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Assignment 8

The document outlines several Indian government startup funding schemes that provide grants, loans, and other financial incentives to small businesses and entrepreneurs, including schemes focused on patent protection, collaborative R&D projects, software development parks, electronics development funds, and manufacturing subsidies. Eligibility and benefits vary by scheme but they aim to stimulate innovation and business growth in key technology sectors like IT, electronics, and manufacturing.

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68 DEEPAK GAUND
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488 views4 pages

Assignment 8

The document outlines several Indian government startup funding schemes that provide grants, loans, and other financial incentives to small businesses and entrepreneurs, including schemes focused on patent protection, collaborative R&D projects, software development parks, electronics development funds, and manufacturing subsidies. Eligibility and benefits vary by scheme but they aim to stimulate innovation and business growth in key technology sectors like IT, electronics, and manufacturing.

Uploaded by

68 DEEPAK GAUND
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ASSINGMENT 7

Visit a bank/financial institution to inquiry about funding scheme for small scale
enterprices
__________________________________________________________________
The Indian government has introduced over 50+ startup schemes in past few years.
Each startup scheme is missioned towards boosting the Indian startup ecosystem.
Consider this. Close to 4,400 technology startups exist in India and the number is
expected to reach over 12,000 by 2020. India is also at third place behind US and
Britain in terms of the number of startups. Furthermore, in line with its global
counterparts, India has its own billion dollar club to boast about. This includes
startups like Flipkart, Snapdeal, Ola, InMobi, Hike, MuSigma, Paytm, Zomato,
and Quikr. With the next $100 Mn funding raise, fintech startup MobiKwik too
looks to join the unicorn club.

some general information on the funding schemes that small scale enterprises can
explore, based on my extensive knowledge of the financial industry.

Funding is essential for any small-scale enterprise to grow and expand their
operations. However, finding the right funding scheme can be challenging,
especially for small businesses that lack the resources and expertise to navigate the
complex financial landscape. In this article, we will explore various funding
schemes that small scale enterprises can explore to finance their growth and
development.

 Government Grants: Governments often offer grants to small businesses to


stimulate economic growth and promote entrepreneurship. These grants can help
small businesses with start-up costs, research and development, or expanding
their operations. The application process for government grants can be complex,
and it may take several months to receive funding. To find out more about
government grants in your country, you can visit the government website or
contact your local Small Business Administration.

 Bank Loans: Banks offer various types of loans to small businesses, including
term loans, lines of credit, and equipment financing. To qualify for a bank loan,
you will need to provide the bank with a detailed business plan, financial
statements, and collateral. Banks typically have strict eligibility criteria, and the
approval process can be time-consuming. However, bank loans offer relatively
low-interest rates, and the repayment terms are flexible.

 Microfinance: Microfinance institutions provide small loans to entrepreneurs


who may not qualify for traditional bank loans. These loans typically have
higher interest rates than bank loans, but they are easier to qualify for and can
help you get your business off the ground. Microfinance institutions also provide
training and mentorship to help entrepreneurs build their businesses.
 Crowdfunding: Crowdfunding allows entrepreneurs to raise capital by getting
small investments from a large number of people. There are many crowdfunding
platforms available, such as Kickstarter and Indiegogo, that can help you raise
funds for your business idea. Crowdfunding is an excellent way to test the
market demand for your product or service and build a community of loyal
supporters.

 Venture Capital: Venture capital firms invest in high-growth startups that have
the potential to generate significant returns. To attract venture capital, you will
need to have a strong business plan, a talented team, and a unique and
innovative product or service. Venture capital firms typically take an equity
stake in your business and provide guidance and mentorship to help you scale
your operations.

 Startup Scheme 1: Support for International Patent Protection in


Electronics & Information Technology

o Headed by: Department of Electronics and Information Technology


(DeitY)

o Industry Applicable: IT Services, analytics, enterprise software,


technology hardware, Internet of Things, AI.

o Eligible For: MSMEs and technology startups in the ICTE sector.

o Overview: The scheme, launched by the Indian government, aims to


provide financial support to MSMEs and technology startup units for
international patent filing to encourage innovation and recognise the
value and capabilities of global IP along with capturing growth
opportunities in the ICTE sector.

o Fiscal Incentives: Reimbursement will be limited to a total of INR 15


Lakhs per invention or 50% of the total expenses incurred in filing and
processing of the patent application upto grant, whichever is lesser.

