Government Initiatives towards Uplifting the Startup Ecosystem of India
To prosper the innovation and development in Indian industries, the startups made a huge impact in recent decades. By knowing the capacity and tendency of startup ecosystem in India, the government of India continuously introducing several schemes and programs to elevate the innovative technologies in various sectors. Indian government has designed various ministries and departments to legitimize the startups by providing funding and technological guidance. The schemes aim to motivate the startups and amplify their business to perform in universal scenario by providing necessary resources to meet the financial and technical requirements.
As a young entrepreneur at the inception stage looking for establishing startup, it is essential to stay informed and updated about the schemes and regulations.
Let’s take a deep dive into major schemes by the Government of India that plays a significant role in entitling startups with great impact.
1. Startup India Seed Fund Scheme (SISFS): SISFS is a flagship scheme under Startup India initiative. The scheme was exposed on January 16th, 2021 in the Startup India International Summit and notified on January 21st, 2021. The scheme was aggregated by Department for promotion of Industry and Internal Trade (DPIT) to give financial endorsement of an expenditure of Rs.945 crore rupees for startups based on Proof of concept, Prototype development, Product trials, market entry and commercialization sectors. Startups initiated in sectors that have great social impact would be given priority than other sectors. To possess the fund from this scheme, the eligibility is to register and approve with Department for promotion of Industry and Internal Trade (DPIT) within less than 2 years at the time of application.
2. IREDA-NCEF Refinance Scheme: Indian Renewable Energy Development Agency (IREDA) scheme providing refinance funds for Biomass Power and Small Hydro Power Projects. The allowance rate of interest and the funds are drawn from National clean energy fund (NCEF). The main objective of the scheme is to support many renewable energy projects to ensure clean and sustainable energy. The eligibility criterion for this scheme is the renewable units should have an experience in operating energy systems for 2 years in defined project. The consolidated amount shall be reminisced by IREDA in account of the startup project unable to meet the guidelines.
3. Promoting Innovations in Individuals, Startups and MSMEs (PRISM): PRISM is a scheme governed by Ministry of Science and Technology of India, aims to support individual innovators and startups by providing technical guidance, tutoring and financial reimbursement. This scheme helps the firm or organization to permit immersive development in various sectors such as healthcare, Green Energy, Energy Storage systems, and more. Any Indian citizens with innovative ideas can apply to avail the PRISM scheme. Based on the technological phases the funding will be differing and the maximum amount of financial support will be up to 50 lakhs or 50 percent in total cost of project.
5. Technology Development Fund: The scheme of Technology Development Fund has been established by Indian Ministry of Defence to uplift the technical systems in defence technologies. They provide financial funds for startups by allowing the stakeholders and new industries to upgrade the systems in defence industry. To apply for this scheme, the startup must be registered with DPIT and produced with one of state or central government attached incubators. The controller of the startup should be an Indian citizen and would not acquire any funds for similar projects from the government. Through this scheme the registered startup can receive investment funds up to 10 crores.
6. Support for International Patent Protection in Electronics Information Technology (SIP-EIT): The SIP-EIT scheme was launched by ministry of the department of Electronics and Information Technology of India. The scheme provides financial assistance to enterprises and technology startups which are integrated for enhancement in patient protection in Electronics and Information Technology sector. This scheme allows the stakeholders to encourage the innovation and advancement by providing maximum reimbursement of 15 lakhs per project or 50 percent of total expenses. To avail the benefits of these schemes the startup must be registered under the government of MSME development Act of 2006.
7. Digital India GENESIS: To find and support successful startups in tier-I & II cities, the ministry of Electronics and Information Technology launched a scheme called Digital India GENESIS under the steamship scheme of Digital India Innovation to gain prominence of collaboration among innovative startups in India with an outlay of 750 crores which was started in the aim to integrate 10,000+ tech startups over the period of next 5 years.
8. Extra Mural Research Funding: The Board of Science and Engineering under the Ministry of Science and Technology launched the Extra Mural Research Funding scheme to provide funds to research and development based startups to promote and strengthen the field of science with most innovative solutions. Along with the funds for the period of 3 years, the scheme provides scientific research support for the startups to regulate their performances. The eligibility criteria to apply for this scheme is the applicant must be Indian citizen. Foreigners can also apply if they meet the requirements of Science and Technology board’s qualification. The application process will be held twice a year gradually during July and December. After completing the application process, the respected applicant selected by advisory department will get confirmation call within six months.
9. Drugs & Pharmaceutical Research: As India contributes in export of 3.5 percent in drugs and pharmaceuticals globally among 200+ countries, the ministry of science and technology of India takes initiative to increase the capability of the industry by encouraging new startups to ensure growth. The scheme provides financial reimbursement to R&D institutes and pharmaceutical companies to build up their mechanism and infrastructure to enhance country’s pharmaceutical industry. It provides 50:50 sharing in financial expenditure. The eligibility criterion to apply for this scheme is to be registered and granted from the DPT (Department of science and technology) by necessarily meeting its terms and conditions. The ownership of the property should have capacity to meet the 30 percent of recurring expenditure.
