Startup Initiatives taken by the Government of India With over 1,23,900 startups recognised in India by DPIIT by March 14, 2024 entrepreneurial spirit has brought India to a new era. India is now called the “Startup Hub” having the third-largest startup ecosystem. The Government of India aims to increase the contribution of startups and MSME’s to India’s GDP to 50%. To diversify the digital Infrastructure the government of India is actively taking initiatives intending to provide financial assistance and lay the foundation for building a self-reliant India and harnessing Its potential.
The government of India has unveiled a Startup India Action Plan on 16th January 2016 in hopes of increasing the spreading of the Startup movement. the Startup Action Plan is divided into three important areas:
• Simplification and Handholding: It included the digitization and the ease of self-certification with the advent of Startup India Hub along with rolling out the mobile application and portal.
• Funding Support and Incentives: It included providing funding through Fund of Funds (a pool of investment capital) with a corpus of Rs. 10,000 crores along with tax exemption on capital gains and to startups for 10 years
• Industry-Academia Partnership and Incubation: It includes launching innovation-focused programs for students, building innovation centres at national Institutes, and annual incubator grand program.
Startup India Hub
Launched on 1st April 2016, it is India’s largest digital entrepreneurial platform that resolves queries and provides handholding support to startups. The hub is successful in resolving 12,290 queries received from startups through various means like telephone, email and X (previously Twitter).
Tax Exemptions
The recognized startups are exempted from tax under section 56(2) (viib) of the Income Tax Act. The startup has to file a timely sign a declaration in Form 2 to DPIIT (Department for Promotion of Industry and Internal Trade) as per its notification.
Startup Yatras
This initiative was launched to reach Tier 2 and Tier 3 cities of India in search of entrepreneurial spirit and to develop a startup ecosystem. Efforts are taken to encourage startups through Bootcamps, social media, newspapers, and digital platforms. “The Startup India Mobile Van” has also been introduced which has travelled across 23 states and 220 districts to record ideas impacting 78,246 budding entrepreneurs.
Government Schemes to initiate Startups
1. Atal Innovation Mission (AIM)
AIM was launched in 2016 by the government of India. The scheme’s primary goal is to create new policies and programs that encourage various sectors of the economy and provide platform and collaboration opportunities to different stakeholders and establish a national hub for innovation and entrepreneurship. Under the Niti Aayog’s Flagship initiatives Atal Tinkering Lab (ATL) program has also been launched which provides school students an opportunity to foster their curiosity and innovative skills through advanced tools and technologies such as 3D printing, rapid prototyping tools, robotics, do it yourself kits, etc. Aim has also launched one of the largest mentor engagement and management programs called “Mentor India- The Mentors of Change” which has over 6200+ mentors who are actively helping to transform India.
Eligibility criteria
The beneficiary enterprise should be enrolled under the Companies Act 2013 as a micro, small or medium enterprise as defined as MSMED Act 2006.
The enterprise should identify as a startup as defined by the DPIIT, Ministry of commerce and Industry and Government of India.
The applicants enterprise ownership (more than 51 %) should be held in India.
There should be a working prototype of the suggested solution that is proposed to ANIC.
Application Process
The application process to avail the Atal Innovation Mission Scheme is completely Online and can be achieved by following the steps given below-
1. Visit http://niti.gov.in/content/atal-incubation-centres-aics and review the guidelines before applying.
2. To apply start by visiting https://aimapp2.aim.gov.in/ and then sign in using your enterprises email address.
3. Now select ‘Atal Incubation Centre’ tab and fill the application form with required details.
4. Complete and submit the application form. (Ensure all the details filled are current as no changes can be made after submission).
5. To view your application form visit the same website and proceed to add the same email and password. The page will also display a unique id which should be kept for future reference.
2. Startup India Seed Fund Scheme (SISFS)
SISFC was launched in 2021 by the government of India, with a total budget of Rs. 945 crores. The scheme provides financial assistance to early-stage startups for prototype development, product trials, market entry proof of concept and commercialization. This aid supports startups to reach a level where they can raise investments through angel investors and venture capitalists. The chosen entrepreneurs would receive up to Rs. 5 crores in funding whereas chosen Startups will get grants up to Rs. 20 Lakhs.
Eligibility criteria
The startup should be not more than two years old at the time of application and should be enrolled under DPIIT.
