April 14, 2024
12 Government Schemes Funding Startups in India

The Government of India is committed to building a robust startup ecosystem. To promote and support entrepreneurs, the government has created a special department dedicated to helping startups in India.

The Central Government of India has developed many schemes to support entrepreneurs and assist startups financially. The Indian Government is doing a lot to support newly developed ventures in the country.

So many young Indians have great ideas but lack the capital to turn those ideas into a business. The government funds have empowered different ventures and have enhanced the desire for growth and innovation among the startups. This has also created a conducive environment for the implementation of projects.

Although these Funds are there, not every startup gets the chance to receive the seed finding. You will need to understand all the requirements for you to stand a chance.

How to get government funding for your startup in India.

To stand a chance with government funding, you need to adhere to certain guidelines and meet the requirements mentioned under the eligibility criteria. There is a list of guidelines you need to follow to meet the eligibility for applying for government funding for your startup.

Some startups are eligible to get funds up to Rs. 5 crores provided in several installments. To help you determine if you are eligible check out the list of requirements below: 

  • You should have operated in India for 10 years or more, starting from your incorporation date.
  • In one financial year, annual turnover must not exceed Rs. 100 crores.
  • Be registered as a firm, LLP, or a private limited company
  • You should be working to improve certain processes or products, and you should have a business plan for innovation. Your company must also have a high potential for generating employment opportunities for Indian people.

#1. SAMRIDH Scheme

This is one of India’s Central government initiatives to boost entrepreneurship. The SAMRIDH Scheme is designed to provide funding support to startups and help them bring skill sets together which will help them grow successfully. SAMRIDH was launched on August 25, 2021, by Ashwini Vaishnav who was then a newly appointed Minister of Electronics Information and Technology (MeitY).

The main objective of this scheme is to promote the growth of software product companies in the country. The scheme focuses on the acceleration of around 300 start-ups by providing them with customer connect, investor, connect, and other opportunities for international expansion in the next three years.

The startups can get up to Rupees Forty lakhs of government funding. However, the amount given will depend on the growth level and value of the business. These funds give the businesses a push for better and different connections such as customers, investors, and global projects.

#2. Startup India Seed Fund

This initiative was launched on January 16, 2021, by Indian Prime Minister Narendra Modi. The Startup India Seed Fund worth INR 1,000 crores was started to help startups and support ideas from Indian aspiring entrepreneurs.

The India Government, through this scheme, is helping many startups with finances, especially at the seed stage. This scheme is popularly known as SISFS. This seed fund will support the startups and help them reach higher levels.

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It helps them qualify for raising funds from multiple angel investors or get loans from other financial institutions or banks. To qualify for the funding, your startup must have an innovative idea and utilize the latest technologies for in-house research and development only.

For this Scheme, businesses can opt for funds up to a maximum amount of Rs. 10 lakhs. The Government only provides seed support only through debt or convertible debentures or Government-approved grants.

#3. Startup India Initiative

This initiative by the India Government aims at building a strong infrastructure to promote different startups in India. It was launched on 16th January 2016 and its main objectives are promoting startups in India, generating more employment opportunities, and helping in the creation of substantial wealth.

The India Government gives tax benefits to startups under this scheme and over 50,000 startups have been recognized via this scheme. The Industrial Policy and Promotion department of the Indian government is maintaining this initiative and treating it as a long-term project.

Initially, the age limit for startups was two years, but it has been increased to seven years. However, for any biotechnology firm, the age limit is ten years from the date of its incorporation.

This is one of the best Indian government-sponsored startup schemes for entrepreneurs as it provides several concessions. For you to qualify for the funding, your startup must focus on the innovation or development of a single product.

#4. MUDRA Bank

MUDRA stands for Micro Units Development Refinance Agency and the full name of the scheme is Pradhan Mantri Mudra Yojana. It was created to enhance credit facilities and boost the growth of small businesses in rural areas.

On April 8th, 2015, the India Government allocated INR 10,000 crores to promote startup culture in India. Through MUDRA banks, small enterprises, non-corporate businesses, and nono-farm small/micro-enterprises can get startup loans of up to INR 10 lakhs.

These loans have been categorized as Tarun, Kishore, and Shishu. 

  • The Tarun category gives loans to matured businesses ( up to INR 10 lakh)
  • The Kishore category is for mid-aged businesses (up to INR 5 lakhs)
  • Shishu is for new businesses. (up to INR 50,000)

Any person can borrow loans from different mutual funds, banks, and financial institutions without collateral security. 

#5. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)

This program funds both existing and new businesses with collateral-free loans. The CGTMSE was launched by the Government of India on January 1st, 2000, and has been operating since then. It focuses on providing business loans to micro-level businesses, small-scale industries, and startups.

This initiative allows businesses to benefit from loans at highly subsidized interest rates without requiring security. In conjunction with SIDBI (Small Industries Development Bank of India), the government provides up to INR 100 lakhs under this scheme to boost new businesses and rehabilitate the existing ones.

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Initially, the loans were meant for manufacturing units, but they can know to be given in the form of working capital or a team loan.