10. Sustainable Finance Scheme: The scheme was introduced by SIDBI (Small Industries Development Bank of India) under the Ministry of Finance to provide financial support for energy efficiency and clean energy startups. The main objective of the scheme is to support the new micro, small and medium enterprises to strengthen the renewable energy projects. To avail the benefits of scheme the original manufacturer should be already registered with MSME or previous product supplier of MSME, and the waste management expense should be included in total expenditure. Under the scheme the eligible startups can claim the amount from 10 lakhs up to 150 lakhs per project.
11. 4E (End-to-End Energy Efficiency): The scheme was launched on special occasion of ‘World Environment Day’ in 2014. The scheme was governed by SIDBI under the ministry of finance for execution of energy saving technologies. To achieve this factor, the scheme provides funds for startups to fulfill the financial needs up to 2.5 lakhs in building mechanism and management works. Startups running for less than 3 years underservice and manufacturing sectors only eligible to apply for this scheme. The submission of DPR and DEA documents is obligatory to get qualified call for this scheme.
12. Agro Processing Cluster Scheme: This is sub scheme of Pradhan Mantri Kisan Sampada Yojana (PMKSY) was launched by Ministry of Food-processing of India in the motive of encouraging and supporting young entrepreneur groups in the form of clusters to establish food processing units in modern infrastructure. For 5 startup units the minimum aggregated investment should be up to 25 crores. The funds under schemes will be granted by PEA (Project execution agency) and funds will be released in four installments. To set-up, the startup should have at least 10 acres of land and either the purchase or lease expenditure of land will not be included in fund reimbursement.
Overall the wide categories of startups schemes are educating more about the contribution by the government. These various schemes are helping us to realize the scope and impact of startup ecosystem in India. These startup schemes will play an essential role in providing recourses for ventures looking for financial assistance. By recognizing the benefits of these government schemes and guidance, without any exception startups will strike harder for massive development in innovation and technology of India by ensuring their participation which results in enhancement of wealth in the country in the form of GDP.
As a young entrepreneur at the inception stage looking for establishing startup, it is essential to stay informed and updated about the schemes and regulations.
Let’s take a deep dive into major schemes by the Government of India that plays a significant role in entitling startups with great impact.
1. Startup India Seed Fund Scheme (SISFS): SISFS is a flagship scheme under Startup India initiative. The scheme was exposed on January 16th, 2021 in the Startup India International Summit and notified on January 21st, 2021. The scheme was aggregated by Department for promotion of Industry and Internal Trade (DPIT) to give financial endorsement of an expenditure of Rs.945 crore rupees for startups based on Proof of concept, Prototype development, Product trials, market entry and commercialization sectors. Startups initiated in sectors that have great social impact would be given priority than other sectors. To possess the fund from this scheme, the eligibility is to register and approve with Department for promotion of Industry and Internal Trade (DPIT) within less than 2 years at the time of application.
2. IREDA-NCEF Refinance Scheme: Indian Renewable Energy Development Agency (IREDA) scheme providing refinance funds for Biomass Power and Small Hydro Power Projects. The allowance rate of interest and the funds are drawn from National clean energy fund (NCEF). The main objective of the scheme is to support many renewable energy projects to ensure clean and sustainable energy. The eligibility criterion for this scheme is the renewable units should have an experience in operating energy systems for 2 years in defined project. The consolidated amount shall be reminisced by IREDA in account of the startup project unable to meet the guidelines.
3. Promoting Innovations in Individuals, Startups and MSMEs (PRISM): PRISM is a scheme governed by Ministry of Science and Technology of India, aims to support individual innovators and startups by providing technical guidance, tutoring and financial reimbursement. This scheme helps the firm or organization to permit immersive development in various sectors such as healthcare, Green Energy, Energy Storage systems, and more. Any Indian citizens with innovative ideas can apply to avail the PRISM scheme. Based on the technological phases the funding will be differing and the maximum amount of financial support will be up to 50 lakhs or 50 percent in total cost of project.
