small and Medium
Enterprises
The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) was launched by the
Government of India (GoI) to make available collateral-free credit to the micro and small enterprise
sector. Both the existing and the new enterprises are eligible to be covered under the scheme.

3. Zero Defect and Zero Effect (ZED)

The scheme envisages promotion of Zero Defect and Zero Effect (ZED) manufacturing amongst
MSMEs and ZED Assessment for their certification with the following objectives:
• To promote adaptation of Quality tools/systems and Energy Efficient manufacturing.
• To encourage MSMEs to constantly upgrade their quality standards in products and processes.
• To drive manufacturing with adoption of ZeroDefect production processes and without
impacting the environment.

4. Credit Linked Capital Subsidy Scheme for Technology Upgradation

The objective of the Scheme is to facilitate technology up-gradation in MSEs by providing an upfront
capital subsidy of 15 per cent (on institutional finance of upto Rs 1 crore availed by them) for induction
of well-established and improved technology in the specified 51 sub-sectors/products approved.

In other words, the major objective is to upgrade their plant & machinery with state-of-the-art
technology, with or without expansion and also for new MSEs which have set up their facilities with
appropriate eligible and proven technology duly approved under scheme guidelines. The Scheme is a
demand driven one without any upper limit on overall annual spending on the subsidy disbursal.

5. The Design Clinic Scheme for MSMEs

Ministry of Micro, Small and Medium Enterprises
Design Clinic Scheme for Design Expertise to MSME manufacturing sector.
The main objectives of the scheme are:
1. To create a sustainable design eco system for the MSME sector through continuous learning
and skill development
2. Bring the industrial design fraternity closer to the MSME Sector
3. Develop an institutional base for the industry’s design requirement
4. Increase the awareness of the value of design and establish design learning in the MSME
5. Increase the competitiveness of local products and services through design

SEED FUND
For entrepreneurs, the easy availability of capital is a very important factor in order to grow their
enterprise. There are many business ideas that do not come into existence because of a lack of capital.
So, in order to curb this situation, the Government of India has launched a Startup India Seed Fund
Scheme (SISFS). Through this scheme, the government is going to provide financial assistance to
entrepreneurs.

Key Highlights of Startup India Seed Fund Scheme

Name of the Scheme Startup India Seed Fund Scheme

Launched By Government Of India
Beneficiary Entrepreneurs
Objective To Provide Funds For Startup
Official Website https://seedfund.startupindia.gov.in/
Year 2022
Financial Assistance Up To Rs 50 Lakh
Total Budget Rs 945 Crore
Number Of Beneficiaries 3600

Sources Of Seed Funding for Startups

1. Crowdfunding:
With more than 500 crowdfunding platforms currently active, this has become one of the most popular
avenues of seed funding. Crowdfunding platforms are usually open and anybody in the world may end
up backing the concept, idea or product.

2. Corporate seed funds:

This is a great source of seed funding as it comes with big visibility for the startup brand. Tech giants
such as Apple, Google and Intel back startups regularly with seed money.

3. Incubators
Incubators generally provide small seed investments and offer services such as office space or
management training. Most incubation programmes do not take equity from the startup but do offer
support beyond just funding. The Indian Angel Network Incubator, IIT-Bombay’s Society for
Innovation and Entrepreneurship or SINE, Khosla Labs and state-backed incubators such as T-Hub and
KSUM are some of the most active incubators in India.

4. Accelerators
Accelerators are more focused on supporting startups in scaling up their business rather than backing
and nurturing early-stage innovation. Accelerators also back startups through small seed investments
along with professional services, networking opportunities, mentoring and workspace. Unlike most
incubators, most accelerators take equity as they are privately funded. The popular accelerators include
Y Combinator, Techstars and 500 Startups.

5. Angel investors
Angel investors are individuals that offer capital in place of ownership equity or convertible debt. They
are called angel investors because they provide capital at times when the risk of a startup failing is
fairly high, which is during the early stage.

6. Personal Savings
Founders may put in their personal wealth and savings as seed funding. Also known as bootstrapping,
this brings extra financial pressure but there is no pressure on founders to return borrowed money.

7. Debt Funding
Debt mostly includes money taken from banks as loans or borrowed from friends and family.
Sometimes, venture capitalists or angel investors also issue loans instead of equity investments to
ventures in sectors where cash burn is high, but so is the traction.

8. Convertible Securities
These are investments which start off as loans but change into equity or shares depending on the
progress of the company, and when it reaches certain milestones such as sales or revenue targets.

