Startups are the lifeblood of innovation and economic growth. They often begin as small ideas with big potential. India’s startup ecosystem has experienced remarkable growth over the past decade, transforming the country into a global hub for innovation and entrepreneurship. This remarkable growth can be attributed, in part, to the various Government initiatives aimed at nurturing and supporting startups. The government acknowledges the significance of startups as catalysts for innovation and economic expansion. Diverse ministries and departments have implemented programs and government policies to offer financial aid, infrastructure development, and regulatory assistance to startups. These initiatives encompass a wide range of sectors, including technology, manufacturing, agriculture, healthcare, and various others.
Let us also talk about a new term, called 'Policy Tourism.'
It is an initiative by PapSwap and Feeding Trends to connect people with Government policies that could help them orv their business.
In this article, we will delve into 20 government policies that have played a pivotal role in fostering startup success in India.
1. Startup India Initiative (2016):
The Startup India Initiative, launched in 2016, has played a vital role in driving India's growing startup ecosystem. This Government Policy has been a key force in nurturing innovation and entrepreneurship. It's not just about financial incentives and tax exemptions; it's about providing startups with access to a valuable network of mentors and industry experts. This support system significantly accelerates their path to growth and success.
2. Aatmanirbhar Bharat Abhiyan:
Launched as a visionary initiative, Aatmanirbhar Bharat Abhiyan promotes self-reliance and sustainability within India's startup landscape. By encouraging startups to focus on local manufacturing, the government policy aims to reduce the nation's reliance on imports and bolster domestic production capabilities. This not only enhances the resilience of Indian startups but also strengthens the country's economic independence, making it less vulnerable to global disruptions. Through this government policy, startups are empowered to contribute significantly to the "Make in India" movement, ultimately shaping a self-sufficient future for the nation.
3. SAMRIDH scheme:
On the 25th of August, 2021, India rolled out the SAMRIDH scheme, a clever acronym representing "Startup Accelerators of MeitY for Product Innovation, Development, and Growth." This groundbreaking initiative is strategically crafted to extend crucial assistance to accelerators with a mission to spot and nurture potential IT-based startups. The overarching objective is to confront India's challenges head-on while instigating positive social transformation. Within the SAMRIDH scheme, these accelerators will be the recipients of initial funding, reaching up to ₹40 lakh, with an average allotment of ₹30 lakh for each startup in every cohort. This government policy is meticulously tailored to catalyze the growth and advancement of startups, empowering them to efficiently expand their innovative solutions.
4. ASPIRE
ASPIRE, short for "A Scheme for Promotion of Innovation, Rural Industries, and Entrepreneurship," is a Government of India initiative. It's backed by the Ministry of Micro, Small, and Medium Enterprises (MSME). This government policy kicked off in 2015 with a clear mission: to empower budding entrepreneurs in rural zones with the know-how to launch their own businesses and become job creators. Given that a substantial 56% of India's population resides in rural pockets, the government's objective is to kindle the entrepreneurial spirit and creative energy in these areas through the ASPIRE government policy.
5. ATAL Innovation Mission:
The Atal Innovation Mission (AIM) is a forward-looking endeavor driven by the goal of nurturing innovation and entrepreneurial spirit, especially among students and young individuals. A key aspect of this government policy is the creation of strategic incubation centers across the country. These centers act as vibrant hubs where students and budding entrepreneurs can turn their creative ideas into real businesses. AIM doesn't just offer physical spaces; it also connects them with mentors and vital resources needed to support and propel startups in India.
6. Make in India Initiative:
The "Make in India" government policy was launched with a grand vision – to turn India into a global manufacturing powerhouse. For startups, this initiative is a major driving force. It not only encourages them to come up with innovative product ideas but also urges them to manufacture those products right here in India. The focus on local production is a game-changer. It's all about reducing our dependence on imports and boosting homegrown manufacturing. This government policy not only gives a massive boost to the Indian economy but also opens doors for startups to be a part of this exciting "Make in India" movement. It's not just about business; it's about self-reliance and elevating our nation's industrial prowess.
7. Stand-Up India Initiative:
The Stand-Up India government policy puts a significant emphasis on promoting diversity and inclusivity within the world of entrepreneurship. Its primary aim is to provide financial support to startups that are led by women, Scheduled Castes (SCs), and Scheduled Tribes (STs). This program recognizes the importance of giving opportunities to underrepresented groups in the startup landscape. Under Stand-Up India, eligible entrepreneurs from these marginalized communities can access loans and financial support to get their businesses off the ground and expand them. By tackling the financial hurdles often faced by these groups, the initiative not only encourages entrepreneurship but also contributes to their economic empowerment and social advancement. This government policy creates a more balanced and inclusive startup ecosystem in India.
