5 Best Government Programs That Can Support Your Business
India is going through an era of startups, creating a robust ecosystem for businesses and entrepreneurs through business innovation programs. India is now called a startup hub because it has over 99,000 startups and 107 unicorn companies worth $ 300 billion, according to reports. Prime Minister Narendra Modi has launched several initiatives to help budding entrepreneurs. Government schemes for startups aim to provide technical support, subsidies, financial support, and other services to help startups grow and mark their presence in the global business domain. Here are some of the government business programs that support startups and attract investors.
Atal Innovation Mission
The Atal Innovation Mission(AIM) scheme allows the government to create and fund new programs and policies to support startup development in several economic sectors. AIM has provided approximately Rs.5 billion in funding to companies over the past 10 years. The scheme is available to all emerging organizations such as healthcare, agriculture, education, and transport companies to support startup development in several economic sectors.
Multiplier Grant Scheme (MGS)
The Indian government has taken into consideration the founders of the startup by introducing the Startup India Action Plan. The government included more than 50 schemes to encourage startup founders to develop their businesses across India. In the multiplier subsidy system, the government works with academic and government research and development institutions to develop products and packages in the business industry.
The Department of Electronic Information Technology is developing business innovation by utilizing electronic information technology. It is an attempt to bridge the gap between business commercialization and academic research development. The scheme aims to help entrepreneurs establish startups and make rapid progress while promoting research and development services in the academic industry.
The business industry relies on effective research and development to incorporate new products and innovations. However, this process can be expensive. More recently, there has been a trend toward global products, and, ultimately, indigenous sales have declined. The Multiplier Subsidy scheme (MGS) is a way to deal with it. When governments support research and development with their resources, they promise significant financial support to the industry or organization.
The government is responsible for supporting academic/R&D institutions as well. If an organization or startup is eligible for the MGS grant, it will cover the specific costs of the project, including human resources, travel, supplies, equipment, etc.
Credit Linked Capital Subsidy for Technology Upgradation
The scheme aims to promote the up-gradation of technology in MSEs by providing an upfront capital grant of 51 percent (institutional funding of up to 15 crore) for the induction of established and improved technologies in specific approved sub-sectors/products. In other words, the primary objective is to upgrade plants and machines with state-of-the-art technology, with or without expansion, and also for the new MSEs, which have set up facilities with appropriate qualified and proven technologies officially approved under the scheme’s guidelines.
The revised scheme aims at facilitating technology up gradation by providing a 15 percent upfront capital subsidy to MSEs, including tiny, khadi, village, and coir industrial units, on institutional finance availed by them for induction of well-established and improved technologies in specified sub-sectors/products approved under the scheme.
Startup India Initiative
Startup India is the flagship initiative of the Indian government aimed at catalyzing startup culture and building a strong and inclusive ecosystem for innovation and entrepreneurship in India. Since the launch, Startup India has rolled out several programs aimed at supporting entrepreneurs and turning India into a country of job creators rather than job seekers.
The broad scope of Startup India's programs is outlined in the Action Plan and is managed by a professional Startup India team and reported to the Department for Industrial Policy Promotion (DPIIT). The 19-point Action Plan assumes the following types of startup support:
- Enhanced infrastructure, including incubation centers
- Easier IPR facilitation, including easier patent filing
- A better regulatory environment, including tax benefits, easier compliance, help in setting up a company, faster exit mechanisms, and more
- An economic stimulus in the form of Rs.10,000 crore fund of funds managed by SIDBI to increase funding opportunities
- The website, also known as the Startup India Portal, offers a range of useful resources and a vast networking database for entrepreneurs and other stakeholders in the Startup ecosystem.
Startup India Seed Fund Scheme
The Startup India Seed Fund Scheme (SISFS), launched by the Office for the Promotion of Industry and Trade (DPIIT), provided financial assistance to startups for proof-of-concept, prototype development, product trials, market-entry, and commercialization. Seed funds are paid to selected startups through qualified incubators across India. This allows the startups to graduate to a level where they can raise investments from angel investors and venture capitalists or seek loans from commercial banks and financial institutions.
Benefits:
- Up to Rs. 20 Lakhs as a grant for validation of Proof of Concept, prototype development, or product trials. The grant shall be disbursed in milestone-based installments. These milestones can be related to the development of prototypes, product testing, building a product ready for market launch, etc.
- Up to Rs.50 Lakhs of investment for market entry, commercialization, or scaling up through convertible debentures or debt or debt-linked instruments.
- Seed funds are strictly not used by startups for the creation of any facilities and should be utilized for the purpose it has been granted.