Related: 8 Startup Ideas in India: The Low Investment Options.

#6. Chunauti

Chunauti is a scheme that was influenced by the pandemic. CHUNAUTI stands for Challenge Hunt Under NGIS for Advanced Uninhibited Technology Intervention. This scheme was made to invite startups to develop solutions for problems in the middle of the pandemic. 

It was launched in August 2020 under the Next Generation Incubation Scheme (NGIS). 

You can apply for this funding if you meet the following:

  • if you have an Indian startup working in domains-related software product development.
  • Your Startup is registered with DPIIT under the start-up India program.
  • Individual academicians, researchers, educators, entrepreneurs, partnership firms, and LLPs. (if selected, then you have to register as a private limited company in the stipulated time preferably within 3 months)

As of now, 2022 CHUNAUTI 3.0 is focused on identifying and supporting promising startups working towards digital transformation and accessible products/solutions enabling equitable and inclusive growth. The interested parties made applications by the 10th of March 2022.

#7. Aspire

The Indian government has continuously tried to improve rural life’s social and economic aspects. Aspire stands for A Scheme for the Promotion of Innovation, Rural Industries, and Entrepreneurship.

This initiative is promoted by the Ministry of Micro, Small, and Medium Enterprises (MSME). It was launched in 2015 to offer proper knowledge to entrepreneurs to start up their businesses and become employers.

The government of India has helped so many people by promoting entrepreneurship and innovation in the rural sector with this scheme since 56% of the Indian population lives in rural areas.

The objectives of ASPIRE are to increase employment, reduce poverty and encourage innovation in rural areas of India. This is by promoting the agro-business industry. The MSME has tried to boost economic development at the basic level.

#8. Support for International Patent Protection in Electronics and Information Technology. (SIP-EIT)

This scheme was launched by the Department of Electronics and Information Technology (DeiTY). The SIP-EIT scheme provides financial support to MSMEs and Technology Startups for international patent filing.

Why choose the SIP-EIT scheme:

  • It provides financial support for international filing in the information Communication Technologies and Electronics sector.
  • The reimbursement limit is set at a maximum of INR 15 lakhs per invention or 50% of the total charges incurred in filing and processing a patent application.
  • This scheme can be applied at any stage of international patent filing,

#9. Multiplier Grants Schemes (MGS)

Multiplier Grants Scheme (MGS) was launched by the department of Electronics and Information Technology (DeitY). This scheme encourages collaborative Research & Development (R&D) between industry and institutions to develop products and packages.

If the industry supports the R&D of products under the MGS scheme that can be commercialized at the institutional level, the Indian government will provide financial support, which is up to twice what the industry provided.

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This scheme promotes and speeds up the development of aboriginal products and packages. The government grants are limited to a maximum amount of INR 2 crores per project and the duration for each project is less than 2 years.

#10. High Risk and High Reward Research.

The Indian government launched this initiative. Its main purpose is to support and invite new proposals/new ideas with the potential to bring fundamental change to the Science and Technology domains.

The funding focuses on new proposals which might be conceptually new and risky at the same time but with fundamental change on the S&T, in terms of formulating new hypotheses or any scientific breakthroughs which can help with new technologies.

#11. India Water Pitch-Pilot-Scale Startup Challenge

This challenge was launched on March 12, 2022, by the government of India. The selected Indian Startups get a grant of Rs 20 lakhs together with support and mentorship from the Ministry of Housing and Urban Affairs. This scheme aims to empower as many as 100 startups in the water sector.

#12. Dairy Processing and Infrastructure Development Fund (DIDF)

The Dairy Processing and Infrastructure Development Fund (DIDF) was created under NABARD, which stands for National Bank for Agriculture and Rural Development, is an apex development bank in India. 

This was done in the Union Budget of 2017- 2018 for the sustained benefit of farmers. The total budget was INR 8000 crores for 3 years (2017-2018 to 2019-2020). Any of the following groups meeting the eligibility criteria under the project can borrow loans from NABARD.

 Who can apply

  • Milk Unions
  • Multi-state milk cooperatives
  • States dairy federations
  • Milk-producing companies
  • NDDB subsidiaries

The loan provides 80% as the maximum rate, which means you have to contribute 20% as the borrower. The interest rate for the loan is 6.5% per annum. You get to repay the loan for 10 years or less.

Departments under the ministry of agriculture were allocated a total of Rs 1.31 lakh crore in the 2021 Budget which has been increased in the Union Budget of 2022 to Rs 1.32 lakh crore. 


These government Schemes are started to promote and help the present groups of startups benefit and motivate budding entrepreneurs, startups, and students from all domains.

These schemes were introduced for the development of the Indian startup ecosystem. India now seems to be moving towards the golden era of entrepreneurship. If things go well, India may host as many successful startups as countries like USA and China, or any other leading nation by 2030.

These schemes are a great way to get money for your project. However, it is important to do your research before applying. These applications can be intimidating, and most of the time, they have a lot of hoops to jump through; however, preparing ahead of time ensures that you have all the required documents and you avoid last-minute pressure.

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