8. Pradhan Mantri Mudra Yojana:
The Pradhan Mantri Mudra Yojana, which began in April 2015 in India, plays a pivotal role in providing much-needed financial support to micro-enterprises and startups, especially those run by individuals facing economic disadvantages. What sets this government policy apart is its thoughtful categorization of loans into three distinct segments - Shishu, Kishore, and Tarun, each tailored to cater to businesses at varying stages of growth. The loan amounts, ranging from ₹50,000 to ₹10 lakh, ensure that businesses of different sizes can find the right financial aid. Importantly, unlike many traditional lending systems, this government policy doesn't demand collateral, which opens doors for a diverse range of entrepreneurs who might lack substantial assets to secure loans.
9. Digital India
Digital India is an ambitious government policy that's been making waves across the nation. It's not just a campaign; it's a vision, a transformational journey toward a digital future. This movement is all about bringing technology and its endless possibilities closer to the people of India. It's about connecting the dots in a vast, diverse landscape and ensuring that the benefits of technology reach even the remotest corners of the country. Digital India isn't just for big corporations; it's for the little guy with a big idea too. Tech startups are flourishing because of this government policy, as it provides them with the digital infrastructure and services they need to thrive in today's fast-paced, tech-driven
10. eBiz Portal
The eBiz government policy, made history as the pioneer electronic government-to-business (G2B) portal, established in January 2013 with a mission to revolutionize and cultivate a business-friendly environment in India. This groundbreaking platform, a collaborative effort between Infosys and the government in a public-private partnership, served as a hub for communication between investors and the business community in the country. eBiz Portal initially introduced over 29 services, spanning across five states: Andhra Pradesh, Delhi, Haryana, Maharashtra, and Tamil Nadu. The government policy's commitment extended further, with plans to incorporate additional services in the future.
11. NIDHI
NIDHI, short for the National Initiative for Developing and Harnessing Innovations, is a dynamic program in India at the forefront of supporting startups and nurturing innovation. Beyond its core support mechanisms like grants, incubation centers, and innovation competitions, NIDHI offers a multifaceted approach. A standout feature within this government policy is the Technology Business Incubator (TBI) scheme. Through TBIs, startups gain access to not only physical infrastructure but also invaluable mentorship and vital resources. NIDHI's holistic approach empowers startups to thrive and innovate in a nurturing ecosystem.
12. Bharat Fund
The Bharat Fund government policy is like a helping hand for startups in India. It doesn’t directly give money to startups, but it works through something called SEBI-registered Alternative Investment Funds (AIFs). Think of AIFs as investment experts who know where to put money. So, instead of picking individual startups, the Bharat Fund spreads its money across a bunch of AIFs. These AIFs, in turn, invest in a mix of different startups. This way, if one startup doesn’t do well, it’s not a big problem because there are others that might succeed. It’s a bit like diversifying your investments to reduce risk. This whole setup isn’t just about money; it’s about boosting the startup world in India. By supporting startups, this government policy encourages people to come up with new ideas and start their own businesses. This means more innovation and more jobs. And when all of this happens, it helps the whole country’s economy grow and get better.
13. Dairy Processing and Infrastructure Development Fund (DIDF)
The National Bank for Agriculture and Rural Development (NABARD) is a big supporter of farmers in India. They do a lot to help farmers, and one of their cool government policy is the Dairy Processing and Infrastructure Development Fund, which they started back in 2017-18. Now, this fund is like a savings account with a whopping 8000 crore rupees in it, and it’s meant to help farmers in the long run. But here’s the interesting part: it’s not just for individual farmers; it’s for groups like Milk Unions, big cooperatives, dairy companies, and some special organizations related to milk. When these groups want to expand their milk-related projects, they can borrow money from NABARD. And guess what? The state government steps in as a sort of “backup” to make sure the money gets paid back if things get tough for the borrowers. And if, for some reason, the borrowers can’t put in their share of the money for a project, the state government comes to the rescue. So, it’s like teamwork between the government, NABARD, and the milk-related groups to help farmers and improve the dairy industry.
14. EPCG
The Export Promotion Capital Goods (EPCG) government policy is a special helping hand for businesses, even startups, that want to sell their stuff in other countries. What it does is pretty cool: it lets these businesses bring in machines and equipment they need to make their products, but they get a discount on the taxes they have to pay when importing these things. The main idea behind the EPCG Scheme is to make it easier for these businesses to make things that are meant to be sold abroad. It’s like giving them a boost so they can compete with other companies from around the world. Now, to be part of this scheme, companies agree to do their best in selling stuff to other countries. They set a goal for how much they’ll sell, and they have to meet that goal over a certain time. This rule makes sure that the machines they import are really used to make things for export, not just for local sales. So, in a nutshell, the EPCG Scheme helps businesses, startups included, reach out to the global market by making it cheaper and easier to get the machines they need to create products for export. This government policy is all about helping them grow and succeed on the international stage.
