Top Government Programs for Startup Entrepreneurs

India’s startup ecosystem has undergone significant change in the last decade, largely due to government initiatives to encourage innovation and support entrepreneurial ventures. These programs, which range from financial support to regulatory relief, have created a conducive environment for startups to succeed. Raksha BandhanTeam TICE presents key government programs that promote India’s startup growth and act as a protective shield (Raksha Kavach) for entrepreneurs.

Action Plan for Startups in India: A Catalyst for Growth

Launched in 2016 by Prime Minister Narendra Modi, the Action Plan for Startup India is a flagship initiative aimed at promoting entrepreneurship and building a robust startup ecosystem in the country. The plan includes several measures to reduce the regulatory burden and provide financial support to startups.

• Financial support: The government set up a fund of funds with a capital of ₹10,000 crore to provide financial support to startups. This fund acts as a catalyst in funding startups by venture capital firms.
• Simplified registration process: Entrepreneurs can now register their companies in just one day, compared to the previous 15 to 20 days. This streamlined process is designed to make it easier for startups to get started.
• Tax exemptions: Startups registered under this plan can avail a three-year tax holiday during which they are exempt from paying income tax on their profits. This measure is designed to help startups reinvest their profits and grow without the burden of tax liability.
• Exemption from capital gains tax: To encourage investment in startups, the plan provides exemptions from capital gains tax provided the profits are reinvested in another startup company.
• Credit guarantee scheme: Startups also benefit from a loan guarantee system that gives them easier access to loans without collateral.
• Faster exit policy: The plan takes into account the high risk nature of startups and includes a simplified exit strategy that enables startups to wind down their operations quickly and with minimal regulatory effort.
• Startup India Hub: This hub acts as a central point of contact for start-up approvals, permits and regulatory requirements, simplifying the bureaucratic jungle for new companies.

What is Startup India Seed Fund Scheme (SISFS)

The Seed capital fund for Startup India (SISFS) was created to provide financial support to early-stage startups. This program is crucial for startups that need initial funding to develop their products and services.

• Lens: The program aims to build a robust startup ecosystem by providing financial support for proof of concept, prototyping, product testing and market launch.
• Financial support: With an expenditure of ₹945 Crore, SISFS provides funding through appropriate incubators across India. This helps startups in their critical early stages and enables them to focus on innovation and market penetration.

What does the Atal Innovation Mission (AIM) do?

The Atal Innovation Mission (AIM) is another government initiative aimed at promoting a culture of innovation and entrepreneurship across the country.

• Innovation centers and laboratories: AIM supports the establishment of Atal Tinkering Labs, Incubation Centres and Innovation Centres. These centres encourage creativity and innovation among students and budding entrepreneurs.
• Impact on the entire nation: So far, 14,916 schools have been selected for the Atal Tinkering Laboratories, 4,875 schools are already in operation and each receive a grant of ₹12 lakhs.

What is the SAMRIDH program?

The SAMRIDH programme, which is supported by the Ministry of Electronics and Information Technology (Meity)aims to help software startups scale their products for the global market.

• Financial support: Startups receive up to ₹40 lakhs in financial assistance to enable them to access Indian and global markets.
• Support network: The program also creates a platform for collaboration between venture capitalists, entrepreneurs and mentors and offers comprehensive support to start-ups.

What is the eBiz portal for startup entrepreneurs?

The eBiz portal is India’s first online platform for government-business collaboration and is modernizing the business environment in India.

• Everything from one source: Developed by Infosys and launched by the Ministry of Commerce and Industry, this portal serves as a one-stop shop for investors and the business community, simplifying processes and improving business conduct.

India’s startup ecosystem is thriving thanks to government programs such as Startup India, Atal Innovation Mission, SISFS, SAMRIDH and eBiz Portal. These initiatives provide a powerful mix of funding, mentoring and regulatory support, thereby encouraging innovation and entrepreneurship. By creating an enabling environment, the government has empowered Indian startups to make a significant contribution to the country’s economy. As these initiatives continue to evolve, they will play a critical role in shaping the future of entrepreneurship in India.