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Government Schemes For Startup

The document outlines several key Government schemes that provide support to startups and MSMEs in India: 1. The Pradhan Mantri Mudra Yojana scheme provides low-interest loans up to Rs. 10 lakh through MUDRA banks to help self-employment and small businesses. 2. The Credit Guarantee Trust Fund for Micro and Small Enterprises provides collateral-free loans up to Rs. 1 crore for eligible startups and MSMEs. 3. Several other schemes provide subsidies, funding, and resources to help MSMEs upgrade technology, access design expertise, establish software parks, and more. The SAMRIDH and Stand-Up India

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Sahil Gaude
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136 views4 pages

Government Schemes For Startup

The document outlines several key Government schemes that provide support to startups and MSMEs in India: 1. The Pradhan Mantri Mudra Yojana scheme provides low-interest loans up to Rs. 10 lakh through MUDRA banks to help self-employment and small businesses. 2. The Credit Guarantee Trust Fund for Micro and Small Enterprises provides collateral-free loans up to Rs. 1 crore for eligible startups and MSMEs. 3. Several other schemes provide subsidies, funding, and resources to help MSMEs upgrade technology, access design expertise, establish software parks, and more. The SAMRIDH and Stand-Up India

Uploaded by

Sahil Gaude
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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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There are various Government Schemes For Startups and MSMEs, which can help them

trigger growth, and more business:

1. Pradhan Mantri Mudra Yojana


PM Modi launched Pradhan Mantri Mudra Yojana, wherein Micro Units Development and
Refinance Agency Bank or MUDRA Banks provide loans at low rates to micro-finance
institutions and non-banking financial institutions, who in turn provide low-interest loans to
startups and MSMEs.

Hence, Pradhan Mantri Mudra Yojana is one of its kind fund of funds, devised and
conceptualized to empower Indian entrepreneurs. Loans up to Rs 10 lakh can be availed
under the MUDRA scheme.

It was launched in 2015 and within 2 years, more than 1.8 crore jobs were generated due to
the loans and business generated via MUDRA. Till August 14th, 2020, more than 67 lakh
loans amounting to Rs 48,000 crore have been sanctioned under the MUDRA scheme.

There are three categories of businesses, which can avail loans under MUDRA loan for
startups:

 Category 1: Shishu, which is for new businesses. Loans up to Rs 50,000 can be


availed
 Category 2: Kishor, which is a mid-aged business. Loans up to Rs 5 lakh can be
availed
 Category 3: Tarun, which is an existing, experienced business. Loans up to Rs 10 lakh
can be availed.
Mudra scheme covers MSMEs such as Small Manufacturing Units, Retailers, Wholesalers,
Artisans, and more.

2. Credit Guarantee Trust Fund for Micro & Small


Enterprises (CGT SME)
CGT SME is one of the biggest Startup Loan Schemes launched by the Ministry of MSME in
India. Under this Government scheme, a collateral-free loan of up to Rs 1 crore is provided to
eligible startups and MSMEs. The loan is dispersed via a trust named Credit Guarantee
Fund Trust for Micro and Small Enterprises (CGTMSE), which is powered by the
Ministry of MSME and Small Industries Development Bank of India (SIDBI).

Scheme Benefits & Highlights


 Fund and non-fund based (Letters of Credit, Bank Guarantee etc.) credit facilities up to
Rs 200 lakh per eligible borrower are covered under the guarantee scheme provided
they are extended on the project viability without collateral security or third party
guarantee.
 The guarantee cover available under the scheme is to the extent of 50%/ 75% / 80% &
85% of the sanctioned amount of the credit facility. The extent of guarantee cover is 85%
for micro enterprises for credit up to Rs 5 lakh. The extent of guarantee cover is 50% of
the sanctioned amount of the credit facility for credit from Rs 10 lakh to Rs 100 lakh per
MSE borrower for retail trade activity.
 The extent of guarantee cover is 80%(i) Micro and Small Enterprises operated and/or
owned by women; and (ii) all credits/loans in the North East Region (NER) for credit
facilities upto Rs 50 lakh. In case of default, Trust settles the claim up to 75% of the
amount in default of the credit facility extended by the lending institution for credit
facilities upto Rs 200 lakh.

3. Financial Support to MSMEs in ZED Certification


Scheme
Focussed on existing and new manufacturing units, ZED or Zero Defect and Zero Effect
mission are to encourage manufacturers to create better products, with high quality and zero
defects. The focus is to enable manufacturers to embrace world-class manufacturing
processes, and use technology to ensure that their products are the best in the class.