9. VC Funding
Venture capitalists are marquee investors that provide funding based on a number of parameters such
as growth potential, market conditions, founder vision, idea or simply execution. In return, they take
some portion of equity or stake in the startup. VCs usually join multiple rounds of investment after the
seed stage, if the startup managers to reach those rounds. For seed funding, Accel Ventures, Seedfund,
Sequoia Surge, Axilor Ventures, SEAFund are some of the most venture capital firms in India.

10. Angel Funds or Angel Networks

Sometimes, investors come together to form angel networks or groups where they each invest small
amounts in the idea or the company during the early stage financing round. The major angel networks
in the market currently are AngelList, Indian Angel Network, Lead Angels, as well as angel networks
for each major startup hub in India.

Advantages of Seed Capital for Start-ups

1. Investors Willing to Take Risk: The most significant advantage of seed capital is that the
investors are ready to take the high risk of failure involved in the startup business.
2. Usually, No-Debt Financing: Most of the times, the budding entrepreneur is not overburdened
by the debts or liability. Instead, he/she needs to give away some share in equity to the
investors.
3. High Growth Prospectives: The seed capital provides financial leverage to the startups for
grabbing new opportunities and accelerate growth.
4. Flexible Business Agreements: The terms of a seed funding business agreement are negotiable
and flexible, which is not the case in venture capital and bank borrowings.
5. Angels Share Knowledge and Experience: In sources like an angel investor, venture capital,
incubator, partnership and accelerator, the investor takes an interest in the business. He/she also
share relevant knowledge and information with the budding entrepreneur.
6. No Monthly Fees: Many of the investors (except in case of loans and borrowings) are interested
in the ownership of the new venture rather than charging interest or monthly fees.
 7. Builds Relationship, Network and Community: Some sources of funds like angel investors,
crowdfunding and incubators allow the budding entrepreneur to access their business networks
and community to build public relations.

Disadvantages of Seed Capital for Start-ups

1. May Lead to Diversions: Acquisition of funds for business is a time consuming, and tedious
work with diverts the entrepreneur’s attention from the underlying business operations towards
fulfilling seed capital requirement.
2. Loss of Control and High Interference: An investors, especially the angel investors, exercise
control over the company’s decision making and operations, in the sake of providing guidance.
This excessive involvement of the investors trouble the entrepreneurs a lot.
3. Giving Up Equity: The budding entrepreneurs by opting for means like angel investors,
venture capitalists and incubators may land up giving away a share of business ownership in the
form of equity and limiting the future profits for himself or herself.
4. Interpreting Seed Capital Acquisition as Success: Some budding entrepreneurs falsely
consider the acquisition of funds as their most significant achievement. Thus, going into a
relaxation mode when they need to perform in making their business a success.
5. Costly Affair Due to High-Risk Involvement: Since startups involve a high risk of failure and
loss, the investors provide funds at a high rate of interest or in exchange for a significant
business share.
6. Sometimes Investors Lack Expertise: In the practice of creating a diversified portfolio, the
investors sometimes put their money in less-known business, thus increasing the risk of loss.
7. Limits Future Profits: Since some sources of capital acquisition demand giving up of a
portion of business ownership by issuing equity shares to the investor, the budding entrepreneur
needs to share all future profits with such investors.
8. Investments May Not Stay Lifelong: The investors purposefully pool in their money in a new
venture. They aim at making profits, and when the business reaches a saturation point, they tend
to withdraw their investments.

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

Govt. Of India, Ministry of MSME
ASPIRE- was launched to set up a network of technology centres and to set up incubation centres to
accelarate enterpreneurship and also to promote startups for innovation in agro industry

Objective Of the Scheme

The main objectives of the scheme are to:
1. Create new jobs and reduce unemployment
2. Promote entrepreneurship culture in India
3. Grassroots economic development at district level
4. Facilitate innovative business solution for un-met social needs
5. Promote innovation to further strengthen the competitiveness of MSME sector.

Nature Of Assistance
80 Livelihood business incubators (2014-2016) to be set up by NSIC, KVIC or Coir Board or any other
Institution/agency of GoI/State Govt. on its own or by any of the agency/Scheme for promotion of
Innovation, Entrepreneurship and Agro-Industry organisation of the M/o MSME, one-time grant of
100% of cost of Plant & Machinery other than the land and infrastructure or an amount up to Rs.100
lakhs whichever is less to be provided
In case of incubation centres to be set up under PPP mode with NSIC, KVIC or Coir Board or any
other Institution/agency of GoI/State Govt., one- time grant of 50% of cost of Plant & Machinery other
than the land and infrastructure or Rs.50.00 lakhs, whichever is less to be provided

Assistance towards the training cost of incubates will be met out of the ATI scheme of the Ministry as
far as possible for both centres.

