Startup Schemes in India 一 Flowering a rock solid bed!

The Startup India Scheme was launched by the Indian government in 2016. The development of companies, the creation of jobs, and the production of money are the key goals of Startup India. Startup India has launched a number of initiatives aimed at fostering a thriving startup environment and changing India into a land of job creators rather than job seekers. The Department of Industrial Policy and Promotion is in charge of these initiatives (DPIIT).

“Take up one idea. Make that one idea your life, think of it, dream of it, live on that idea, let the brain, muscles, nerve, every part of your body be full of that idea and just leave every other idea alone. This is the way to success.”

 一  Mr Narendra Modi, Prime Minister of India

India is a young country, where the majority of the population is between the ages of 25 and 35. In recent years, as a developing economy, we have seen a substantial growth in the number of startups. India has the third largest startup ecosystem in the world, with around 2-3 tech startups being born almost every day. The startup ecosystem has been boosted by a number of schemes, campaigns, benefits and financial assistance provided by the Indian Government. 

These include campaigns like Make in India, Atal Innovation Mission AIM – to promote Entrepreneurship through Self-Employment and Talent Utilization (SETU); schemes like SAMRIDH, Startup India Seed Fund Scheme, Pradhan Mantri Mudra Yojana; benefits like tax exemptions under section 80-IAC, section 56 of the Income Tax Act; and financial assistance including a fund as venture capital for startups.

Besides the creation of job avenues, startup schemes by the Indian Government provide various kinds of financial and non-financial assistance. In January 2021, Mr. Narendra Modi launched the Startup India Seed Fund worth Rs 1,000 crores to support aspiring and rising entrepreneurs in India. The union budget of 2022 mentions a reserved fund of Rs 283.5 crores for the same. In August 2021, the Start-up Accelerators of MeitY for pRoduct Innovation, Development and growth (SAMRIDH) programme was launched by MeitY to help startups connect to customers, investors and international avenues. The Indian Government aims at raising the MSME’s (Micro, Small & Medium Enterprises) contribution to GDP to 50% by 2024 as compared to 29% currently. There have been various schemes introduced over time to support startups and MSME’s. 

The most important of these schemes include 一

• Pradhan Mantri Mudra Yojana where loans up to Rs 10 lakhs can be availed from micro-finance institutions and non-banking financial institutions at low interest rates; 

• Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE) which provides collateral-free loan up to Rs 1 crore to eligible MSME’s and startups;

• Credit Linked Capital Subsidy for Technology Upgradation (CLCSS) where the government provides to startups and MSME’s a 15% subsidy for investment up to Rs 1 crore for upgrading technology; and understanding that design is an important and crucial aspect of a startup

• The Design Clinic for Design Expertise to MSMEs provides aid 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 about design.

Not only the government, startups in India have been supported by the corporate sector as well. Partnerships and Investments in startups by established companies has risen over time. For example, Goldman Sachs provides business education and monitoring to women entrepreneurs all over the world and helps them access capital. Facebook, in partnership with Startup India disbursed grants of $50,000 to top 5 selected startups. This is indicative of the fact that people today are willing to step into creating their own business and have support of the government and fellow corporates from incorporation to finance and finally mentoring.

How does the Union Budget 2022 act as an added Bonus?

The Budget comes as the Indian economy recovers from the epidemic, with Sanjeev Sanyal, the Ministry of Finance's Principal Economic Advisor, asserting that the economy is now performing better than it was before the outbreak. By widening the scope of PM Gati Shakti's master plan for developing "comprehensive infrastructure," Budget 2022 raised capex spending by 35% to enhance seamless multimodal connectivity and logistical effectiveness.

The budget recommended steps worth more than 30% of the current GDP to help all MSMEs recover from the epidemic. ECLGS (Emergency Credit Line Guarantee Scheme) has also been extended till March 2023, with Rs 50,000 crore allocated to tourism and related industries.

The Union Budget also includes several incentives for new businesses. As per academics and industry observers, some of the measures were beneficial. The one-year tax-deduction period for new businesses has been extended, which is a very good development in my opinion. Similarly, the newly formed industrial company will be taxed at a rate of 15%. The incorporation period has been extended to 31-3-2024, an increase of one year. This will further boost manufacturing activity.

The budget's "one station, one product" strategy would aid local distribution networks, resulting in major benefits for small farmers and MSMEs. In addition, the achieved through a number the construction of 100 PM Shakti Cargo terminals over the next three years. This year's budget will boost MSMEs and other small enterprises in general.

Overall, while the Union Budget 2022-2023 did not relieve us of increasing tax burdens, it did give some assistance to businesses and entrepreneurs that were affected by the epidemic. This will assist to develop good views toward entrepreneurs while also incentivizing and nurturing the startup ecosystem.