15. Support for International Patent Protection in Electronics & Information Technology (SIP-EIT)
The Department of Electronics and Information Technology (DeiTY) has rolled out a government policy called "Support for International Patent Protection in E&IT (SIP-EIT)." What it does is offer financial aid to small and medium-sized businesses (MSMEs) and tech startups to help them file patents on a global scale. Now, if you're working in the world of Information Communication Technologies and Electronics, this government policy has your back. It's designed to provide some great perks to folks looking for financial assistance to protect their inventions worldwide. You can get reimbursed up to INR 15 lakhs per invention or half of the total expenses you incurred while filing and processing your patent application, whichever amount is lower. This means they're stepping in to ease the financial load, making it easier for you to bring your innovative ideas to life in these industries.
16. GeM (Government e-Marketplace)
GeM, is a government policy that stands for the Government e-Marketplace, and is a game-changer for startups and businesses in India. It's like an online stage where they can shine and sell their products and services directly to government agencies. What's really neat about GeM is that it takes away a lot of the hassle. It cuts down on paperwork, speeds up deals, and makes everything clear and open. Imagine startups signing up on GeM and instantly catching the eye of government departments, from local ones to the big national players. But there's more! GeM doesn't just bring in a bunch of potential customers; it also makes sure startups get their payments quickly. This is like a financial boost, helping them keep the money flowing. So, instead of worrying about the nitty-gritty, startups can focus on what they do best – creating awesome stuff and offering top-notch services. Plus, it's a win-win setup because the government gets what it needs, and startups get a chance to grow and boost the country's economy.
17. Niryat Rin Vikas Yojana (NIRVIK):
The Niryat Rin Vikas Yojana (NIRVIK) stands as a significant government policy in India, aiming to bolster the export competitiveness of both startups and businesses. Its primary focus is to provide tailored insurance coverage that addresses the unique risks and challenges associated with exporting. NIRVIK directly tackles the concerns that businesses encounter when they venture into international markets. The government policy offers insurance coverage designed to safeguard against a range of risks, including delayed payments from international buyers, quality standard issues, and unexpected geopolitical developments that may affect exports. By providing this protection, NIRVIK serves as a catalyst for startups to confidently explore global markets. This support enables them to concentrate on expanding their international presence without undue worry about potential setbacks.
18. CGTMSE
The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) is a government policy that was established by the Indian government and became operational on January 1, 2000. Its primary purpose is to facilitate access to business loans for micro-businesses, small-scale industries, and startups without the need for collateral. This government policy enables these businesses to obtain loans at significantly subsidized interest rates, all without the requirement of providing any security or collateral. In collaboration with the Small Industries Development Bank of India (SIDBI), the government extends a maximum loan amount of up to INR 100 lakhs through this scheme. This financial support is intended to bolster both new enterprises and rehabilitate existing ones. Mainly targeting manufacturing units, this loan can be utilized as either working capital or a term loan, offering flexibility to businesses. Notably, the CGTMSE has recently recommended reducing the annual guarantee cost for loans up to Rs. 1 crore from a maximum of 2% per year to as low as 0.37% per year, aiming to further incentivize and support entrepreneurship in India.
19. The Venture Capital Assistance Scheme (VCA)
The Small Farmer’s Agri-Business Consortium (SFAC) has initiated the Venture Capital Assistance (VCA) scheme with the aim of supporting farmer-entrepreneurs and fostering the growth of their agricultural businesses. The core objective of VCA is to extend assistance to farmers in the form of term loans. These loans are designed to help farmers fulfill their capital requirements for implementing their agricultural projects. Additionally, VCA places a strong emphasis on training and nurturing agri-entrepreneurs, empowering them with knowledge and skills. Under this government policy, the loan amount provided is set at 26% of the promoter's equity, with a higher limit of 40% for regions with hilly terrain. The maximum loan amount that can be availed through VCA is INR 50 lakhs. In specific cases, such as in the North-East region and hill states like Uttarakhand and Jammu and Kashmir, where projects are promoted by registered farmer producer organizations, the venture capital quantum may be less than 40% of the promoter's equity but remains capped at Rs 50.00 lakhs. This government policy is a significant step in empowering farmers and fostering agri-business development across the country.
20. National Startup Advisory Council (NSAC):
The National Startup Advisory Council (NSAC) is a government policy that is a prominent and high-level advisory body established to comprehensively address the various issues and challenges encountered by startups in India. This council plays a pivotal role in shaping the startup ecosystem in the country, fostering innovation, and promoting entrepreneurship. Comprising experts, industry leaders, government officials, and seasoned entrepreneurs, the NSAC functions as a platform for dialogue and collaboration. It seeks to provide strategic guidance and recommendations to the government on policies, regulations, and initiatives that can further support and nurture the startup community. This government policy aims to create an enabling environment for startups to thrive by identifying barriers, proposing solutions, and facilitating the implementation of measures that can streamline processes, access to funding, and market opportunities for startups. Ultimately, government policy plays a crucial role in advancing India's position as a global hub for innovation and new business ventures.
These 20 vital government policies are the backbone of the country’s thriving startup ecosystem, providing startups with the resources, support, and opportunities they need to succeed. As India continues to evolve as a global startup powerhouse, these initiatives play a crucial role in shaping the future of entrepreneurship in the nation.
