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Government Schemes for Startups in India

The Government of India and the Ministry of Micro, Small, and Medium Enterprises (MSME) have launched several specific government schemes for startups in India. The aim of these schemes is to strengthening startups and MSME in India. 

Setups and MSME are the foundation for the success of the Government’s AatmaNirbhar Bharat and Make In India vision and create more jobs. They will also increase exports, raise the living standards of millions of Indians and strengthen India around the world.

The Indian government wants MSME to contribute to India’s GDP to reach 50% by 2024, from 29% currently, and provides 15 crores jobs to Indians, up from 11 crores.

This is the reason that the Ministry of Micro, Small, and Medium-sized Enterprises (MSMEs) has started many government programs for startups and small businesses to provide them with more capital and a platform to support growth.

Government Schemes for Startups in India

Government Schemes for Startups in India

Here in this article, we will look at some Government schemes for startups in India that can help them drive growth and increase business.

Pradhan Mantri Mudra Yojana

Pradhan Mantri Mudra Yojana is a scheme where MUDRA Banks and Micro-Development units or Refinance Agency Bank offer low-interest rate loans to microfinance and non-banking financial institutions which in turn offer low-interest loans to start-ups, small and medium-sized enterprises.

Therefore, the Pradhan Mantra Mudra Yojana is one of the schemes designed and conceived to empower Indian entrepreneurs. Under this scheme loans up to Rs, 10 lakh can be availed.

It started operating in 2015 and in two years more than 1.8 million jobs have been created, this is because of the loans and business generated through MUDRA. During the financial year, 2020-2021under MUDRA plan number of sanctioned loans is 43370003 having a sanctioned amount of Rs. 337495.53 crore and disbursed an amount of Rs. 329715.03 crore [1]

Three types of business categories are there that can avail loan under the MUDRA scheme:

  • Shishu: It is for new businesses and a loan of Rs. 50, 000 can be availed under this category.
  • Kishor: this is for a middle-aged company and a loan of Rs 5 lakh can be taken under this category
  • Tarun is for an existing experienced company and a loan of Rs 10 lakh can be availed under this category.

The Mudra Plan covers MSMEs, such as small production units, retailers, wholesalers, artisans, and others. 

Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTSME)

The Government of India has launched the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) under the minister of MSMEs to provide guarantee-free loans for the micro and small business sector.

Existing and new business units are eligible for coverage under the program. 

The Ministry of Micro, Small and Medium Enterprises, the Government of India, and the Indian Small Industrial Development Bank (SIDBI) have established a trust called the Credit Guarantee Fund to implement the loan guarantee for Micro Enterprises and Small Enterprises (CGTMSE). 

This scheme is one of the largest startup loan programs started by the Ministry of MSME in India. Under this Government CGTMSE program, eligible startups and MEMEs can avail of a guarantee-free loan of up to 1 crore. 

During 2020-2021 6.19 lakh loan cases worth Rs. 565.14 crore has been approved under the CGTMSE scheme. [2]

New and existing micro and small enterprises involved in production or service activities are eligible to get loan under this scheme, do not include educational institutions, agriculture, self-help groups, training institutions, etc.

Also Read: SBI Home Loan scheme – State Bank Loan Schemes

Financial Support to MSMEs in ZED Certification Scheme

This is one of the government schemes for startups in India. This Zero Defect and Zero Effect scheme cover existing and new production units it aims to inspire manufacturers to create better products of high quality and without flaws.

The focus is on manufacturers adopting superior manufacturing processes and using technology to make sure that their products are best in class.

ZED government scheme provides technology, financial support, and tools to make sure that there are zero defects in the products.

This system provides support for Zero Defect and Zero Effect production among MSME and ZED evaluation for their certification for:

  • Developing an ecosystem for harmless production in MSMEs, encouraging the adaptation of quality tools/systems and energy-efficient production, and ensuring that MSMEs produce high-quality products.
  • Encourage MSMEs to continuously improve quality standards in products and processes. Direct production to adopt production processes without any defects and do not affect the environment. support the ‘Make in India’ campaign and develop professionals in the field of production and ZED certification.

Subsidy for Micro, Small, and Medium Enterprises provided by the Government of India under this plan will be 50%, 60%, and 80%. [3]

Credit Linked Capital Subsidy for Technology Up-gradation (CLCSS)

The government knows that technology is a tool that can lead Indian businesses and SMEs to compete with global competitors so they introduce the CLCSS scheme. 

The Ministry of Small Scale Industry (SSI) is running a small industry technological upgrade (SSI) plan known as the Credit Linked Capital Subsidy Program (CLCSS).

The program aims to facilitate technological upgrades in SMEs by providing 15% of start-up capital (for institutional funding up to Rs 1 crore, which they availed) to introduce established and improved technologies in 51 approved sub-sectors/products. [4]

In other words, the main goal of this scheme is to upgrade their plant and machines with the latest technology, with or without extensions. It is also for new MSEs that have installed their plants with properly approved and tested technology per scheme guidelines. 

According to CLCSS, Government provides a subsidy of 15% for investments of up to 1 crore to upgrade technology for startups and MSMEs in India. This government plan covers more than 7,500 products/services.

For more details about the CLCSS scheme click here.

Design Clinic for Design Expertise to MSMEs

For any industry design and innovation is the key, and every MSME and startup should have a design-oriented approach to solving problems in their field.

To encourage and motivate small businesses to try and test new designs for their products, the Ministry of Micro, Small, and Medium Enterprises (MSME) has created a Design Clinic to promote design skills for startups and MSMEs. [5]

As part of this government program, the government provides assistance of up to Rs 60,000 for attending design seminars. And up to 75% of the seminar price or 3.75 lakh where the entrepreneur and/or his team can learn more about design theories and can apply them.

Through this program, entrepreneurs can learn about the latest trends and practices in design, communicate and network with other designers, entrepreneurs and gain a thorough understanding of design attitudes and theories.

MSME, startups, and agencies can apply online to this design clinic and access the innovation portal. For more details about Design Clinic for Design Expertise click here.


To promote and support business and to create jobs for Indians central Government in India has launched several government schemes for startups in India. 

Enterprises established in various sectors contribute to the economic growth and development of the country and also gain international recognition.

However, it is not easy to start a business. The government understands the difficulties that business owners and start-ups face in establishing and maintaining them. 

So the government has launched various plans for companies to reduce the burden and encourage the creation of new companies and start-ups.

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