Businesses formed in different sectors contribute to the country’s economic growth and development while also gaining international prominence. Entrepreneurship and the start-up of their own firms are currently increasing popularly. The country’s economy will grow as a result of the formation of innovative businesses or startups.
There are about 40 million registered and unregistered Micro Small and Medium Enterprises (MSMEs) in India. MSMEs are found in both the organized and unorganized sectors. MSMEs represent over 40% of India’s overall GDP, and they continue to be a major source of employment. MSMEs address pressing concerns in the country, such as poverty, unemployment, income inequality, regional imbalances, and so on. For this reason, the government has developed a number of initiatives to provide loans to MSMEs in order to help them grow their businesses and economies. MSMEs’ entrepreneurs can borrow money in the form of a loan through any of the programs that best fit their needs.
However, establishing a business is not simple. The government recognizes the challenges that company owners and entrepreneurs confront in establishing and operating their businesses. The government has introduced many business programs to reduce the strain and promote new business formation and startups.
These projects are implemented by the government with the support of several ministries, financial institutions, joint venture companies, public sector undertakings, and banks, among others. The following are some of the Union Government’s Business Schemes.
In India, startups are getting increasingly popular. The government, led by Prime Minister Narendra Modi, has launched and supported Startup India. The Startup India project aims to create a robust environment that promotes startup growth. Its goal is to enable entrepreneurs to develop by leveraging innovation and technology.
A Scheme for Promotion of Innovation, Rural Industries, and Entrepreneurship (ASPIRE) was established to develop implantation centers and a network of technology centers to encourage entrepreneurship and startups for agro-industry innovation. This program assists and promotes entrepreneurs and startups in the agro-industry by offering development facilities, funding, and access to a technological network. Livelihood Business developers, Technology Business Incubators, and a fund managed by the Small Industries Development Bank of India are the components of ASPIRE (SIDBI).
As the initiatives conducted in this program are major sources of livelihood for millions of people in India, the funds under this plan are administered by SIDBI, Coir, Khadi industries, and others. Livelihood Business Incubators strive to eliminate unemployment by creating jobs on a local level.
Technological Startup Companies focus on expanding centers, which aids in the development of technology networks. SIDBI plays a vital role in the overall management of the scheme, as well as providing assistance to other components of the scheme, which helps to produce revenue for the people by boosting job possibilities.
PRADHAN MANTRI MUDRA YOJANA
The Government of India established the Micro Units Development and Refinance Agency Bank (MUDRA Bank) or Mudra Loan as a new financial institution. It was established in accordance with the Pradhan Mantri MUDRA Scheme (PMMY). Mudra Bank’s mission is to build micro-units and provide refinancing to Micro Finance Institutions. The loans are intended to promote entrepreneurship and new business enterprises. Small manufacturers, small enterprises, farmers, start-ups, individuals, merchants, vendors, restaurants, and bakeries, among many others, are eligible for Mudra loans.
The interest rates for mudra loans are not set; they are determined quarterly by RBI policy. For 1 to 5 years, the interest rates are typically between 8.40 percent and 12.45 percent. The mudra banks have created three products, Shishu, Kishor, and Tarun, which represent the stage of growth and financial requirements for micro-units, entrepreneurs, and startups. Shishu provides loans up to the amount of Rs.50,000. Kishor provides loans ranging from 50,000 to 5,00000rupees. Tarun offers loans ranging from Rs. 5,00,000 to Rs. 10,00,000 in amount.
Criteria for eligibility
This plan is open to all enterprises, including sole proprietorships, partnership firms, private limited companies, public companies, and other legal entities.
MULTIPLIER GRANTS SCHEME
The Department of Electronics and Information Technology is in charge of implementing the Multiplier Grants Scheme. This program fosters the country’s R&D development. The goal of this program is to promote collaborative R&D between businesses and academics or R&D institutes for the creation of goods and packages. This program promotes institutes to do industry-oriented research and development. It aids in the transition of a product/package from R&D to commercialization.
If the industry supports R&D for the creation of a product that can be commercialized at the institutional level, the government will likewise support that product financially. The government will contribute up to double the amount that the business contributes. Industry and institutions collaborate to submit applications for financial assistance under this program.
The overall cost of the plan is Rs.36 crores, with a contribution of Rs.24 crore from the Department of Electronics and Information Technology. This initiative is implemented under the Technology Development Council budget head.
SUPPORT FOR INTERNATIONAL PATENT PROTECTION IN ELECTRONICS & INFORMATION TECHNOLOGY (SIP-EIT)
In the area of patents, SIP-EIT provides financial assistance to MSMEs and Technology Startup units. This program assists MSMEs in the international patent filing process in order to promote innovation and recognize the benefits and capabilities of a worldwide international patent. This program was created to assist MSMEs and Technology Startup Units in obtaining worldwide patent protection for their unique ideas.
It is a government of India effort led by the Department of Electronics and Information Technology, MEITY to assist MSMEs and Technology Startup units in submitting foreign patents by giving financial assistance. It also aids in the capture of development prospects in the information, communication, and electronics sector.
Startup India Seed Fund
Prime Minister Narendra Modi announced the formation of the INR 1,000 crore ‘Startup India Seed Fund’ on January 16, 2021, to assist businesses and foster ideas from young entrepreneurs. PM Modi stated that the government is taking significant steps to guarantee that Indian entrepreneurs do not encounter funding constraints.
CREDIT GUARANTEE SCHEME FOR STARTUPS
The National Credit Guarantee Trustee Company serves as the trustee for the Credit Guarantee Scheme for Startups. The Government of India introduced this initiative to help the startup business. Setting up a business or firm is not simple for an entrepreneur. They are confronted with two major challenges: a lack of suitable capital and the banks’ opinion of them as high-risk entities. The government created this program to help people overcome their difficulties.
This program was introduced with Rs.2000 crore donation to help startups get collateral-free loans to establish their businesses. This program provides credit facility users with guaranteed protection for a set duration of time. Every qualifying recipient receives a credit guarantee of up to Rs.5 crore, which covers working capital, debentures, term loans, and venture.
Criteria for eligibility
Retail commerce, educational institutions, self-help organizations, and training institutes are examples of manufacturing enterprises. Additionally, enterprises in the service industry are able to apply for assistance under this loan program.
The Central Government of India has created initiatives aimed primarily at assisting Indian businesses in order to promote and support them. These programs are classified as Union Government Schemes for Indian Businesses. Startups and MSMEs are the base on which the government’s Atma Nirbhar mission and Make In India vision will flourish – creating more jobs, increasing exports, raising the standard of life for millions of Indians, and strengthening India’s worldwide position.
Many perks are granted to entrepreneurs who create businesses in order to foster growth and support the Indian economy. The Startup India program provides many opportunities to startups that want to start their own firm in India.