Here are 5 Key Government Schemes that are Driving India’s Startup Revolution

India’s entrepreneurial landscape is flourishing, with a surge in startups contributing to its title as the ‘Startup Hub.’ With over 99,000 startups and 107 unicorn companies valued at $30 billion, the country’s ecosystem is vibrant and dynamic. Spearheaded by Prime Minister Narendra Modi, the government has rolled out various schemes to bolster this entrepreneurial spirit, offering a range of support from technical assistance to financial aid.

Startups can receive up to Rs 20 lakhs for concept development and demonstrations, and up to Rs 50 lakhs for scaling their products or services. So far, over 1000 startups have benefited from this scheme, receiving more than Rs 177 crore in funding.

One such initiative is the Atal Innovation Mission (AIM), launched in 2016, aimed at nurturing innovation across different sectors by providing funding of approximately Rs 10 crores over five years. This scheme is open to startups operating in diverse fields such as health, agriculture, education, and transportation.

Another noteworthy program is the Multiplier Grant Scheme (MGS), initiated by the Department of Electronics and Information Technology, fostering collaborative research and development among industries. Under this scheme, projects can receive a maximum grant of Rs 2 crore for a duration of less than two years.

For those in the dairy sector, the Dairy Entrepreneurship Development Scheme (DEDS) offers support for activities like milk production, procurement, and marketing. Back-end capital is provided for bankable projects, covering 25% of the total project cost for general category candidates and 33.33% for SC/ST category farms.

The Startup India Initiative stands out as a popular scheme, offering tax benefits to entrepreneurs for up to five years. Recognized by the Department for Promotion of Industry and Internal Trade (DPIIT), startups under this scheme must be within 7 years of establishment, or 10 years for biotechnology companies.

In addition, the Startup India Seed Fund Scheme (SISFS), introduced in January 2021, targets early-stage startups, providing funding of Rs 5 crore. Startups can receive up to Rs 20 lakhs for concept development and demonstrations, and up to Rs 50 lakhs for scaling their products or services. So far, over 1000 startups have benefited from this scheme, receiving more than Rs 177 crore in funding.

SISFS is part of the broader Startup India initiative by the Government of India, aiming to foster a strong startup ecosystem in the country. The scheme provides financial assistance to early-stage startups to support activities such as proof of concept, prototype development, product trials, market-entry, and commercialization.

Key points about the scheme:

1. Purpose: To address the capital inadequacy in the seed and ‘Proof of Concept’ development stage for startups.
2. Funding: The scheme has an outlay of INR 945 Crore and aims to support approximately 3,600 entrepreneurs through 300 incubators over the next four years.
3. Eligibility: Startups recognized by DPIIT, incorporated not more than two years ago, with a viable business idea, technological integration, and potential for scaling are eligible. Preference is given to startups in various sectors including social impact, healthcare, education, agriculture, etc.
4. Funding Allocation: The seed fund will be disbursed through eligible incubators across India.
5. Execution and Monitoring: An Experts Advisory Committee (EAC) has been constituted to oversee the execution and monitoring of the scheme. The EAC evaluates and selects incubators for fund allocation, monitors progress, and ensures efficient fund utilization.
6. Eligibility Criteria for Startups: Startups must meet certain criteria such as being DPIIT-recognized, having technology integration, and having Indian promoters with at least 51% shareholding.

Here are some types of businesses that are generally eligible under SISFS:

1. Social Impact: Startups focusing on addressing social challenges like poverty alleviation, healthcare accessibility, education improvement, etc.
2. Healthcare: Startups offering innovative solutions in healthcare, including medical devices, telemedicine, healthcare IT, etc.
3. Education: Startups developing technologies or services to enhance educational outcomes, improve access to education, or innovate in the field of education technology.
4. Agriculture: Startups working on agricultural technology, farm management systems, agricultural supply chain optimization, etc.
5. Technology: Startups leveraging technology in various sectors such as fintech, AI, machine learning, IoT, blockchain, etc.
6. Energy: Startups involved in renewable energy, energy efficiency, clean technology, etc.
7. Manufacturing: Startups innovating in manufacturing processes, materials science, 3D printing, etc.
8. Consumer Goods: Startups producing innovative consumer products, including food and beverage, fashion, personal care, etc.
9. Environment: Startups focused on environmental sustainability, waste management, water management, clean air solutions, etc.

These are just examples, and startups from other sectors can also be eligible for the scheme as long as they meet the eligibility criteria specified by DPIIT, such as having a viable business idea, technological integration, and potential for scaling. Check DPIIT criteria here.

Overall, the SISFS aims to bridge the funding gap for early-stage startups and enable them to validate their business ideas, ultimately contributing to employment generation and fostering innovation in various sectors.