List of Union Government Schemes for Businesses in India

By Mayashree Acharya

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Updated on: Jul 22nd, 2025

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2 min read

The Union Government of India has launched various schemes to support and promote businesses. Under these schemes, the Government provides financial and structural support to address the challenges faced by businesses during their establishment or growth phase.

Implemented via Ministries, Financial Institutions, Joint Ventures, PSUs, and Banks, these schemes aim to ease business setup and growth. The below article covers the key Union Government Schemes for Businesses in India.

MUDRA Yojana

  • Small businesses, startups, and entrepreneurs can avail loans under the Pradhan Mantri MUDRA Yojana (PMMY).
  • A Micro Units Development and Refinance Agency (MUDRA) Bank is established under the PMMY to support micro-units by refinancing Micro Finance Institutions (MFIs) and provide loans.
  • MUDRA loans cater to Micro and Small Enterprises (MSEs) in trading, manufacturing and service sectors.
  • MUDRA Yojana offers three loan categories:
    • Shishu: Up to ₹50,000
    • Kishor: ₹50,000 to ₹5,00,000
    • Tarun: ₹5,00,000 to ₹10,00,000 
  • Interest rates of MUDRA loans typically range between 9.60% and 12.45% (fixed quarterly based on RBI policy).
  • The tenure of MUDRA Yojana loans range from 1 to 5 years.

Credit Guarantee Scheme for Startups (CGSS)

  • The Credit Guarantee Scheme for Startups (CGSS) was launched to support startups facing funding challenges and high-risk perception from banks. 
  • This scheme provides collateral-free credit guarantee for loans to startups.
  • The startups must be recognised by the DPIIT.
  • It offers a credit guarantee of up to ₹10 crore per beneficiary for financial assistance. 
  • Credit guarantee is provided for working capital, term loans, debentures, and venture capital.

Agriculture Infrastructure Fund (AIF) Scheme

  • The Agriculture Infrastructure Fund (AIF) provides credit guarantee for post-harvest or farm-gate infrastructure loans in agriculture and related sectors.
  • Farmers, Agri-entrepreneurs, Farmer Producer Organisations (FPOs) can apply for this scheme. 
  • An interest subvention of up to 3% is provided on all loans of up to ₹2 crore.
  • The term of interest subvention is for a maximum of 7 years.
  • A loan moratorium period of 6 months to 2 years is also available. 

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

  • Under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), Micro and Small Enterprises (MSEs) can avail credit guarantees for the credit facilities provided by the Member Lending Institutions (MLIs). 
  • MSEs engaged in services and manufacturing are eligible under this scheme.
  • Credit guarantees are provided for credit support of up to ₹10 crore from 1 April 2025. 
  • There is no requirement of collateral security or third-party guarantees to avail credit support under this scheme.
  • Working capital loans and term loans are included under this scheme.

Prime Minister Employment Generation Programme (PMEGP)

  • The Prime Minister Employment Generation Programme (PMEGP) is a credit-linked subsidy programme for the establishment of micro-enterprises in the non-farm sector to generate self-employment opportunities.
  • Under this scheme, a capital subsidy of 15-35% are provided for setting up of on new micro businesses.
  • The capital subsidy is provided for manufacturing sector projects of up to ₹50 lakh and service sector projects of up to ₹20 lakh.
  • The minimum beneficiary contribution requirement is 10% of the project cost for general category borrowers and 5% for special category borrowers.
  • A flexible repayment tenure of 3 to 7 years is available under this scheme.

Stand Up India Scheme

  • The Stand Up India scheme provides bank laons to Schedule Caste (SC), Schedule Tribe (ST) and women entrepreneurs for setting up new enterprises in manufacturing, services, trading sector and agri-allied activities.
  • A working capital and term loan between ₹10 lakh to ₹1 crore is provided under this scheme.
  • The loans are provided to finance 85% of the project cost.
  • The repayment period of the loans is 7 years with a moratorium period of 18 months. 
  • Overdraft facilities are available on working capital loans.

Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme

  • The PMFME scheme addresses the challenges faced by the unorganised sectors in the food processing industry.
  • Under this scheme, credit-linked capital subsidy, grants for branding and marketing and seed capital is provided for micro food processing units.
  • Individuals, micro food processing units, Farmer Producer Organisations (FPO), Self-Help Groups (SHGs) and Cooperatives can apply.
  • It provides credit-linked capital subsidy of 35% of the eligible project cost up to a maximum of ₹10 lakh per unit for upgradation or setting up of new units.
  • It provides 50% of financial grant for branding and marketing to groups of FPOs, SHGs, Cooperatives or a Special Purpose Vehicle (SPV) of micro food processing enterprise.

Multiplier Grants Scheme

  • The Multiplier Grants Scheme (MGS), implemented by the Department of Communication and IT, promotes R&D collaboration between industries and academic or research institutions to develop commercially viable products. 
  • This scheme bridges the gap between R&D and commercialization, encouraging industry-oriented research at institutes. 
  • If an industry funds R&D for a product, the Government provides grants for projects up ₹2 crore. 
  • Industries and institutions must jointly submit proposals for funding. 

Support for International Patent Protection in Electronics & Information Technology (SIP-EIT)

  • The SIP-EIT scheme provides financial support to MSMEs and technology startups for international patent filing, fostering innovation and global recognition. 
  • This initiative helps protect innovative works and enables businesses to secure international patents. 
  • The government provides up to 50% of total patent cost, with a limit of ₹15 lakh limit to MSMEs. 
  • It also supports growth in the ICT & electronics sector by funding patent applications.

Click here to know more about different Union Government Schemes launched by various ministries.

The Union Government Schemes for Businesses provide financial support to MSMEs, startups and entrepreneurs in India. These schemes facilitate support in the form of credit support and subsidies. They help in the growth of businesses in India, provide employment oppotunities and boost the economic growth of the country.

Frequently Asked Questions

Who is eligible for the MSME subsidy?

All micro, small and medium enterprises who have Udyam registration are eligible to obtain MSME subsidy. MSMEs are those enterprises engaged in manufacturing and services whose investment in plant and machinery or equipment does not exceed ₹125 crore and turnover does not exceed ₹500 crore.

Which is the best government scheme?

There are various government schemes launched in India by Central and State Government, which provide financial support for businesses. Some of the popular government schemes for businesses are MUDRA Yojana, CGTMSE, CGSS, PMEGP, PMFME, etc. The best government scheme for any business, depends on the financial assistance required by the business and the nature of the business.

How to get money from government for business?

Business can apply for loans under the MUDRA scheme, which is a Central Government Scheme. The MUDRA scheme provides loans to MSMEs of up to ₹10 lakh. Additionally, MSMEs, businesses, and startups can apply for financial assistance provided by the National Small Industries Corporation (NSIC) under its various schemes.

What is the central government scheme for small business?

The Central Government has launched various schemes for small businesses which help them obtain loans at low interest rates and provide credit guarantee for loans. Some of the prominent Central Government Schemes for small business are MUDRA Yojana, Agriculture Infrastructure Fund (AIF) Scheme, CGTMSE, PMEGP, Stand Up India Scheme, etc., which help entrepreneurs to establish and grow businesses by obtaining financial support quickly.

How to get startup funding?

Startups can get funds by applying for loans under the MUDRA Yojana, Startup India Scheme or business loans offered by various banks. 

About the Author
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Mayashree Acharya

Senior Content Writer
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I am an advocate by profession and have a keen interest in writing. I write articles in various categories, from legal, business, personal finance, and investments to government schemes. I put words in a simplified manner and write easy-to-understand articles. Read more

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