GOVERNMENT SCHEMES FOR STARTING A BUSINESS IN INDIA
Startup India Scheme is one of the flagship initiatives of the Central Government of India. Under Startup India Scheme, several programs are rolled out with the following objectives –
To support entrepreneurs;
To build a robust startup ecosystem;
To transform India from a country of job seekers to a country of job creators; etc.
Eligibility criteria under the Startup India Scheme
Eligibility criteria to be satisfied for availing benefits under Startup India Scheme are tabulated hereunder –
1. Type of Company: The Startup must be incorporated in any of the following forms-
Private Limited Company under the Companies Act, 2013; or
Limited Liability Partnership under Limited Liability Partnership Act, 2008; or
Partnership firm under Partnership Act, 1932.
2. Formation: The Startup should not have been formed out of the splitting/ reconstruction of the business. Notably, any company formed out of splitting an organization into two or more businesses will not be eligible under Startup India Scheme.
3. Maximum capital of annual turnover: The Startup should not have an annual turnover of more than INR 25 Crores.
4. Type of business: The Startup should be engaged in developing some new product/ service. Additionally, the following conditions should also be satisfied –
- The aim of the Startup should be to develop/ commercialize the new product/ service or significantly improve the existing product/ service which enables to add/ enhance value to customers or workflow;
- The Startup must be majorly working towards the development; innovation; commercialization or deployment of the product/ service that is specifically driven by intellectual property or the latest technology;
- The Startup should not be involved in developing a product/ service that doesn’t have the potential for commercialization or developing an undifferentiated product/ service which has NIL or limited incremental value for customers/ workflow.
Some of the important government schemes include
1. Start-up India: This scheme was launched by the Government of India in January 2016 to foster innovation and promote start-ups. It provides financial support to start-ups through three major schemes – the Start-up India Seed Fund, the Start-up India Venture Capital Fund, and the Start-up India Innovate India Fund. It also provides a range of non-financial benefits, such as intellectual property protection, tax exemptions, and mentorship.
2. Stand-up India: This government-sponsored initiative was created to facilitate the availability of credit to economically weaker sections and foster entrepreneurship opportunities in the country. Under this scheme, the Government provides loans of up to Rs. 10 lakhs to Scheduled Caste, Scheduled Tribes and Women entrepreneurs.
3. Credit Guarantee Fund for Micro and Small Enterprises: This scheme was launched to support budding entrepreneurs by providing collateral-free loans up to Rs. 5 crores. It also provides a guarantee to banks and other financial institutions to protect them from any defaults in the repayment of loans.
4. Self-Employed Women’s Association (SEWA): This association is created to provide entrepreneurial training and financial advice to women entrepreneurs and help them start their own businesses. It also provides financial support to existing women-owned businesses and helps them expand their businesses.
5. Pradhan Mantri Mudra Yojana (PMMY): As part of this scheme, lower-income entrepreneurs are provided with loans of up to Rs. 10 lakhs. This scheme is specifically designed for small businesses that do not have access to traditional bank loans.