India $5 Trillion Economy


How Central Government Is Supporting The Startups

The central government is the primary stakeholder in sparkling Innovation and Start-Ups across the country. Government investments are financial aid to the new line breed of entrepreneurs to venture their different expertise domains. The commendable role of the Central government is helping the start-ups into two folds-


  • Doing things innovatively. 

  • Building and supporting the innovation ecosystem. 

 The government embarked on various initiatives, strategies, and plans to kick start the slow down phase of start-ups. There are many commendable strategies and schemes brought up by the Indian government to boost the Indian economy and help entrepreneurs. 

Startup India and Invest India are two keys to guide to leapfrog the start-up innovation and entrepreneurship in the country.

The Global competitive environment needs continuous technological advancements to sustain and lead the way and maintain the economic prosperity of the country. The various government schemes and incentives act as a catalyst for the start-ups to reach a potential position in the industry. The government is making many efforts to bring foreign direct investments in India. The government has conducted several international programs to give Start-up international exposure.

There are many schemes launched by the government to boost entrepreneurship and encourage start-ups in the country. 

Some of the Schemes are mentioned below-

 Venture Capital Assistance (VAC)-

 Venture Capital Assistance is headed by the small farmer’s agribusiness Consortium (SFAC).

 It is the financial aid provided by the government to meet the shortcomings of required capital in the project. The scheme establishes for the term 2012- 17 under the XII plan. It is the interest-free form of loan provided by the government. This scheme had tied up with 41 banks for financial aid.

It applies to the agricultural industry to help farmers to flourish.

 The main objective of the scheme is to assist the agripreneurs invest in agricultural projects. It also provides support in the preparation of a bankable Detailed project report through the Project Development Facility(PDF). 


Following are eligible persons-

  • Farmers

  • Producer groups

  • Partnerships/ proprietary firms.

  • Companies

  • Self-help groups

  • Agripreneurs

  • Agriculture graduates

  • Units in Agri export zones.

 Fiscal incentives-

The incentive of Venture Capital Assistance depends on the projects and will be the lowest of the following-

  • 26% of the promoters’ equity

  • INR 50 lakhs

 All over the country wherever, a project is promoted by the Register Farmer Producers Organisation, the incentive will be the lowest of the following-

  • 40% of the promoters’ equity

  • INR 50 lakhs

 Credit Guarantee Fund Trust For Micro and Small Enterprises (CGTMSE)-

 It is headed by the SIDBI, Ministry of Micro, small and medium enterprises.

The Credit Guarantee Fund Trust For Micro and Small Enterprises scheme is for micro, small and medium enterprises. It is launched by the government of India to provide collateral-free credit to micro and small enterprise companies.


New and Existing Enterprises excluding Educational Institutions, Agriculture, Self-help groups, Training centers are eligible under the scheme.

 Fiscal Incentives-

 The scheme covers funds and non-fund based credit facilities up to rupees 200 lacs per eligible borrower. Further, the incentives are extended based on project feasibility without any security or third party guarantee.

The guarantee cover in the scheme can extend to 50%, 75%, 80%, and 85% of the amount sanctioned.

 A Scheme for Promotion of Innovation, Rural Industries, and Entrepreneurship (ASPIRE)

 It is headed by the Government of India and the Ministry of MSME.

 Aspire was launched to extend and develop the network of technology centers to incubate entrepreneurship and promote start-up in the agriculture industry.

 The main objective of the scheme is to create ways for new jobs and reduce unemployment in the country, promote entrepreneurship in the country, facilitate the technical and innovative business solution to meet the social requirements, take steps to strengthen the competitiveness of the MSME sector.


  •  Incubators
  • Technology business incubator and incubation schemes of MSME/NSIC/KVIC as well as private incubators.

 Fiscal Incentives-

  • 50% of a one-time grant of the plant and machinery cost excluding the land cost or amount of INR 30 lakhs, whichever is less for existing incubation centers.
  • 50% of the one-time grant of plant and machinery excluding the land cost or amount of INR 100 lakhs, whichever is less to the new incubators centers.

  • INR 200 lakhs to the accelerators for workshops for incubations.

  • At the inception age, the financial support of INR 3 lakhs is given to each idea to nurture them.

 Multiple Grants Scheme-

Multiple Grants Scheme is headed by departments of electronics and information technology.

It aims to boost the collaborative research and development between the industry and the academic institutions for the development of the product packaging. Under this scheme, if the industrialists assist the R & D at the institutional levels, then the government will ensure the assistance up to twice the amount given by the industry for the R&D activity.

 The main objective of the scheme is to build and nurture the bridge between the industry and the institutes. It also boosts the industry-oriented research and development programs at the institutions for the advancements in technology in every field.


  • The applied industry must-have requirements for the –  

              -Workforce for the absorption of the technology

              -Infrastructure for production inhouse

  • The proposal idea should be in the core area of the business.

Fiscal Incentives-

  •  For individual industries, the government provides the incentive of a maximum of INR 2 crores per project. The duration of each project must be less than 2 years.
  • The government is liable to cover the following items of expense in the project – equipment, consumables, labor, travel and training, contingencies, and overheads.

  • The overheads can cover a maximum of 15% of the total project cost.

Many schemes are launched under the Start-up India and Invest India to protect the interest of the various industries and provide financial aid to entrepreneurs across the country. The government has launched many programs for foreign direct investments in India. 

Atma Nirbhar Bharat is the motto of recent India. Start-ups in 2020 are easier than in any era.


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