Scope of ASPIRE
The assistance provided under this scheme is used for the following purposes:
 Automation of agricultural practices and related activities.
 Addition of value for agriculture and forest produce.
 Recycling of agricultural pre/post-harvest wastages, animal husbandry, off-farm but linked to
farm activities, etc.
 Business models for value addition and aggregation relevant for rural areas, for social impact
and the generation of local employment in rural areas.

Eligibility for ASPIRE Scheme

The following are eligible for obtaining the benefits under ASPIRE-
1. Any entrepreneur who intends to set up start-ups.
2. Any technical/university/research institutes including those in the field of rural and agro-based
industry.
3. All MSMEs with Entrepreneurs Memorandum Registration.
4. Any institute/agency under the Government of India or any State Government in the field of
technology, business management, rural development and entrepreneur development or any
body corporate under Public-Private Partnership (PPP) mode can set up Livelihood Business
Incubation (LBI).
5. Any existing incubation centres operating under different Ministries and Departments of
Government of India and institutions which include National/Regional level institutions of
Government of India or any State Government for setting up centres dedicated to incubation
and enterprise creation in the area of agro-based industries.
6. Any new incubation centres to be set up by eligible private institutions including industry
associations along with academic institutions, universities, government entities, R&D
laboratories and technology parks.
7. The application for this scheme is to be submitted to the Aspire Scheme Steering Committee of
the Ministry of MSME. Scheme Steering Committee is responsible for coordination, overall
policy and management support.

Components of ASPIRE Scheme

The components of this scheme are-

Livelihood Business Incubation (LBI)

The main objective of Livelihood Business Incubation is setting up business incubators to incubate,
provide skill development training to youth, impart entrepreneurship and facilitate funding for
empowering the entrepreneurs to set up their business enterprises. The main focus of these incubators
is creating jobs at the local level and reducing unemployment. These incubators create a favourable
ecosystem for the development of entrepreneurship in the country. The LBI’s create enterprises on a
large scale by taking up those commercial activities which are already established.

Technology Business Incubation (TBI)

Technology Business Incubators are an effective economic development tool. TBI promotes the growth
of an enterprise through the application of technology, innovation and supporting economic
development strategies for small business development. They also encourage growth in local
economies and provide mechanisms for technology transfer.
The TBI’s mainly focus on those technologies that require support for commercialisation and future
proliferation. The programmes under TBI include support and setting up incubation centres, incubation
of ideas, creation of business enterprises out of innovative ideas and accelerator programmes for
incubators.

Start-up Promotion through Small Industries Development Bank of India (SIDBI)

The Small Industries Development Bank of India (SIDBI) enables ideas/innovations that have
creativity and scalability to come ahead and convert these into commercially viable enterprises within a
specified period with specific outcomes through innovative means of finance. The innovative means of
finance of SIDBI include equity, quasi-equity, venture capital fund, angel fund, challenge fund, impact
fund, etc. A fund of funds is also created under SIDBI for achieving the purpose of converting
ideas/innovations into commercially viable enterprises.

This component targets knowledge initiatives which require support and nurture to succeed in the
development of technology. It also targets the business enterprises in the areas of innovation,
accelerator support in Agro-based Industry vertices, entrepreneurship and forward-backwards linkage
with multiple value chains of manufacturing and service delivery.

Nature of Assistance under ASPIRE

The nature of assistance provided under ASPIRE are-

1. For the LBI which is to be set up by – National Small Industries Corporation (NSIC) or – Coir
Board or – Khadi and Village Industries Commission (KVIC) or – Any other institution or
agency of the Government of India/ State Government on its own or by any agency
A one-time grant of 100% of the cost of Plant and Machinery other than infrastructure and land
or an amount of up to Rs.100 lakh, whichever is less is provided.

2. For setting up of incubation centres under PPP mode with – National Small Industries
Corporation (NSIC) or – Coir Board or – Khadi and Village Industries Commission (KVIC) or
– Any other institution or agency of the Government of India/ State Government on its own or
by any agency
A one-time grant of 50% of the cost of Plant and Machinery other than infrastructure and land
or an amount of up to Rs.50 lakh, whichever is less is provided.