The government scheme will provide both financial support, and technology and tools to
ensure zero defects in their products.

4. Credit Linked Capital Subsidy for Technology


Upgradation (CLCSS)
Govt is clearly aware that technology is the tool that can propel Indian startups and MSMEs
to compete with global competitors.

This is the reason for the creation of the Credit Linked Capital Subsidy for Technology
Upgradation (CLCSS) Government scheme, wherein Govt provides financial help to
MSMEs to upgrade their technology and implement state of an art technological platform for
their business.

Under CLCSS, Govt provides a 15% subsidy for investment up to Rs 1 crore for upgrading
technology for startups and MSMEs in India. More than 7500 products/services are covered
under this Government scheme.

Eligibility/Applicability for the scheme

 Any Micro and Small Enterprise (MSE) having valid Udyam Registration and availing
institutional credit to buy new Plant & Machinery approved under the scheme.
 Special Benefits are applicable in case of SC/ST, Women, NER / Hill States /
Aspirational Districts /LWE Districts. The subsidy shall be admissible for investment
in acquisition /replacement of Plant & Machinery /equipment's & Technology up-
gradation of any kind (Core plant & Machinery). Second hand & fabricated will not be
eligible.
5. Design Clinic for Design Expertise to MSMEs
Design and innovation are critical for any sector, and every startup and MSME should have a
design-centric approach to solve the problems of their niche. In order to encourage and
inspire small businesses to experiment and try out new designs for their products, the MSME
Ministry has created a Design Clinic for inducing design-related expertise for startups and
MSMEs.

Under this Government scheme, Govt. will provide up to Rs 60,000 aid for attending design
seminars and up to Rs 3.75 lakh or 75% of the cost of a seminar, wherein the entrepreneur
and/or their team can learn and implement design theories and learn more about them. Via
this program, entrepreneurs can know about the latest trends and practices related to designs,
interact and network with other designers, entrepreneurs, and learn in-depth about design
mentality and theories.

6) Software Technology Park (STP) The Software Technology Park


(STP) Scheme is a 100% export-oriented scheme for the development and
export of computer software, as well as professional services via
communication links or physical media. This program is one-of-a-kind in
that it concentrates on a single product or industry, namely computer
software. The project combines the government's concept of 100 percent
Export Oriented Units (EOU) and Export Processing Zones (EPZ) with the
notion of Science Parks/Technology Parks, which are already in use around
the world.

7) SAMRIDH Scheme to help startups in the early stage


As you all may be aware that many startups close down within four years of
incorporation. Not because of poor quality of products but because of lack of
investment or underdeveloped skill set. Keeping this thing in mind the Government
of India has launched the MeitY SAMRIDH Scheme. The main objective of the MeitY
SAMRIDH scheme is to provide funding support to the startups so that they can
become successful. Through this scheme, not only funding support but also skill sets
will be provided to the entrepreneurs. Acceleration will be provided to startups by
providing customer connect, investor connects and international connect services.
This scheme will prove to be a boon in pushing the startup ecosystem. Now the
entrepreneurs will get funding that will help them in expanding their business.

 SAMRIDH initiative will not only provide funding support to startups, but will
also help in bringing skill sets together to help them become successful
 It will focus on accelerating startups by providing customer connect, investor
connect, and international immersion in the next three years
 An investment of up to Rs 40 lakh will be provided to a startup based on the
current valuation and growth stage through selected accelerators
 It will facilitate equal matching investment by the accelerator / investor
 SAMRIDH will select startups that are ready for acceleration stage and will
provide them with funding support, mentorship, and other support
 SAMRIDH will accelerate creation of employment in traditional and new-age
industries

8. Stand-Up India (SUI) scheme


The objective of the SUI scheme is to facilitate bank loans between Rs.10 lakh and
Rs. 1 Crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower
and at least one woman borrower per bank branch for setting up a greenfield
enterprise.

Eligibility:

 SC / ST and /or Women entrepreneurs, above 18 years of age


 Loans under the scheme is available only for Green Field Projects. Green
Field signifies, in this context, the first time venture of the beneficiary in the
manufacturing or services or trading sector.
 In case of non-individual enterprises, 51% of the shareholding and controlling
stake should be held by either SC/ST and/or Women Entrepreneur.
Borrower should not be in default to any Bank / Financial Institution.

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