The Startup should have a business idea through which an idea or service could be developed. The idea should be commerciable, fit for the market and have a scope of scaling.
The startup’s business model, problem solving methodology, service or product should use technology to its core.
The startup would not be eligible if it has received more than 10 lakhs of monetary support under any Central or State government schemes. Prize money from competitions, subsidized working space are not included.
According to the Companies Act, 2013 and SEBI (ICDR) Regulations 2018 shareholding by Indian promoters in the startup should be at least 51% at the time of application to the incubator for the scheme.
Application Process
The application process to avail the Startup India Seed Fund Scheme is completely Online and can be
achieved by following the steps given below
1. After passing the eligibility criteria of the SISFS the DPIIT recognised startup can apply through the official portal (https://seedfund.startupindia.gov.in/).
2. Then click on “Apply Now”for Incubators or startups as according to your choice and proceed.
3. The startup can then Log in with the credentials used for startup recognition.
4. Then select up to three incubators according to your preference.
5. Submit the application form.
(The application form requires details such as customer profile, market size, Business model, team profile, problem statement, fund utilization plans etc. There are no application fee/charges for this scheme and also after the selection process the startup will not be asked to pay)
3. Pradhan Mantri Mudra Yojana (PMMY)
PMMY was launched by the Prime Minister on April 8, 2015. The aim of the scheme is to facilitate micro credit/loans up to Rs. 10 lakhs to micro-enterprises which comprises trading or services and agriculture related activities like poultry, dairy, beekeeping etc. The interest rates are decided by the members leading Institutions as per the guidelines set by the Reserve Bank of India. There are no middlemen or agents in MUDRA for availing loans. The loan can be availed through the Member Lending institutions (MILs) which are:Public Sector Banks
● Private Sector Banks
● State operated cooperative banks
● Rural banks from regional sector
● Micro Finance Institution (MFI)
● Non-Banking Finance Company (NBFC)
● Small Finance Banks (SFBs)
Other financial intermediary approved by Mudra Ltd. as member financial institutions.
Eligibility Criteria
The Pradhan Mantri Mudra Yojana provides credit to non farm enterprises with their credit below Rs.10 Lakhs.
On the Basis of the Development and the size of the entrepreneur, the entrepreneur can avail the following loans
● Shishu – Loans up to Rs. 50,000/-
● Kishor – Loans between Rs. 50,000 and Rs. 5 lakh
● Tarun – Loans between Rs. 5 lakh and Rs. 10 lakh
The beneficiary has a business plan and is able to repay the loan.
(The beneficiary should not be a defaulter to any bank and have a good credit score and also the applicant should have the necessary education, skill set and knowledge to avail the scheme.)
Application Process
The application process to avail the pradhan Mantri Mudra Yojana one can contact any lending bank or financial institution or can apply online by following the steps given below
1. Visit the official website (https://www.mudra.org.in/) and select https://www.udyamimitra.in/
2. Click the mudra loan and ‘Apply Now’
3. Now select the category of the loan you require (Shishu, Kishor, Tarun).
4. Fill the business related information in the application form like business name, business activity, owners details, existing banking
facilities etc.
5. To submit an application you are required to attach certain documents which include identity proof, address proof, applicant photo, signature
of the applicant, address of the business etc.
6. After submitting the application, you will receive an application number which is to be kept for future reference.
4. Atmanirbhar Bharat Abhiyaan
Atmanirbhar Bharat Abhiyaan or Self-Reliant India was a campaign launched by Prime Minister Narendra Modi on 12th May 2020. The campaign aims to make India and its citizens self-reliant and independent in all sectors possible. It emphasises on the five pillars of India, which are the Economy, Infrastructure, System, Demography and Demand. This scheme encourages Indian Startups to collaborate and create creative solutions made in India. Atmanirbhar Bharat Rojgar Yojana is a part of Atmanirbhar Bharat Abhiyaan which promises to generate new employment and provide social security benefits during COVID-19. Under this scheme the employee working under business under Employees provident Fund Organisation(EPFO).