3. For supporting existing incubation centres under TBI by various Ministries or Departments or
Government funded institutions such as – Department of Science & Technology – Department
of Biotechnology – The International Crops Research Institute for the Semi-Arid Tropics
(ICRISAT) – The Indian Council of Agricultural Research (ICAR)
A one time grant of 50% of Plant and Machinery other than infrastructure and land or an
amount of up to Rs.30 lakh, whichever is less is provided to set up centres dedicated to
enterprise creation and incubation in the area of Agro-based Industry.

4. For setting up of new incubation centres under TBI by eligible agencies dedicated to enterprise
creation and incubation in the area of Agro-based Industry, a one time grant of 50% of Plant
and Machinery other than infrastructure and land or an amount of up to Rs.100 lakh, whichever
is less is provided.
FUNDING PATTERN

The budget of 2014-2015 allocated a corpus of Rs.200 crore to ASPIRE. The budget of 2019 proposed
to set up 80 LBI and 20 TBI in 2019-20 under this scheme. The allocation of the corpus of this scheme
are as follows-

Sl. Items Amount

No
1 Creation, maintenance and updation of the database of the Technology Centres Rs.2 crore
network
2 Capacity Building, including Engagement of Consultants, Surveys, Awards, Rs.17.75
Exposure Visits, Studies, Monitoring and Evaluation, etc. crore
3 Fund for setting up of Incubation Centres by NSIC, Coir Board, KVIC or any Rs.62.50
other crore
institution or agency of the Government of India/State Government
4 Fund for setting up of Technology Incubation Centres (TBI) Rs.61.50
crore
5 Administrative cost @ 10% of the item mentioned in the 3rd row of this table Rs.6.25
above crore
6 Fund of Funds for Start-ups to be managed by SIDBI Rs.60 crore

The Samridhi Fund

Small Industries Development Bank of India (SIDBI)
The Samridhi Fund is an approx. ₹430 crore social venture capital fund. SIDBI has envisaged the
creation of the Samridhi Fund to provide capital to social enterprises which can deliver both
financial and social returns, in Bihar, Uttar Pradesh, Madhya Pradesh, Odisha , Chattisgarh,
Jharkhand, Rajasthan and West Bengal.

Scheme Benefits & Highlights

 Investments will typically be in growth stage companies undertaking expansions which
already have a sound business model or innovative business model or products and
technologies which have the potential of achieving considerable scale.
 Samridhi can provide growth capital to enterprises through a variety of funding
instruments, viz., Equity and Convertible Instruments.
 Samridhi typically provides capital in the range of INR 5-25 crore. In exceptional cases,
Samridhi may invest amounts outside this range, especially when strong developmental
impact can be generated.
 Target sectors includes, but are not be limited to:
o Water & Sanitation
o Affordable Healthcare
o Agriculture & Allied services
o Clean Energy
o Financial Inclusion (Including MFI’s)
o Education
o Skill Building, etc.

Process
The funding process typically takes 3-6 months, and involves the following stages:
- Go/No Go Decision – based on preliminary review by SVCL and a presentation by the
company, a decision will be made by the Investment Committee (IC)
 - Detailed appraisal by SVCL team
- Final Investment Committee Decision
- Due Diligence and Documentation

Eligibility
The conditions neccessary for getting funded are as follow:
 Be economically viable
 Provide access to markets for the poor
 Be socially relevant and impact the poor as customers, producers or employees
 Increase the flow of capital to the above mentioned states
 Focus on Environment, Social and Governance matters.

The enterprises must have plans to expand operations in any or all of the following states –
Bihar, Chhattisgarh, Odisha, Uttar Pradesh, West Bengal, Madhya Pradesh, Jharkhand and
Rajasthan.

Samridhi will not invest in any of the following businesses or activities:

 Illegal or banned activities, including child labour.
 Businesses dealing with hazardous chemicals, asbestos, pesticides and wastes; ozone
depleting substances; and endangered or protected wildlife or wildlife products.
 Arms and ammunition
 Companies which have been proven to be involved in fraud and corruption.

Documents Required
 Companies seeking funding from Samridhi should provide a detailed information
memorandum containing background of the company and the promoters and investors,
past financials, business plan, financial projections etc

Pradhan Mantri Mudra Yojana

MUDRA Loan is offered under the Pradhan Mantri Mudra Yojana (PMMY). MUDRA stands for
Micro-Units Development and Refinance Agency. Under this scheme, borrowers can avail business
loans ranging from Rs.50,000 to Rs.10 lakh on the basis of the Sishu, Kishor, and Tarun categories.

Pradhan Mantri Yojana was launched in 2015 with the aim to help small scale businesses expand and
attain success. Companies from both profit and non-profit sector can avail a loan under this scheme and
can avail a loan of up to Rs.10 lakh to kickstart their business.

