Did you know that India’s MSME (Micro, Small, and Medium Enterprises) sector is a significant contributor to its rapid socio-economic development? There are approximately 6.3 crore MSMEs today, generating turnovers of over Rs. 300 crores. The start-up industry isn’t lagging either. Some 3,000 start-ups are emerging per year and are predicted to create over 2.5 lakh jobs in the coming years.

India’s entrepreneurial spirit is undying. However, there’s one roadblock that poses quite the problem: capital shortage. To tackle this head-on, our government has launched numerous projects for funding small-to-medium businesses.

So, if you are a business owner looking for funding options, here are the top government schemes for MSME and start-ups you can consider.

1. Pradhan Mantri Mudra Yojana

The Pradhan Mantri Mudra Yojana or MUDRA scheme is a unique credit scheme that offers low-interest business loans to MSMEs and start-ups in the non-corporate and non-farming sectors.

Under this government schemes for start-ups and MSMEs, you can avail of three types of loan products:

  • Shishu category – A loan of up to Rs. 50,000 is available for start-ups and small businesses in their initial stages under this category.
  • Kishor category – Mid-aged businesses looking to expand operations can avail up to Rs. 5,00,000 under this category.
  • Tarun category – Under this category, experienced businesses can avail up to Rs. 10,00,000.

Additional Read: What is the PMMY Scheme?

2. Raw Material Assistance

Headed by the NSIC (National Small Industries Corporation), the Raw Material Assistance programme is a fruitful government scheme for start-ups and MSMEs. It offers financial help through lender guarantees, credit facilitation, and bill discounts. The government takes care of all the paperwork. In turn, businesses get the necessary funds for bulk purchases of raw material and focus solely on manufacturing.

3. CGT SME

The Credit Guarantee Trust Fund for Micro and Small Enterprises (CGT SME) is one of India’s largest start-up funding schemes provided by the Ministry of MSME. Under this scheme, eligible MSMEs and start-ups can obtain a collateral-free loan of up to Rs. 1 crore through the Ministry of MSME and Small Industries Development Bank of India (SIDBI). To know more about this CGT SME business loan eligibility, terms and conditions, etc.

4. CLCSS Scheme

The Credit Linked Capital Subsidy Scheme (CLCSS) for Technology Upgradation is a government loan scheme for tech start-ups. Here, the Indian Government offers capital to help MSMEs and start-ups upgrade their tech equipment and provides a 15% subsidy for investments of up to Rs. 1 crore. For this, MSMEs/start-ups must get a term loan from a lender through the CLCSS scheme.

5. Udyam Registration and Certificate

MSMEs are the backbone of any economy, adding not only to the country’s GDP but generating employment in towns, suburbs, and villages. However, registering as an MSME was not always easy for many new business owners. They had to visit local bodies and pay the registration fee before they could be considered a legit MSME. 

So, many business owners missed out on the benefits of government schemes meant for MSMEs due to the tiresome and confusing registration process. Udyam Registration Certificate is one of the best government schemes for MSMEs in that regard.

Udyam fast-tracks registration of MSMEs through the online process. New owners just have to visit the Udyam registration portal, provide their Aadhar card, and they get a permanent MSME registration without paying any fee. The Udyam Certificate also makes it easier for owners to avail of government schemes for MSMEs, like subsidised loans. 

6. Start-up India Scheme

The Start-up India scheme is a trademark scheme of the Indian Government. Its purpose is to provide a healthy ecosystem for business and promote entrepreneurship among the citizens of the country. 

This government scheme for start-ups provides the following benefits to eligible businesses:

  • Online self-certification compliance for the country’s labour and environmental laws.
  • Under the Start-up India scheme, the Government will not conduct any inspection for 5 years to check compliance with labour laws. However, an assessment may occur if a credible complaint for any violation is approved by at least one level senior to the inspecting officer. In the case of environmental laws, the Government performs random checks.
  • Fast-track application for start-up patents
  • Tax exemption under Section 80 IAC and Section 56 of the Income Tax Act.
  • Easy process for winding up the company in case of bankruptcy.

Additional Read: What Is Credit Linked Subsidy Scheme? How Does It Work?

7. MeitY SAMRIDH Scheme

The MeitY SAMRIDH scheme is one of the most important government schemes for start-ups in the country. Many start-ups fail to survive in this competitive business environment due to a lack of funding, low-quality product, and insufficient skill set. So, this scheme helps start-ups with product innovation, business development, and growth. 

Currently, the MeitY SAMRIDH scheme aims to help at least 300 start-ups bring together the necessary skill set and provide them with investor and customer connections. The scheme also aims to facilitate the expansion of these start-ups overseas. 

Apply with Tata Capital!

If you are actively looking for business capital, Tata Capital offers attractive loans for start-ups and MSMEs. With us, you get structured EMI plans, minimal paperwork, simple eligibility terms, and an array of exclusive benefits.Our business loan interest rates start at just 19%, offering you maximum affordability for hassle-free financing. Explore our diverse loan products here.

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