 Startup Scheme 2: Multiplier Grants Scheme (MGS)

o Launched In: May 2013

o Headed By: Department of Electronics and Information Technology


(DeitY)

o Industry Applicable: IT Services, analytics, enterprise software,


technology hardware, Internet of Things, AI.

o Eligible For: Startups, incubator/academia/accelerators. Should have


projects in electronics & information technology.
o Overview: The MGS aims to encourage collaborative R&D
between industry and academics/R&D institutions for
development of products and packages.
o Fiscal Incentives: The Government grants for individual industry would be
limited to a maximum of INR 2 Cr per project and the duration of each
project should, preferably, be less than two years. For industry
consortiums, these figures would be INR 4 Cr and three years.

o Time Period: 2-3 years

 Startup Scheme 3: Software Technology Park (STP) Scheme

o Launched In: N/A

o Headed By: Software Technology Parks of India (STPI)

o Industry Applicable: IT services, fintech, enterprise software,

analytics, AI. Eligible For: Software companies

o Overview: The STPI has been set up with the objective of encouraging,
promoting, and boosting software exports from India. The STP Scheme,
by the Indian government, provides statutory services, data
communications servers, incubation facilities, training and value- added
services. The scheme allows software companies to set up operations in
convenient and inexpensive locations and plan their investment and
growth, driven by business needs.

o Fiscal Incentives: Sales in the DTA up to 50% of the FOB value of


exports is permissible and depreciation on computers at accelerated rates
up to 100% over 5 years is permissible.

o Time Period: N/A

 Startup Scheme 4: Electronic Development Fund (EDF) Policy

 Launched In: N/A

 Headed By: Department of Electronics and Information Technology (DeitY)

 Industry Applicable: IT Services, analytics, enterprise software, technology


hardware, Internet of Things, AI, nanotechnology.

 Eligible For: Startups pursuing innovation in technology sectors like


electronics, IT, and nanoelectronics.

 Overview: The agenda was envisaged to develop the Electronics System


Design and Manufacturing (ESDM) sector to achieve “Net Zero Imports”
by 2020. The EDF will help attract venture funds, angel funds and seed
funds towards R&D and innovation in the specified areas. It will help create
a cell of Daughter funds and Fund Managers who will be seeking good
startups (potential winners) and selecting them based on professional
considerations.

 Fiscal Incentives: The Electronic Development Fund (EDF) is set up as a


“Fund of Funds” to participate in professionally-managed “Daughter
Funds” which, in turn, will provide risk capital to companies developing
new technologies. CANBANK Venture Capital Funds Ltd. (CVCFL) is the
Fund Manager for EDF.

 Time Period: N/A

 Startup Scheme 5: Modified Special Incentive Package Scheme (M-SIPS)

 Launched In: July 2012

 Headed By: Department of Electronics and Information Technology (DeitY)

 Industry Applicable: Technology hardware, Internet of Things,


aeronautics/aerospace & defence, automotive, non-renewable energy,
renewable energy, green technology and nanotechnology.

 Eligible For: Startups in electronic manufacturing

 Overview: The scheme aims to support IPR awareness workshops/seminars


for sensitising and disseminating awareness about Intellectual Property
Rights among various stakeholders especially in the E&IT sector.

 Fiscal Incentives: This startup scheme by Indian government provides a


capital subsidy of 20% in SEZ (25% in non-SEZ) for units engaged in
electronics manufacturing. It also provides for reimbursements of CVD/
excise for capital equipment for the non-SEZ units. For some of the high
capital investment projects like the scheme provides for Central Taxes and
Duties reimbursement of Central Taxes and Duties.

 Conclusion

Hence we conclude that there are different funding schemes are available for
entrepreneurs for small scale of enterprises.

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