Types of companies that can avail a loan under the Pradhan Mantri Yojana scheme are:
 Railway Recruitment Boards (RRB’s)
 Micro Finance Institutions (MFIs)
 Commercial Banks
 Non-Banking Financial Corporations (NBFCs)
 Small Finance Banks

Types of Mudra Loan Products

There are three types of mudra loan schemes, namely Tarun, Kishor, and Shishu.

Name of Scheme Loan Amount

Shishu Up to Rs.50,000
Kishor Rs.50,000 to Rs.5 lakh
Tarun Rs.5 lakh to Rs.10 lakh

Purpose of Pradhan Mantri Mudra Loan Yojana

MUDRA loans can be taken for a variety of reasons that help in creating employment and generating
income. Here are the main purposes for which Mudra loans are taken:

1. Business loan for shopkeepers, traders, vendors and other activities in the service sector
2. Equipment finance for small enterprise units
3. Working capital loan via MUDRA cards
4. Transport vehicle loans
5. People involved in Agri-allied non-farm income generating activities such as poultry farming,
bee-keeping, pisciculture, etc. can apply for a Mudra Loan.
6. People who use tractors, tillers as well as two wheelers for commercial activities can apply for a
Mudra Loan.

MUDRA Loan Eligibility

Indian citizens who have their own business plans for service sector activities, or trading or
manufacturing activities and require amounts of up to Rs.10 lakh can apply for Mudra loans. It can be
availed from public sector banks, private sector banks, regional rural banks (RRBs), small finance
banks (SFBs), and micro finance institutions (MFIs).

As per the eligibility criteria for MUDRA Loan, an applicant should be:
Minimum age of eligibility 18 years
Maximum age of eligibility 65 years
Who can avail a Mudra Loan Loans can be availed by new and existing units
Security or collateral No collateral or third-party security is required
Institutions eligible to offer Public Sector Banks, Private Sector Banks, Micro Finance
Mudra Loan Institutions, and Regional Rural Banks
Documents required Proof of identity, proof of residence, application form and
passport size photos

The Atal Innovation Mission (AIM)

It is a flagship initiative set up by the NITI Aayog to promote innovation and entrepreneurship
across the length and breadth of the country.
AlM's objectives are to create and promote an ecosystem of innovation and entrepreneurship
across the country at school, university, research institutions, MSME and industry levels.

Functions
The Atal Innovation Mission has following two core functions:
1. Entrepreneurship promotion through Self-Employment and Talent Utilization, wherein
innovators would be supported and mentored to become successful entrepreneurs.
2. Innovation promotion: to provide a platform where innovative ideas are generated.

Implementation framework
AIM has multiple programs to encourage and support innovation in the country.

Atal Tinkering Labs

To promote creative, innovative mind set in schools. At the school level, AIM is setting up state of
the art Atal Tinkering Labs (ATL) in schools across all districts across the country. These ATLs
are dedicated innovation workspaces of 1200-1500 square feet where do-it-yourself (DIY) kits on
latest technologies like 3D Printers, Robotics, Internet of Things (IOT), Miniaturized electronics
are installed using a grant of Rs 20 Lakhs from the government so that students from Grade VI to
Grade XII can tinker with these technologies and learn to create innovative solutions using these
technologies. This will enable create a problem solving, innovative mind set within millions of
students across the country.

Atal Incubators
Promoting entrepreneurship in universities and industry. At the university, NGO, SME and
Corporate industry levels, AIM is setting up world-class Atal Incubators (AICs) that would trigger
and enable successful growth of sustainable startups in every sector /state of the country, thereby
promoting entrepreneurs and job creators in the country addressing both commercial and social
entrepreneurship opportunities in India and applicable globally.

Atal New India Challenges and Atal Grand Challenges

To promote technology driven innovations and product creation for social and commercial impact.
Atal New India Challenges / Atal Grand Challenges are being launched in specific areas and
sectors of national importance - such as Renewable Energies, Energy Storage, Climate-smart
precision agriculture, Universal drinking water, Swaach Bharat, Transportation, Education,
Healthcare using Robotic, IOT technologies, Artificial Intelligence, Block-chain, Augmented and
Virtual reality, Battery Technologies etc.

The successful applicants will get a grant of upto Rs 1 crore for Atal New India Challenges and
larger grants of upto Rs 30 crores for Atal Grand Challenges. AIM is also partnering with
corporates and other institutions to launch such challenges to stimulate new product and service
development in various sectors.

