Government Schemes For Your Startup

List of Top Government Schemes for Startups in India

Ranked at India 142nd out of 190 countries in the World Bank’s Ease of Doing Business Ranking in 2014, India was not a business-friendly country for decades, without any real Government Schemes for Startups. But that is not the case today.

The change began in 2016 when the Indian government launched the Startup India Initiative to promote business and entrepreneurship in India. As a result, the number of recognized startups in India has risen from 726 in FY 2016-17 to 65,861 in FY 2021-22, according to Commerce and Industry Minister Piyush Goyal. And by 2019, we came 63rd in the Ease of Doing Business Ranking. 

These numbers suggest the lucrative ecosystem that now exists in more than 200 districts across 56 sectors in the country that helps anyone with a business idea to launch their product in the market. It has also been the efficiency and delivery of different schemes and programs launched by the government for supporting this startup culture and entrepreneurial ecosystem.

The schemes and programs run by the government aid businesses to meet their financial needs and acquire technical support, innovation, and training. If you are an entrepreneur building your startup in India, you need to know about these schemes and programs as they may be what you need to grow your business. 

Startup India Initiative

Startup India is an ambitious initiative launched by the Prime Minister of India on 16th January 2016. This initiative aims to support entrepreneurs by building a robust startup ecosystem. It is run by the Department of Industrial Policy and Promotion as a long-term project.

The Action Plan of Startup India comprises 19 items covering areas such as Simplification and handholding, Funding support and incentives, and Industry-academia partnership and incubation. 

Simplification and Handholding – This allows easier compliance and an easier exit process for failed startups. It provides legal support, fast-tracking of patent applications, and a website to reduce information asymmetry.

Funding & Incentives – A fund of funds to infuse more capital into the startup ecosystem and a credit guarantee scheme. Exemptions on Capital Gains Tax and Income Tax are there for eligible startups.

Incubation & Industry-Academia Partnerships – Creation of incubators and innovation labs, competitions, and grants.

You can learn more about the Startup India initiative here

Startup India Seed Fund

Following Startup India Initiative, the government announced the launch of the Startup India Seed Fund on 16 January 2016. The government dedicated INR 1,000 crores to helping startups and aspiring entrepreneurs through this Fund. The motive behind it was that startup business owners in India do not face any capital shortage in setting up their businesses.

The scheme provides startups with financial assistance in the early stages such as proof of concept, prototyping, product trials, and market entry. The availability of funds at the early stage will improve the potential of the enterprise to grow to the next stage where funding can be sought from banks, angel investors, venture capitalists, and other financial institutions.

As per the Union Budget of 2022, the reserved fund for the Startup India Seed Fund initiative is Rs 283.5 crore. 

Startup India Initiative was the first step taken by the government to promote startups in India. Many other schemes and programs aimed at setting up and supporting startups and small enterprises were introduced soon after.

Here are the top schemes and programs the Indian government offers to develop Micro, Small, and Medium Enterprises and startups. 

Pradhan Mantri Mudra Yojana

Prime Minister Narendra Modi launched the Pradhan Mantri Mudra Yojana to support small businesses in India. Under this Yojana, Micro Units Development Refinance Agency (MUDRA) banks have been created to increase credit facilities for the growth of small businesses in rural areas. MUDRA Banks provide loans to microfinance institutions and non-banking financial institutions at low rates, who in turn give low-interest loans to startups and Micro Small and Medium Enterprises. Loans up to Rs. 10 lakh can be availed by small Manufacturing Units, Retailers, Wholesalers, Artisans, etc. under this scheme.

Businesses are categorized into three according to their stages for availing of loans under the MUDRA scheme: Shishu, Kishor, and Tarun. 

  • Shishu stands for new businesses that can avail of loans up to Rs 50,000.
  • Kishor, which is a mid-aged business that can avail of loans up to Rs 5 lakh.
  • Tarun stands for an existing, experienced business that can avail of loans up to Rs 10 lakh.


SAMRIDH scheme stands for Startup Accelerators of MeitY for pRoduct Innovation, Development, and growtH. It was launched by the Minister of Electronics Information and Technology (MeitY) on August 25, 2021. The SAMRIDH Scheme is designed to provide funding for startups and entrepreneurs while also supporting them in their initial phases. 

SAMRIDH will create a conducive platform for startups developing software products to improve their products and secure investments for growing their businesses. The program will focus on accelerating 300 startups by providing customer connect programs, investor connect programs, and international expansion opportunities. The MeitY Startup Hub (MSH) will become the agency for the implementation of this Scheme.


There are many schemes set up by the government to improve the social and economic aspects of life in rural areas of India. ASPIRE is one of the most popular schemes for promoting the entrepreneurial spirit in rural India.

A Scheme for the Promotion of Innovation, Rural Industries, and Entrepreneurship (ASPIRE) was launched in 2015 by the Ministry of Micro, Small, and Medium Enterprises (MSMEs). Its goal was to set up incubation centres and a network of technology centres for enhancing entrepreneurship across India. It seeks to promote startups in the agro-business industry.

The main objectives of ASPIRE are to impart the necessary skill sets for starting a business enterprise and assist them during their crucial period to ensure self-sustainability. By promoting the startup culture in rural areas, the government aims to create jobs in the rural agricultural sectors which account for 56% of the Indian population. 

Zero Defect Zero Effect (ZED) Certification Scheme

The Zero Defect Zero Effect (ZED) scheme was launched in 2016 by the government to create awareness about ZED manufacturing among MSMEs and motivate them to create better products, with high quality and zero defects. The focus is to enable business owners to adopt world-class manufacturing processes, and use technology to create products that are the best in the class.

The government scheme will provide financial support, technology, and tools to ensure zero defects in their products. The initiative also takes care of manufacturing efficiency, improved human resources, financial efficiency, energy-saving, and pollution control. 

ZED Certification can be obtained in three Levels after registering and taking the ZED Pledge after fulfilling the requirements mentioned in each level. 

Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)

Technology drives the success of a business. Credit Linked Capital Subsidy for Technology Upgradation, or CLCSS, is a government of India scheme that helps startups and small enterprises to upgrade technology. Under CLCSS Scheme, the government provides cash for the companies upfront to upgrade/modernize their equipment or implement state-of-the-art technological platforms.

Under this Scheme, the Government provides a 15% subsidy for investment up to Rs. 1 crore for upgrading technology for startups and MSMEs.There are more than 7500 products or services covered under this scheme. 


Due to these insightful and efficient schemes launched by the government, the country has the third-largest startup ecosystem in the world, according to the Economic Survey 2021-22 report. With over 100 unicorns and 60,000 startups, India has become a country where smart and innovative ideas can turn into successful businesses. 

If your idea is viable, the government will actively support your startup by providing financial assistance, technical support, subsidies, and other services to put you on a path of growth. These initiatives in this blog, and many more like them, have played an important role in the journey of thousands of entrepreneurs in building their businesses and helping people. 

With government support, startups can gain worldwide recognition and can attract investors from around the world.

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