CSE332

Unit3:- Government Funding and

startup schemes
What are startups
•Startups often operate with limited resources and rely
on funding from investors, venture capitalists, or
crowdfunding.

•They typically focus on rapid growth and scalability to

achieve success in a competitive market.

•Many startups begin as small teams and evolve into

larger companies if they succeed.

•While some startups achieve great success, many face

challenges and risks that can lead to failure.
 India (DPIIT - Startup India)
• The Department for Promotion of Industry and
Internal Trade (DPIIT) defines a startup as:
• A company that has been in existence for less than
10 years from its date of incorporation.
• Its annual turnover does not exceed INR 100 crore in
any financial year.
• It is working towards innovation, development, or
improvement of products, processes, or services or
has a scalable business model with high potential for
employment and wealth creation.
• It should not be formed by splitting or
reconstructing an existing business.
Government Startup Schemes in
India & Worldwide( Resources)
• 🇮🇳 India (Startup India & Other Schemes)
1.Startup India Initiative – Provides tax
exemptions, funding support, and ease of
business registration.
2.MUDRA Loan Scheme – Offers collateral-free
loans up to ₹10 lakh for small startups.
3.Stand-Up India – Supports SC/ST and women
entrepreneurs with loans between ₹10 lakh –
₹1 crore.
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4. SIDBI Fund of Funds – ₹10,000 crore fund to invest in

startups through venture capital firms.
5. Atal Innovation Mission (AIM) – Supports innovation
and incubation centers in schools & universities.
6. E-Marketplace – Allows startups to sell
products/services to the government easily.
7. SEED Fund Scheme – Provides financial assistance of
up to ₹50 lakh for early-stage startups
Benefits of Startup India Scheme
1. Tax Benefits
• Tax Holiday for 3 Years – Startups registered under
DPIIT (Department for Promotion of Industry and
Internal Trade) get a 100% tax exemption for the first
3 consecutive years (under Section 80-IAC of the
Income Tax Act).
• Exemption from Angel Tax – Startups are exempt
from the Angel Tax (Section 56(2)(viib)) on
investments received from investors.
• Capital Gains Tax Exemption – Startups can claim
exemptions on long-term capital gains if the amount
is reinvested in a fund approved by the government.
Benefits of Startup India Scheme
2. Easy Compliance & Self-Certification
• Startups can self-certify compliance for 9 labor and
environmental laws, reducing the regulatory burden.
• Fewer inspections in the initial years.
3. Simplified Company Registration
• Startups can register online via the Startup India Portal
with minimal documentation.
4. Funding Support
• Fund of Funds for Startups (FFS) – ₹10,000 crore fund
managed by SIDBI to support venture capital firms
investing in startups.
• Credit Guarantee Scheme – Provides collateral-free
loans to startups.
Benefits of Startup India Scheme
5. Fast-Track Patent & IPR Protection
• Startups get 80% rebate on patent filing fees
and 50% rebate on trademark fees.
• Fast-track patent examination and free legal
assistance for intellectual property rights.
6. Government Tenders & Procurement Benefits
• Startups do not need prior experience to apply
for government tenders.
• They get priority in public procurement from
PSUs and government departments.
Benefits of Startup India Scheme
7. Incubation & Networking Opportunities
• Startup India Hub connects entrepreneurs with
mentors, investors, and incubators.
• Access to Atal Incubation Centers (AICs) and Startup
Accelerators.
8. Easier Exit for Startups
• Startups can wind up within 90 days under the
Insolvency and Bankruptcy Code, 2016 instead of
the usual 180 days.
Bank Loan for Startup Business in
India
1. MUDRA Loan (Pradhan Mantri MUDRA Yojana - PMMY)
✅ Loan Amount: Up to ₹10 lakh
✅ Eligibility: Startups, MSMEs, and small businesses
✅ Types of Loans:
• Shishu: Up to ₹50,000 (For new businesses)
• Kishor: ₹50,000 to ₹5 lakh (For growing businesses)
• Tarun: ₹5 lakh to ₹10 lakh (For established businesses)
✅ Collateral: No collateral required
✅ Interest Rate: 8% to 12% (varies by bank)
✅ Where to Apply: Public and private sector banks, NBFCs,
microfinance institutions
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2. Stand-Up India Scheme (For Women & SC/ST
Entrepreneurs)
• ✅ Loan Amount: ₹10 lakh to ₹1 crore
✅ Eligibility:
• At least 51% ownership by SC/ST or women
entrepreneurs
• Business must be in manufacturing, services,
trading, or agriculture
✅ Interest Rate: Bank-dependent, competitive rates
✅ Where to Apply: Banks and online via
www.standupmitra.in
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3. Credit Guarantee Fund Trust for Micro and Small

Enterprises (CGTMSE)
• ✅ Loan Amount: Up to ₹2 crore
✅ Eligibility: Startups & MSMEs in manufacturing,
service, and retail sectors
✅ Collateral: Collateral-free for loans up to ₹2 crore
✅ Interest Rate: 9% to 14% (bank-dependent)
✅ Where to Apply: Public/private banks, NBFCs
Continue….
• 4. SIDBI Startup Loan (Small Industries
Development Bank of India)
• ✅ Loan Amount: ₹10 lakh to ₹10 crore
✅ Eligibility: Startups in innovation,
technology, and MSME sectors
✅ Collateral: Depends on the loan amount &
business plan
✅ Interest Rate: 9.5% onwards
✅ Where to Apply: www.sidbi.in or partner
banks
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5. Bank-Specific Startup Loans
• Many banks offer customized startup loans:
• SBI Startup Loan – Business loans for MSMEs
and startups
• HDFC Bank Business Growth Loan –
Unsecured loans for startups
• ICICI Bank Business Loan – Loans for working
capital and expansion
• Axis Bank Business Loan – Quick approval
loans for small businesses
How to Apply for a Startup loan?

1.Prepare Documents:
1.Business plan
2.Financial projections
3.GST registration, PAN, Aadhaar
4.Bank statements (last 6 months)
2.Choose a Loan Scheme (MUDRA, Stand-Up India,
CGTMSE, etc.)
3.Apply Online or Visit a Bank
4.Submit Documents & Get Approval