Industry, Academia, Government, Global Collaborations

To enable a vibrant ecosystem of innovation, AIM is promoting active collaboration between
Government, Academia, Industry, Individuals and Societal focused NGOs.

AIM has set up one of the largest Mentoring networks in India called Mentor India from the
professional and industry community who can help mentor students at Atal Tinkering Labs and
AIC Incubators / startups.
Qualified mentors will be assigned to various AICs. A number of industry leaders and corporate
organizations have volunteered to adopt ATLs/AICs in their vicinities to ensure close mentoring
and success of these initiatives. AIM is also actively working on establishing collaborations with
innovation systems and entities in other countries in APAC, Europe, UK, USA, Africa and Latin
American Countries.

ARISE
The Aatmanirbhar Bharat ARISE-ANIC program is a national initiative to promote research &
innovation and increase competitiveness of Indian startups and MSMEs.

The objective of Aatmanirbhar Bharat ARISE-ANIC program is to proactively collaborate with

esteemed Ministries and the associated industries to catalyse research, innovation and facilitate
innovative solutions to sectoral problems. The objective is also to provide a steady stream of
innovative products & solutions where the Central Government Ministries / Departments will
become the potential first buyers.

MSME multiplier grants scheme

Department of Electronics and Information Technology (DeitY) is implementing Multiplier
Grants Scheme (MGS). MGS aims to encourage collaborative R&D between industry and
academics/ R&D institutions for development of products and packages. Under the scheme, if
industry supports R&D for development of products that can be commercialized at institution
level, then government will also provide financial support that is up to twice the amount provided
by industry. The proposals for getting financial support under the scheme are to be submitted
jointly by the industry and institutions.

The Scheme is extended upto 31st March 2020 with a total outlay of Rs. 36 Crores and DeitY
contribution of Rs. 24 Crore. The Technology Development Council (TDC) budget head will be
used for implementation of this scheme. Based on this pilot implementation and feedback, the
scheme would be reviewed by Working Group.

The major objectives of the scheme are:

1. Establish, nurture and strengthen the linkages between the Industry and Institutes;
2. To promote industry oriented R&D at institutes;
3. Encourage and accelerate development of indigenous products and packages; and
4. Bridge the gap between R&D / Proof-of-concept and commercialization /
5. globalization.

CGTMSE - Credit Guarantee Fund Trust for Micro and Small Enterprises
The Government of India launched the Credit Guarantee Fund Trust for Micro and Small
Enterprises (CGTMSE) scheme to provide credit that was collateral free to the micro and small
enterprise segment in India.

This is a trust formed by the Government of India, Small Industries Development Bank of India
(SIDBI), and The Ministry of Micro, Small and Medium Enterprises, for the implementation of
the Credit Guarantee Fund Scheme aimed at micro and small enterprises.

Features & Benefits of CGTMSE

These are the features and benefits of this trust:

1. Existing and new enterprises can apply for the fund.

2. Up to Rs.200 lakh of fund and non-fund based credit facilities are available for each
eligible borrower provided they extend on the project viability without any third-party
guarantee orcollateral security.
3. From the sanctioned amount, guarantee cover of 50%/75%/80%, and 85% is available
under the scheme.
4. For retail trade activity, each MSME borrower can avail 50% of the sanctioned amount of
the facility for credit that ranges from Rs.10 lakh to Rs.100 lakh.
5. For any Micro and Small Enterprise owned by women, the guarantee cover is 80%.
6. For credit up to Rs.50 lakh for loans and credits in the North East Region, the guarantee
cover is 80%.
7. In the case of any default by the enterprise of credit availed from lending institutions up to
Rs.200 lakh, up to 75% of the default amount will be settled by the Trust.
CGTMSE Eligibility Criteria
Any existing or new Micro and Small Enterprises that are engaged in service activities or
manufacturing activities are eligible for the Trust. The only exemption is for Micro and Small
Enterprises that are engaged in sectors such as Self Help Groups, educational institutions, training
institutions, and agriculture.

The list of member lending institutions and banks from which credit can be availed can be found
on the official website of the Credit Guarantee Fund Trust for Micro and Small Enterprises,
otherwise called UDAAN.

Highlights of CGTMSE operations

There have been 24,31,490 proposals that have been made by MSEs, which have been approved
for guarantee cover with credit facilities of Rs.1,13,500 crore in total as of 31 May 2016.

