To promote business and provide support to them, the Union Government of India has launched schemes specifically for helping the business in India. These schemes come under the category of Union Government Schemes for Businesses in India.
The businesses established in various fields help for the economic growth and development of the country and also gain recognition at the global level. Currently, entrepreneurship and establishment of their own businesses are gaining momentum. Through the establishment of innovative business or startups, the economy of the country will flourish.
But, starting a business is not easy. The Government realises the difficulties faced by the business owners and startups to establish and run them. To ease the burden and encourage new business setup and startups, the Government has launched various schemes for business.
The Government implements these schemes with the help of various Ministries of the Government, Financial Institutions, Joint Venture Companies, Public Sector Undertakings, Banks etc. Some of the Union Government Schemes for Businesses are listed below.
Rashtriya Krishi Vikas Yojana
Rashtriya Krishi Vikas Yojana (RKVY) is an umbrella scheme which was initiated in 2007 for achieving a holistic development in the field of agriculture and allied services. On 1st November 2017, the Government revamped Rashtriya Krishi Vikas Yojana as Rashtriya Krishi Vikas Yojana - Remunerative Approaches for Agriculture and Allied Sector Rejuvenation (RKVY - RAFTAAR). This scheme aims at promoting agripreneurship and agribusiness. It promotes in helping for the betterment of agricultural activities by providing financial support and nurturing the incubation ecosystem to the agribusiness.
This scheme encourages individual/s to set up a business related to agriculture or become an entrepreneur in the field of agriculture. The incubators provided under this scheme will guide the agripreneurs through the various phases of the business life cycle and provide them with an opportunity to generate innovations in agricultural activities and allied agricultural services.
Under the innovation and agriprenurship component of RKVY, the Ministry of Agriculture is funding startups for the year 2020-21. The startups can belong to various industries like agro-processing, digital agriculture, farm mechanism, fisheries, dairy, artificial intelligence etc. The scheme offers the benefits of Agripreneurship Orientation, Seed-stage funding of RKVY – RAFTAAR Agri-Business Incubator and Idea/Pre-Seed Stage Funding of Agripreneurs.
A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE) was launched to set up incubation centres and network of technology centres to accelerate entrepreneurship and to promote startups for innovation in agro-industry.
This scheme helps and encourages the entrepreneurs and startups in the agro-industry by providing incubation facilities to their business, funds and making available a network of technology. The components of ASPIRE are Livelihood Business Incubators, Technology Business Incubators, and a fund to be managed by Small Industries Development Bank of India (SIDBI).
The funds under this scheme are managed by SIDBI, Coir, Khadi industries, etc. as the projects undertaken in this scheme are prominent means of livelihood for millions of people in India. Livelihood Business Incubators creates employment at the local level and aims to reduce unemployment. Technology Business Incubators concentrate on increasing centres which helps to build technology networks. SIDBI plays an important role in managing this scheme as a whole and provides support to other components of this scheme which in turn helps to generate income to the people by increasing employment opportunities.
Micro Units Development and Refinance Agency Bank (MUDRA Bank) or Mudra Loan, is a new financial institution set up by the Government of India. It is set up under the guidelines of Pradhan Mantri MUDRA Scheme (PMMY). The purpose of Mudra Bank is the development of micro-units and providing refinance to the Micro Finance Institutions. The loans are provided to encourage entrepreneurship and startups. The mudra loans are given to small manufacturers, small entrepreneurs, farmers, start-ups, individuals, shopkeepers, vendors, restaurants and bakeries etc.
The interest rates of the mudra loans are not fixed, it is based on RBI’s policy which decides every quarter. The interest rates are generally between 8.40% and 12.45% for 1 to 5 years accordingly. Three products, i.e. Shishu, Kishor and Tarun, are launched by the mudra banks which signify the stage of growth and funding needs for the micro-units, entrepreneurs or startups. Loans up to a limit of Rs.50,000 is provided under Shishu. Kishor offers loans from Rs.50,000 to Rs.5,00,00. Loans from above Rs.5,00,000 up to Rs.10,00,000 are provided under Tarun.
Multiplier Grants Scheme
The Multiplier Grants Scheme is implemented by the Department of Electronics and Information Technology. This scheme encourages R&D development in the country. The aim of this scheme is encouraging collaborative R&D between the industries and academics or R&D institutions for the purpose of development of products and packages. This scheme encourages industry-oriented R&D at institutes. It helps to bridge the gap between R&D and commercialisation of a product/package.
Under the scheme, if the industry supports the R&D for development of a product which can be commercialised at an institution level, then the Government will also provide financial support to that product. The Government will provide financial support of up to twice the amount provided by the industry. The industry and institutions jointly submit proposals for getting financial support under this scheme. The total outlay of this scheme is Rs.36 Crores with the Department of Electronics and Information Technology contribution of Rs.24 Crore. The Technology Development Council budget head is used for the implementation of this scheme.
Support for International Patent Protection in Electronics & Information Technology (SIP-EIT)
SIP-EIT provides financial support to MSMEs and Technology Startup units in the field of patents. This scheme supports MSMEs in international patent filing procedure for encouraging innovation and recognising the values and capabilities of a global international patent. This scheme is established to help MSMEs and Technology Startup Units for the international patent protection of their innovative works.
It is an initiative of Department of Electronics & Information Technology, MEITY, Government of India for facilitating MSMEs and Technology Startup units for filing international patents by providing financial support to them. It also helps in capturing growth opportunities in the Information Communication Technology & Electronics sector.
Credit Guarantee Scheme for Startups (CGSS)
Credit Guarantee Scheme for Startups functions under the trusteeship management of the National Credit Guarantee Trustee Company. To give a boost to the startup industry, the Government of India announced this scheme. It is not easy for an entrepreneur to set up a business/company. The two significant difficulties faced by them is lack of adequate funding and high-risk perception of the banks towards them. To ease the challenges faced by them, the Government launched this scheme.
This scheme is launched with a contribution of Rs.2000 crore, to enable the startups to obtain collateral-free loans to start their business. A guarantee cover is provided under this scheme for an agreed period upon the credit facility. A credit guarantee of maximum Rs.5 crore is offered to every eligible beneficiary, which includes assistance such as working capital, debentures, term loan, venture capital, etc.