Entrepreneurship Development – Schemes of Government

In recent years the “startup culture”, as it is popularly known, has definitely gained momentum in the country. With the addition of more than 1,300 startups in 2019, India continues to reinforce its position as the 3rd largest startup ecosystem in the world, according to IT industry body Nasscom. Due to the constant increase in the number of people who are choosing to start up their own SMEs, the Government of India has launched a variety of startup schemes and loans to encourage more and more people to embark on the path of entrepreneurship as this in turn attracts foreign investment and helps in flourishing the economy.

Government schemes for entrepreneurs in India mainly focuses on providing the much needed capital for investment at subsidized interest rates, which in turn encourages people to fulfill their dreams.
Here are some of the Indian Government’s schemes to promote entrepreneurs –

1. Stand-Up India

The Stand-Up India Loan Scheme’s objective is to facilitate bank loans between Rs.10 lakhs and Rs.1 Crore to at least one Scheduled Caste or one Scheduled Tribe borrower and one woman borrower per bank branch for setting up a greenfield enterprise. The particular borrowing enterprise may be a part of the manufacturing, services or the trading sector. In case of non-individual enterprises, at least 51% of the shareholding and controlling stake should be held by either an SC, ST or woman entrepreneur. The motive behind this scheme is also to provide support to training and employment programme for women.

2. Atal Incubation Centres (AIC)

Headed by Atal Innovation Mission, AIC aims to promote innovation and entrepreneurship in India. Approved startups can get funding up to Rs 10 crore for a maximum period of 5 years, to cover capital and operational expenses.

Industries Applicable: AI, AR/VR, Automobiles, Telecom, Healthcare, Aeronautics, Aviation, Chemicals, Nano-Tech, Pets, Animals, IT, Computers, Design, Non-Renewable Energy, Social Impact, Food and more.

3. NewGen IEDC

Introduced recently, the NewGen Innovation and Entrepreneurship Development Centre is applicable to industries like healthcare services, chemicals, hardware, aeronautical/defense, IT, AR/VR, construction, design, food and beverages, textiles, nanotechnology, and renewable and non-renewable energy sources, among others. It provides a one-time non-recurring loan of up to 25 lakhs to finance startup units.

4. Credit Lined Capital Subsidy Scheme

Under MSME, the CLCSS is a means to provide subsidy to manufacturing units who are looking at upgrading their machinery with state-of-the-art equipment. This scheme was initiated with the objective to encourage manufacturing units to buy the latest equipment, and also facilitate technology upgradation. The way this works is that any SSI unit which has upgraded its machinery can apply for a 15% subsidy on a loan amount of up to 1 Crore.

5. Credit Guarantee Fund Scheme For Micro And Small Enterprises

Of all the problems faced by the MSEs, the lack of adequate credit and timely credit facilities at reasonable interest rate is one of the most pertinent issues. The foremost cause for low availability of bank finances to this sector is the perception the banks have of the high-risk involved in lending to MSEs. They therefore insist on collaterals, which are not easily available with these enterprises. The problem is more serious for micro enterprises requiring small loans as well as for entrepreneurs who are just starting out. The Credit Guarantee Scheme for Micro and Small Enterprises (CGS) was launched by the Government to make collateral-free credit available to the micro and small enterprise sector.

The credit facilities available under the scheme are both term loans and working capital facilities up to Rs.1 Crore, extended without any collateral security and/or third party guarantee, to a new or existing micro and small enterprise.