Software Technology Parks of India (STPI)

Introduction:
Software Technology Parks of India was set up in 1991 as an autonomous society under the
Ministry of Electronics and Information Technology (MeitY). STPI’s main objective has been the
promotion of software exports from the country. STPI acts as ‘single-window in providing
services to the software exporters. The services rendered by STPI for the software exporting
community have been statutory services, data communications services, incubation facilities,
training and value-added services. STPI has played a key developmental role in the promotion of
software exports with a special focus on SMEs and startup units.

STPI Centres
At present, a total of 62 STPI centres/sub-centres are operational across the country, out of which
54 centres are in Tier II and Tier III cities.
STPI is working closely with the respective State Governments/local authorities for creation of
more space, equipped with state-of–the-art infrastructure facilities, for development of the
software industry and increasing exports.

Services:
The main services rendered by STPI for the IT/ITES/ESDM industry are statutory services,
incubation facilities, data communications services which inter-alia are as under:
 Statutory Services
STPI has been implementing the Software Technology Park (STP) scheme and the Electronics
Hardware Technology Park (EHTP) scheme for the promotion of IT/ITES industry. The
phenomenal success of the IT-ITES industry has been possible, inter-alia, due to pivotal role
played by the STP Scheme. STP Scheme is a unique scheme, designed to promote the software
industry and growth of startups and SMEs without any locational constraints.

o Incubation Services
STPI is offering business and technology incubation with ultra-modern office facilities to
small units and entrepreneurs. Plug-n-Play facilities for startups enable short gestation period,
lower capital expenditure, and empower entrepreneurs to start their own operations and grow
in a competitive environment. Moreover, these incubatees are treated under preferred category
to propel the growth in R&D, product development, and IPR generation.
Incubation services of STPI include:
o Ready to work-office space with reliable internet connectivity at attractive tariffs.
 o Associated services (e.g. phone, VC/conference rooms, back office etc.) on usage
basis
o Opportunities for participation in events and promotion through STPI websites
o Access to tools, labs, mentoring, marketing etc. where available

 Datacom Services
One of the STPI’s remarkable contributions to the software-exporting sector is provision of
High-Speed Data Communication (HSDC) services. STPI has designed and developed
state-of-the-art HSDC network called SoftNET for software exporters.

 Consultancy Services
STPI’s strong domain knowledge, technology capabilities and process knowledge have
laid foundation for offering following services:
o Technology consulting and project management services to various national and
international organizations
o Providing services for building state-of-the-art communication network
infrastructure, network management systems, data centres & network operation
centres etc. for various state governments & central government departments
o Providing operation and maintenance support for networks ranging from enterprise
to e-governance

 STPI Co-Location Services

With the increased expectations from citizens for online services and the number of
automation projects being launched by the Government and private as well as corporate
clients, the Data Centre requirements are growing exponentially. To fulfil this requirement,
STPI is setting up state-of-the-art Tier-III standard Data Centre at its various Centres
across India.

 Information Security Audit Service

Presently STPI has been offering Information Security Audit Service to companies by
warranting them a digitally secured ecosystem to conduct their business in a seamless
manner.

The Venture Capital Assistance Scheme

The Venture Capital Assistance Scheme is one of the best efforts of the Indian government to
promote agricultural entrepreneurship in India.

Venture Capital Assistance is financial support in the form of an interest free loan provided by
SFAC to qualifying projects to meet shortfall in the capital requirement for implementation of the
project. Individuals, farmers, agri-preneurs, self-help groups, proprietary firms, agriculture
graduates, etc. are eligible for loans under this scheme.

Some of the key objectives of this scheme are:-

1. To promote agricultural entrepreneurship in India
2. To catalyse private investment in setting up of agribusiness projects
3. To strengthen backward linkages of agribusiness projects
4. To assist farmers, producer groups, entrepreneurs etc.
5. To arrange training and visits of agri-preneurs
6. To augment and strengthen existing State and Central SFAC
Single Point Registration Scheme (SPRS)
The Government is the single largest buyer of a variety of goods. With a view to increase the
share of purchases from the small-scale sector, the Government Stores Purchase Programme
was launched in 1955-56. NSIC registers Micro & small Enterprises (MSEs) under Single Point
Registration scheme (SPRS) for participation in Government Purchases.

Benefits of Registration
The units registered under Single Point Registration Scheme of NSIC are eligible to get the
benefits under “Public Procurement Policy for Micro & Small Enterprises (MSEs) Order 2012” as
notified by the Government of India, Ministry of Micro, Small & Medium Enterprises, New Delhi
vide Gazette Notification dated 26.03.2012
 Issue of tender sets free of cost,
 Exemption from payment of Earnest Money Deposit (EMD),
 In tender participating MSEs quoting price within price band of L1+15 per cent shall also
be allowed to supply a portion upto 20% of requirement by bringing down their price to
L1 Price where L1 is non MSEs.

