If there is one thing every country is trying to boost, it is its economy and they are trying to make available government schemes for small businesses and startups as well. And did you know that Do MSMEs contribute 30 percent to India’s GDP?
The government of India believes that MSMEs are capable of contributing 50 percent to the GDP by 2024. And to support this goal, the Ministry of Micro, Small, and Medium Enterprises has launched various Government schemes.
If you’re a startup or a small business owner, we understand the fear of being stuck in the loop. This article will guide you about the top government schemes for your startup and small businesses.
1- Zero Defect Zero Effect (ZED) Scheme
The whole point of liberalization in India was to introduce businesses in India to the foreign market and have them face competition. The zero Defect Zero Effect scheme aims to improve the quality of the products manufactured by Indian businesses.
If the MSMEs in India want to survive the competition, they need to be able to meet the quality checks through world-class manufacturing processes.
Thus, this government scheme is provisionary of tools, financial assistance, technology, etc. The ZED scheme also offers certification and supports businesses throughout the climb up the ladder of maturity assessment.
2- ASPIRE – A Scheme for the Promotion of Innovation, Rural Industries, and Entrepreneurship
This government scheme was established to create a network that would build technology and incubation centers across the nation. This would accelerate and encourage entrepreneurship in the new business space and meet the social needs of the agriculture business industry.
It has been instrumental in setting up livelihood business incubators by providing a 100% one-time grant. The grant will cover the cost of plant and machinery or give up to 100 lakh Rupees INR, considering whichever is lesser.
The ultimate goal of ASPIRE government scheme is to provide people in rural areas the knowledge of sustainable livelihood through agricultural practices, help them in establishing their own businesses and foster economic growth from the ground level.
3- Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)
With advancements in technology, the GOI is aware that technology is the one tool that has the capability of triggering growth in MSMEs and startups and building their potential in competing in the global arena.
Thus, the launch of Credit Linked Capital Subsidy for Technology Upgradation is a government scheme that provides financial help to small businesses in upgrading technology and implementing technological platforms for business purposes.
The scheme provides small businesses with a 15% subsidy upon the investment of 1 crore in technology upgradation while also covering more than 7500 products and services.
4- Pradhan Mantri Mudra Yojana
The scheme of Pradhan Mantri Mudra Yojana is supported by a non-banking financial company that provides support to the micro-enterprise sector. The financial aid provided by Micro Units Development and Refinance Agency (MUDRA) supports institutions of micro units by lending up to INR 10 lacs.
The provision of loans is categorized based on the development stage, the financial needs, and the age of the business into divisions of Tarun, Kishore, and Shishu. The loan can be availed by the businesses by submitting these details without any collateral security.
This government scheme provides loans to, non-farm and non-corporate small business owners such as store owners and traders, and even vendors in order to help them generate employment and income. Additionally, businesses can avail of means of travel, working capital, and other loans based on their needs
5- Multiplier Grants Scheme (MGS)
DeitY (Department of Electronics and Information Technology) launched the Multiplier Grant Scheme in order to encourage industrial collaboration between academic institutions and governmental research institutions. The collaboration would be carried out in terms of research and development of products and packages that would also develop the creation of indigenous products.
The scheme also aimed at bridging the large gap between the quality of goods made in India and imported products through R&D. The scheme would also provide grants for the production of up to 2 crores for each project for the duration of fewer than 2 years.
6- Single Point Registration Scheme (SPRS)
The National Small Industries Corporation handles the SPRS scheme and supports the MSME sector by increasing the output sold by the sector. With the help of this government scheme, the MSMEs are eligible to register with the NSIC for purchases made by the government who is the largest purchaser of a large array of items.
The MSMEs that are registered are exempt from the Earnest money Deposit which acts as a security deposit. Thus, they are not required to deposit any amount whatsoever before bidding for projects.
MSMEs also extract other benefits from this scheme such as free-of-cost tender and tender participation and a minimum 25 percent limit purchase by ministries and other governmental organs.
7- Extra Mural Research or Core Research Grant (CRG)
Originally called Extramural Research Funding, the scheme of CRG was launched decades ago following the establishment of the Science and Engineering Research Board (“SERB”). It still continues as one of the most advantageous schemes that have been launched for the MSME’s progress.
This government scheme basically provides aid to academic organizations and institutions and research labs in carrying out research activities in the technology and engineering fields. It has led to competitive research findings and growth in manufacturing and the usage of the MSME sector.
8- Support for International Patent Protection in Electronics and Information Technology (SIP-EIT)
The department of Electronics and Information Technology has also launched another government scheme called the SIP-EIT scheme. The aim of this scheme is to fund tech startups in India in case of filing International patents.
The scheme advances an interest in innovation and brand recognition. It also helps the companies recognize and forward their potential for Intellectual Property Protection. You are eligible for financial assistance for only the electronics and communication tech department.
You can apply for it at any stage of the patent process and the reimbursement limit is 50 percent of the total expenditure incurred in process of filing or INR 15 lacs for every invention.
9- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is provided directly by the MSME Ministry of Government of India. The aim of this government scheme is to deliver credit capacity to small businesses and startups with the help of collaborative efforts from the Small Industries Development Bank of India.
The scheme would aid in providing small and micro businesses with subsidized interest rates in loads. It would also simultaneously cover non-fund-based credit of up to INR 200 lacs for eligible borrowers. The scheme provides primary service to manufacturing businesses thus availing loans in form of working capital.
10- Design Clinic Scheme
It was always inevitable that the importance of design and innovation would be recognized globally. Thus, with the latest advances in the past decade, the GOI has come to value the importance of design in the growth of small-sector industries.
The Design Clinic scheme was launched to encourage MSMEs to become more design-centric and apply the same approach for their growth. It has helped the sector in creating a sustainable ecosystem with help of training and developmental activities.
The government also provides monetary aid of up to INR 60,000 for design seminar attendees or up to 75 percent of the seminar’s cost for the conducting party. Through this government scheme, entrepreneurs are expected to provide the same opportunities to every employee of their company for rapid recognition and use of these approaches.
The scheme ultimately funds learning opportunities, and networking opportunities, and increases competitiveness in product designs.
Focus on Small businesses and Startups for Economic Growth
Startups and small businesses actually have extremely unique ideas and concepts that they apply. They are looking for scalable business models and it is important that they are supported financially.
India has seen a rise in startup culture, especially after the Make in India campaign. The ultimate goal of growth of entrepreneurship is met by the above-mentioned schemes in order to grow the Indian economy at large.
Startups and small businesses have contributed to sustainability and stability in the market and the creation of new employment opportunities is always appreciated. These schemes also make it easier for a startup to take off and flourish.
The extremely unstable economy and the job market are balanced somehow by the presence of startups. And unsurprisingly, some of these startups grow out to be large International companies later on which brings in FDIs.
The schemes mentioned in this editorial serve a dual purpose: they endorse and profit current startups and enterprises while also encouraging and enabling young entrepreneurs, graduates, and executives from all walks of life to start enterprises and take a step forward with an Aatmanirbhar Bharat.
The aim is to empower India’s talent to believe in their new ideas, put them into action, and eventually turn them into an effective and prospering businesses. These approaches have proven to be quite effective in their goals, with India ranking third (three) in the world in terms of the number of startups.