To avail the benefits of Atmanirbhar Bharat Rojgar Yojana an individual must fall under these criteria
1. The employee must be earning monthly salary under Rs. 15000 who were not the part of any company who are not registered under EPFO
2. The employees with EPFO who left their jobs between 01.03.2020 and 30.09.2020.
Application process (For organization)
1. Visit the Employer’s Portal (https://unifiedportal-emp.epfindia.gov.in/epfo/?accesscheck=%2Femployer_home.php)
on the EPFO unified Portal.
2. Now update form named 5A.
3. Now register under the Aatmanirbhar Bharat Rojgar Yojana.
4. Verify the details and register under the ‘New Employee’ Tab.
5. File the Electronic Challan cum Return for all the current employees.
6. Now the organization is eligible to avail the benefits of this scheme.
5. Stand Up India
The Stand Up India scheme was launched on 5th April 2016 by our honourable Prime Minister Narendra Modi as a government initiative encouraging Startups, micro and macro businesses envisaged for SC, ST and women entrepreneurs. The scheme, as envisioned, is to sanction bank loans up to Rs. 1 Crore to one SC/ST borrower and one women borrower at least per branch with the purpose of starting a greenfield venture. It also requires that banks seize a Rupay debit card that will enable the borrowing to be more convenient.
Eligibility Criteria
The beneficiary must be an entrepreneur who is at least 18 years old.
The beneficiary should be SC/ST or woman entrepreneur.
The maximum or at least 51% of the stakeholding of the beneficiary enterprise should be held by
SC/ST or woman entrepreneurs.
The scheme can only be availed by a green field enterprise (enterprise started from scratch).
The beneficiary must not be a defaulter in any bank or financial institution.
Application Process
The application process to avail the Stand Up India Scheme one can contact any lending bank or financial institution or can apply online by following the steps given below-
1. Visit the Official Portal of Stand up India (https://www.standupmitra.in/Login/Register#NoBack)
2. Now start with entering the details regarding the business location.
3. Now select the category you belong (SC,ST,Woman) and choose whether the applicant holds at least 51% of stake of the enterprise.
4. The applicant should now choose the bank they want to apply to.
5. Upload the necessary documents like project report, KYC documents.
6. The last step is to submit your application.
(Documents Required: identity proof, address proof, business address proof, Caste certificate to prove whether you are SC/ST)
6. SAMRIDH Scheme
The Startup Accelerators of MeitY for pRoduct Innovation, Development, and growtH (SAMRIDh) was launched in August 2021 by the government of India. The scheme aims to support 300 startups in a 3 year duration. SAMRIDH scheme also provides support to existing and upcoming Accelerators to select and accelerate potential IT based startups to scale in India. The First round of funding is up to Rs/ 40 lakhs with each firm receiving 30 lakhs each. The initiatives also accept proposals from current and upcoming accelerators to join MeitY’s network and provide six-month startup accelerator program each year.
Eligibility Criteria (For accelerators)
The beneficiary’s enterprise should be in India for at least three years.
The business has supported more than 50 startups with 10 receiving non public investment.
The business must have necessary space and infrastructure for startup operations.
The business should be able to support startups in both domestic and international markets by working with angel investors.
Application Process
The application process to avail theSAMRIDH Scheme is completely Online and can be achieved by following the steps given below
1. Visit the MeitY Startup Hub (MSH) official website (https://msh.meity.gov.in/)
2. Now create an account on the portal by selecting the Register button.
3. Log in to the portal and click on the SAMRIDH tab.
4. Now click ‘Apply Now’ and start the registration process.
5. Start by filling the application form with necessary details.
6. Now you would be required to upload necessary documents like startup certificate of Incorporation, PAN card, GST registration certificate etc.
7. At last submit the application form and wait for the application form to be reviewed.
Regulation of the startups
The legal landscape of startups in India is especially in the process of constant development in order to foster emerging company ecosystems. The government has, over several years, endeavoured to ease the processes of doing business for start-ups through policy changes and friendly laws. These regulations seek to make operations flexible; promote innovation and ease of doing business while keeping up with national legal requirements.
1. Startup India Recognition: There exists specific legislation touching on the recognition of startup by the Department for Promotion of Industry and Internal Trade (DPIIT) here in India. All startups fulfilling DPIIT criteria of eligibility can apply for DPIIT recognition and do get various incentives such as tax exemptions, relaxed process for procurement from government bodies, and getting permissions and participation in government schemes.
