Lucknow, UP, India, 226028

STARTUP FINANCING AND RELATED GOVERNMENT SCHEMES

startup

INTRODUCTION

India now growing gradually towards the Start-up ecosystem and financing with other related schemes. So, so on boost entrepreneurship, the govt. of India has created a chance to assist with the new businesses and financing schemes. Also, the Government has taken several measures and initiatives by introducing many schemes to plug the entrepreneurship.
To promote and supply financial assistance to entrepreneurs in India, the govt. has built several sets of Schemes related to different sectors to spice up the start-up schemes to assist boost the start-up mission in India.

The Central Government and State Governments have introduced schemes to finance and support start-ups which formulate provisions to alleviate the conditions of start-ups in its financial budget. Government schemes are available to need up by the start-ups if they are under the definition of a start-up provided by the Central Government. The tactic to be recognized as a “start-up” is availed through making a web application to the concerned departments of the Central and State Governments.

Keeping the above points in mind, the Government of India has tried to curate an exhaustive list with the print of those 50+ start-up schemes floated by the Indian government up to now to support the Indian start-ups like SMEs, MSMEs, and different sectors. Indian sectors that these government schemes for start-ups operate under the many ranges as defined by the govt.

HOW FUNDING OF FUND WILL WORK

It is essential to identify the assorted participants in several sectors of Start-ups. Many individuals are hoping to induce funding for his or her company from the government side as part of the finance and sectoral wise which the list is to be category they are falling. Because the business becomes increasingly mature, it tends to advance through the funding rounds which is stated by the govt. for easier purposes of funding the finance.

On the selection, the side is potential investors within the actual sectoral wise. While if the investors wish to succeed in their business if they are supporting entrepreneurship and believe in the aims and causes of their businesses and they also hope for the profit back from their investment. For this reason, almost all the investments are made during different stages of developmental funding is arranged by such an independent investor or investing company who retains the partial or whole ownership of the company.

However, Govt. of India believes that the various sector start-ups than the support from the investor’s side could even be a person or the companies because the case may be, giving the Start-ups Tax exemption for the first few years to support them to develop and for growth of the business within the State level or National or International Levels.

Government is additionally not only funding but also giving the several exemptions as related to start-ups with the minority categories who are willing to begin out their business and to develop gradually. Naturally, this might help for several individuals and for several companies who are seeking start-ups and seeking help or funding from the Central Government under different schemes.

FEW START-UPS LIST AND GOVERNMENT FUNDING

  • Software Technology Park (STP) Scheme:

It is headed by the Software Technology Parks of India (STPI) Department and also the Industries which are applicable under who can avail the services are IT services, Fintech, enterprise software, analytics, AI are eligible for the identical.

The STPI has been founded with the target of encouraging, promoting, and boosting software exports from India. The STP Scheme, by the Indian government, provides statutory services, data communications servers, incubation facilities, training, and value-added services.

  • Electronic Development Fund (EDF) Policy:

It is headed by the Department of Electronics and data Technology (DeitY) then the industries applicable IT Services, analytics, enterprise software, technology hardware, Internet of Things, AI, nanotechnology.

Incentives are given for the Electronics Development Fund (EDF) is set up as a “Fund of Funds” to where it is participating in the professionally-managed “Daughter Funds”

  • Modified Special Incentive Package Scheme (M-SIPS):

Launched in July 2012 and it is headed by the Department of Electronics and knowledge Technology (DeitY). The industries which are applicable under the Category are Technology hardware, Internet of Things, aeronautics/aerospace & defense.

  • Credit Guarantee:

Headed by the Department of Credit Guarantee Fund Trust for Micro and tiny Enterprises (CGTMSE) and related industry is Sector-Agnostic.

Incentives by the Department: Both term loans and/or assets facility up to INR 100 Lakhs per borrowing unit are being provided.

  • Material Assistance:

Headed by the Department of National Small Industries Corporation (NSIC) and also the Industry Applicable is Sector-agnostic.

Eligibility: MSMEs registered in India are eligible to use under this scheme.
Incentives: Under this scheme by the Indian government, MSMEs are helped to avail economics of purchases like bulk purchase, cash discount, etc. Also, all the procedures, documentation, and issue of letter of credit just in case of imports are visiting be taken care of.

However, the Central Government has been making the new norms for the several developments in India, to become a developed country soon and helping the start-ups through several departments for making facilities easier for them.

It has been noticed that India is now an emerging country in the start-ups in the world and giving good entrepreneurs throughout the nation and new emerging capital is coming in India.

CONCLUSION

The increasing of the Individuals and companies who are registering as Start-ups in India is getting more and more benefits from the Government of India for those Schemes regulated under the different bodies of the Central Government also highlighting the work which the Start-ups are doing their work from past 5 years.

Further, India seems to be going towards the entrepreneurship in next decade which means in the next 10 years of spam, and India can have equally successful as the USA, by getting the support of the Central and State Governments and also the support of Private individuals and other companies.

India has been Independence for over 70 years and every Government since Independence has made an effort to promote the Skill-based and unskilled works by the people for entrepreneurship in India. It was changing after 2000 when the launch of companies like Flipkart and One97 Companies (Paytm’s Parent Company) that start-up as a term and it was a real career way ahead which is gained legitimacy.

To this end, the Government of India has done its utmost to enabling and empowering Indian start-ups. Whether it comes to funding support, tax rebates, mentorship, or guiding platforms like Start-up India Hub, start-ups are being provided tiered support.

Also, the Government of India’s recent attempts to build exchange programs with foreign start-ups in countries like Germany and SAARC nations will further open new doors of opportunities for the stakeholders in the start-up financing. The utmost important reasons for starting a business – job creation – has now become part of the start-up lexicon due to the efforts of the Indian government.

Finally, India is slowly developing in the start-up category and the investment opportunity is raised from the worldwide investment through FDI but including some restrictions will allow the start-ups. As the opportunity growing up in India, the world is now looking at India for the new emerging start-ups to give the fight with the other countries start-ups, which Indian companies are capable enough and getting the finance and other related supports from the Government.

Author(s) Name: Yashwanth AS (Dr. RML College of Law, Bangalore)

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