Modified Special Incentive Package Scheme (M-SIPS)

In order to promote large scale manufacturing in the country, M-SIPS was announced by the
Government in July, 2012 to offset disability and attract investments in Electronics System Design
and Manufacturing (ESDM) Industries. The scheme provides incentive for investments on capital
expenditure- 20% for investments in Special Economic Zones (SEZs) and 25% in non-SEZs.

The Scheme was revised vide notification dated 03-08-2015 which was further amended vide
notification dated 30-01-2017.

Salient features of the scheme

The Scheme provides:
 Capital Subsidy - 20% for investments in Special Economic Zones (SEZs) and 25% in
non-SEZs.
 Incentives for both new units and expansion units.
 Incentives for a period of 5 years from the date of approval of application.
 Incentives for 44 categories/verticals across the value chain (raw materials including
assembly, testing, packaging and accessories, chips, components).
 Minimum investment threshold for each product category/ vertical (from Rs 1 crore for
manufacturing of accessories to Rs 5000 crores for memory semiconductor wafer
fabrication unit.
 Unit to be in Industrial Area notified by Central/State Govt.

Self Employment and Talent Utilisation (SETU)

Niti Aayog
SETU will be a Techno-Financial, Incubation and Facilitation Programme to support all aspects of
start up businesses, and other self-employment activities, particularly in technology-driven areas.
It aims to create around 100,000 jobs through start-ups.

Scheme Benefits & Highlights

An amount of INR 1,000 crore is being set up initially in NITI Aayog for SETU for setting up of
incubation centres and enhance skill development to facilitate the startup ecosystem in the country
while improving the ease of doing business.

This scheme aims at increasing the number of startups by incubation and extending other services
for reducing the rate of unemployment in the country.

Eligibility
This scheme is for the budding entrepreneurs who will be able to get incubation and other supoort
while doing startup.

1. Work from Home: Self-employment means increased working from home. This has
proven to be beneficial for time management and maintaining a work-personal life
balance. Working as well as taking care of children at the same time is possible in a better
way in this case.

2. Own Boss: Unemployment increases from the will against working under a superior. This
leads to self-employment measures.

3. Reduced Expenditure: One of the major expenditures in business comes in the form of
salaries to be paid. In self-employment, the requirement for paying salaries is easily
eradicated. Besides, it saves expenses incurred while travelling to and from work.

4. More Employment Opportunities: Lack of funds for starting new businesses often leads to
unemployment on a major scale. The SETU Yojana provides funds for the starting of new
businesses. This way it is reducing unemployment as well as poverty.

5. Balance in Work-life: Self-employment allows more flexibility in managing one’s routine

along with work performance. It certainly creates a balance between work life and personal
life.

6. Desired Place and Time for Work: One of the most important benefits of self-employment
is the flexibility of workplace and time. One can easily choose the preferred place and time
for working.

7. No Uniform: Uniforms have their own disadvantages. Employees often find uniforms
demotivating in their already regular environment of work. Self-employment, precisely,
work-from-home eradicates the need for wearing uniforms.

Disadvantages of the SETU Scheme

1. High Risk: Self-employment brings in the burden of responsibility for constantly ensuring
one’s availability of work. Chances might lead to a lack of work and thus a lack of income.
Under the SETU scheme, a loan is available at a cheaper rate, which, however, would
increase to a huge burden with the recession coming as a hindrance.

2. Fewer Benefits for Employees: Self-employment is certainly not an option for people
desiring direct monetary and non-monetary benefits. Employee benefits are at the least
under this scheme.
3. Scratch Base for a Start: Self-employment requires huge determination and persistence as
it requires immense effort in creating a base of clients for the business. Thus, opting for
self-employment requires a start from the grassroots levels, which might become tiring at
times.

4. Lack of Finance in Rural Areas: The unemployment range in the rural areas of India is
significantly high. SETU Yojana, though beneficial with the funds involved, has a major
con of being confined in the urban areas. The scheme is yet to reach the rural areas
properly, thus keeping a major percentage of the unemployed intact.

5. Non-stop Running Costs: Running costs of the business have got no relation to the profits
and losses. Whatever be the output, one can never deny paying the costs of running the
business. In a self-employed business, initially, this is a major problem. Running costs
such as rent, internet costs, insurance, and other necessary expenditure can never be
stopped during the running of a business. This further increases the Government’s NPA.