4. Venture Capital Assistance Scheme: Venture capital assistance scheme is a financial support providence scheme running by ministry of Agriculture and farmers. This scheme provides capital assistance for startup companies to meet the finance requirement to implement the agribusiness ventures to promote their entrepreneurship with the collaboration of farmers. They provide finance endorsement for the projects which has expenditure from 15 lakhs and up to 500 lakhs. Additionally it provides guidance and technological assistance throughout the process. The eligibility to apply for the scheme is the startup should have a 51 percent of shareholdings by Scheduled Caste entrepreneurs over 6 to 12 months of entity."The success of young entrepreneur will be the key to India’s transformation in the new millennium” – Dhirubhai Ambani
5. Technology Development Fund: The scheme of Technology Development Fund has been established by Indian Ministry of Defence to uplift the technical systems in defence technologies. They provide financial funds for startups by allowing the stakeholders and new industries to upgrade the systems in defence industry. To apply for this scheme, the startup must be registered with DPIT and produced with one of state or central government attached incubators. The controller of the startup should be an Indian citizen and would not acquire any funds for similar projects from the government. Through this scheme the registered startup can receive investment funds up to 10 crores.
6. Support for International Patent Protection in Electronics Information Technology (SIP-EIT): The SIP-EIT scheme was launched by ministry of the department of Electronics and Information Technology of India. The scheme provides financial assistance to enterprises and technology startups which are integrated for enhancement in patient protection in Electronics and Information Technology sector. This scheme allows the stakeholders to encourage the innovation and advancement by providing maximum reimbursement of 15 lakhs per project or 50 percent of total expenses. To avail the benefits of these schemes the startup must be registered under the government of MSME development Act of 2006.
7. Digital India GENESIS: To find and support successful startups in tier-I & II cities, the ministry of Electronics and Information Technology launched a scheme called Digital India GENESIS under the steamship scheme of Digital India Innovation to gain prominence of collaboration among innovative startups in India with an outlay of 750 crores which was started in the aim to integrate 10,000+ tech startups over the period of next 5 years.
8. Extra Mural Research Funding: The Board of Science and Engineering under the Ministry of Science and Technology launched the Extra Mural Research Funding scheme to provide funds to research and development based startups to promote and strengthen the field of science with most innovative solutions. Along with the funds for the period of 3 years, the scheme provides scientific research support for the startups to regulate their performances. The eligibility criteria to apply for this scheme is the applicant must be Indian citizen. Foreigners can also apply if they meet the requirements of Science and Technology board’s qualification. The application process will be held twice a year gradually during July and December. After completing the application process, the respected applicant selected by advisory department will get confirmation call within six months.
9. Drugs & Pharmaceutical Research: As India contributes in export of 3.5 percent in drugs and pharmaceuticals globally among 200+ countries, the ministry of science and technology of India takes initiative to increase the capability of the industry by encouraging new startups to ensure growth. The scheme provides financial reimbursement to R&D institutes and pharmaceutical companies to build up their mechanism and infrastructure to enhance country’s pharmaceutical industry. It provides 50:50 sharing in financial expenditure. The eligibility criterion to apply for this scheme is to be registered and granted from the DPT (Department of science and technology) by necessarily meeting its terms and conditions. The ownership of the property should have capacity to meet the 30 percent of recurring expenditure.
10. Sustainable Finance Scheme: The scheme was introduced by SIDBI (Small Industries Development Bank of India) under the Ministry of Finance to provide financial support for energy efficiency and clean energy startups. The main objective of the scheme is to support the new micro, small and medium enterprises to strengthen the renewable energy projects. To avail the benefits of scheme the original manufacturer should be already registered with MSME or previous product supplier of MSME, and the waste management expense should be included in total expenditure. Under the scheme the eligible startups can claim the amount from 10 lakhs up to 150 lakhs per project.
11. 4E (End-to-End Energy Efficiency): The scheme was launched on special occasion of ‘World Environment Day’ in 2014. The scheme was governed by SIDBI under the ministry of finance for execution of energy saving technologies. To achieve this factor, the scheme provides funds for startups to fulfill the financial needs up to 2.5 lakhs in building mechanism and management works. Startups running for less than 3 years underservice and manufacturing sectors only eligible to apply for this scheme. The submission of DPR and DEA documents is obligatory to get qualified call for this scheme.
12. Agro Processing Cluster Scheme: This is sub scheme of Pradhan Mantri Kisan Sampada Yojana (PMKSY) was launched by Ministry of Food-processing of India in the motive of encouraging and supporting young entrepreneur groups in the form of clusters to establish food processing units in modern infrastructure. For 5 startup units the minimum aggregated investment should be up to 25 crores. The funds under schemes will be granted by PEA (Project execution agency) and funds will be released in four installments. To set-up, the startup should have at least 10 acres of land and either the purchase or lease expenditure of land will not be included in fund reimbursement.
Overall the wide categories of startups schemes are educating more about the contribution by the government. These various schemes are helping us to realize the scope and impact of startup ecosystem in India. These startup schemes will play an essential role in providing recourses for ventures looking for financial assistance. By recognizing the benefits of these government schemes and guidance, without any exception startups will strike harder for massive development in innovation and technology of India by ensuring their participation which results in enhancement of wealth in the country in the form of GDP.
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