List of Government Schemes for Startups in India

The term Start-up refers to a company that is in the first stages of its overall operations. Essentially, it is a Company in its nascent stage. The founders of these Start-ups develop a product/service, which they believe has a demand in the marketplace.

We all have been hearing the term ‘Start-ups’- in news applications, social media, and even in day-to-day parlance. This term has been so widespread because of the amount of money involved in its regular transactions, for example, raising money from foreign investors, the founder’s taking a high salary, or their IPOs being listed on Stock Exchanges. But what exactly is a Start-up, and what companies are classified as Start-ups?

Start-ups in India have been a big factor in contributing to our economy. They provide a large number of Employment opportunities to people of our country. Currently, start-ups and MSMEs (Micro, Small and Medium Enterprises) in India provide jobs to 11 crore Indians.

Due to this, the Government of India has incentivized start-ups and MSMEs, so that they can foresee a growth of 15 crore Indians being employed in this sector by the year 2024. The Government has introduced several schemes that help the growth and sustainability of start-ups. To know more about the eligibility criteria for a start-up, the government schemes, and how schemes can help the overall development of the employment sector of our country.

Eligibility criteria of a Start-up

A company is recognized as a start-up only if it is able to fulfill the following conditions:-

  1. The start-up in question is required to be registered as a Private Company, LLP, or Partnership Firm
  2. The start-up shall not be a by-product of a company/corporate restructuring
  3. It should not be older than 5 years
  4. Annual turnover should be less (or equal to) Rs. 25 crores.
  5. The company should be involved in a new product or service


  1. Pradhan Mantri Mudra Yojana: This scheme aims to provide funds and loans at low rates of interest to start-ups and MSMEs. Under this scheme, the Micro Units Development and Refinance Agency Bank (MUDRA) provides low rates to micro-finance institutions and non-banking financial institutions. In turn, these institutions provide low-interest loans to start-ups and MSMEs in India. One can avail of a loan of up to 10 lakh under this scheme.
  2. Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTSME): This scheme is considered to be one of the biggest start-up loan schemes launched by the Ministry of MSME in India. Under this scheme, start-ups and MSMEs can get a collateral-free loan of up to Rs. 1 Crore. This loan is dispersed through the trust of CGTSME, which is backed by the Ministry of MSME and Small Industries Development Bank of India.
  3. ZED Certification Scheme: The Zero Defect and Zero Effect mission (ZED) is a financial and technological incentive provided to MSMEs and start-ups in the process of manufacturing. The Government under this scheme aims to create better products, with high quality and virtually zero defects. The Government provides extraordinary manufacturing processes and excellent technology to ensure that the products are best in class.
  4. Credit Linked Capital Subsidy for Technology Upgradation (CLCSS): Under this scheme, the Government provides financial assistance to MSMEs and start-ups to upgrade their technology and implement an advanced technological interface/platform for their businesses. Under this scheme, the Government provides a 15% subsidy for up to Rs. 1 crore investment. More than 7500 products/services are covered under this scheme.
  5. Design Clinic for Design Expertise to MSMEs: The Government, through this scheme, envisages inspiring start-ups and MSMEs to experiment and try out new designs for their products. The Ministry of MSME has even created a Design Clinic for triggering design-related expertise for start-ups and MSMEs. Under this scheme, the Government provides a financial incentive of up to Rs. 60,000 for attending design seminars, and up to Rs. 3.75 lakh (or 75% of the cost of a seminar) wherein the entrepreneur and/or their team can learn and implement design theories and learn more about them.

The Government of India, through these schemes, wants start-ups and MSMEs in India to succeed at the global level. They want budding entrepreneurs to consider self-employment as a lucrative career option, and evidently, they are leaving no stone unturned in order to make this success felt across the world.

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