2. Relaxation in Regulatory Norms: The DPIIT identified startups avail several exemptions from regulations below: For instance, these start-ups can complete 9 labour and 3 environmental laws without the intervention of attorneys. That cuts down the compliance cost when the organization is in its formative stages of growth and development. Additionally, the startups are free from inspection for five years, except when the situation has a substantiated complaint of a violation.
3. Fast-Track Patent and Trademark Filing: Currently, the government supports the practice of the fast-track mechanism associated with filing patents and trademarks. It is possible to register patents and trademarks stump, simplified and is cheaper for the startup businesses compared to usual methods, with an added priority to the examination and grants. The legal regime pointed above ensures the protection of innovations through the IP support; at the same time, it increases the market value of startup companies.
4. Public Procurement Norms: Through its Startup India initiative, the Government of India has provided relief to such startups from the pitch requirement of experience in public procurement bids and turnover. This makes it possible for start-ups to bid for government business and contracts thus fostering level ground for business starters in technology, defence and infrastructure among others.
5. Winding Up Regulations: That is why if some startup requires a shutdown, the government has set liberal intentions for it through IBC. The recognized startups are eligible to dissolve the businesses by filing the application within ninety days from the start of the application process, but no objections from the creditors are entertained. This is a large regulatory burden reduction for business people and guarantees that these people can shut their businesses straightforwardly.
How startups are benefiting from the schemes
The different Schemes that have been launched by the Government of India has brought a positive change among start-ups by solving most of the issues that the start-ups face in terms of funding, innovation, market access and regulatory compliances. Such interventions give financing, technology and a favourable environment to start up to enhance its performance. Here are some ways in which startups are benefiting from these schemes:
1. Access to Funding: One of the main problems which a startup can face is the lack of funding or insufficient funding to drive innovation. The government initiated separate funds that prove beneficial for new ventures, including the Fund of Funds for Startups (FFS) and Startup. India Seed Fund Scheme (SISFS). The FFS with a corpus of Rs. 10,000 crore enables start-ups to raise equity funding from an AIF. However, SISFS assists early-stage start-ups in their initial capital requirement, including prototype creation, entry into the trading environment, as
well as product testing. These schemes cut down the dependence on conventional funding channels that can limit funding through assets like a building or charge prohibitively expensive rates.
2. Tax Benefits: Through constitutional implementation, recognized startups are subject to a variety of tax reliefs which help to relieve monetary burdens especially at the initial stages of the business. Tax exemptions for three years under Section 80-IAC mean that the startup can invest in expansions for operations without worrying about taxes. In addition to that, subsidies in capital gains taxes enable startups to lure in more investors into their companies. These tax effects increase the financial feasibility and external attractiveness of startup firms and hence their growth.
3. Innovation and Mentorship Support: For instance, by the AIM portal and Startup India hub, institutions get vital technical and mentorship help to refine their ideas and to transform it into business models. Of these, the Atal Tinkering Labs (ATL) specifically helps students in school innovate and establish such a young talent pipeline. In addition, the Mentor India program enlists more than 6000 mentors to guide young startups and equip them with knowledge regarding their business expansion.
4. Enhanced Market Access: Government procurement is proving to be a major advantage for startups to get better access to markets in India. The Public Procurement Policy for Micro and Small Enterprise (MSEs) clearly states that at least 25 percent of procurement by the various
public sectors should be sourced from MSMEs including start-up firms. This makes it possible for startups to lock deals in government organizations so as to create large revenues. The government also supports the entry to the international markets through such programs as the International Cooperation Scheme that offers startups a chance to engage in international trade shows and get visibility on the global market.
5. Ease of Compliance: They are also profiting from compliance regulation ease the Indian government has put in place to support the budding companies. For example, self-certification regarding labor and environmental legislation, immunity from some taxes, and a quicker access to the acquisition of patent and trademark protection through lower costs and less paperwork are serious advantages. This results in startups being more able to direct most of their effort on how the business is run rather than having to spend considerable effort trying to understand countless regulations.
6. Support for Women and Minority Entrepreneurs: The Standup India scheme under which loans between Rs. 10 lakhs to Rs. 1 crore can be availed for SC, ST and women entrepreneurs has helped traditionally marginalized people to come forward and start their enterprises.
This is good for inclusion within the ecosystem and as support for a diverse group of talents who wish to start their companies.
712 total views, 2 views today
