Top 5 Government Schemes for Indian Startups and MSMEs


India is currently experiencing a burgeoning startup era, characterized by the establishment of a robust ecosystem for businesses and entrepreneurs. Renowned as the ‘Startup Hub,’ India boasts over 99,000 startups, including 107 unicorn companies valued at $30 billion. Prime Minister Narendra Modi has spearheaded numerous initiatives to support aspiring entrepreneurs.

These government-led initiatives are designed to offer technical support, subsidies, financial aid, and other essential services to assist startups in their growth journey and establish a strong presence in the global business landscape. Government support not only helps startups gain international recognition but also attracts foreign investors, boosting their growth potential.

India’s startup and MSME ecosystem has witnessed significant growth in recent years, bolstered by various government schemes aimed at nurturing innovation, entrepreneurship, and economic development.

What is a Startup?

While there isn’t a legal definition for the term ‘Startup,’ it generally refers to a newly established business enterprise that prioritizes innovation, scalability, and addressing unmet market needs. Typically founded by one or more entrepreneurs, startups often face high costs and limited revenue, leading them to seek capital from various sources.

Successful startups in India, such as Zomato, Ola, and Groww, exemplify this definition. It’s important to note that while this is a broad definition, eligibility criteria for government schemes may vary.

Here are the top five government schemes that are empowering Indian startups and MSMEs:

1. Startup India:

Startup India, initiated in 2016, stands as a premier undertaking of the Indian government, dedicated to fostering and advancing entrepreneurship nationwide. This initiative extends an array of benefits to startups, encompassing tax exemptions, funding assistance through the Fund of Funds, and streamlining of regulatory processes. Furthermore, Startup India facilitates networking avenues, mentorship, and incubation support, enabling startups to expand their operations successfully.

2. Atal Innovation Mission (AIM)

The government introduced the scheme in 2016 with the goal of promoting innovation by implementing new programs and policies to support startup growth across various economic sectors. Under the Atal Innovation Mission (AIM), around Rs. 10 crore is allocated to fund businesses over five years. This scheme is open to all emerging organizations in sectors such as health, agriculture, education, transportation, and more.

3. MSME Sambandh:

The Ministry of Micro, Small, and Medium Enterprises launched MSME Sambandh, an online portal, to serve as a platform for MSMEs to register and access a range of government schemes and benefits. Through this portal, MSMEs can not only obtain information on government policies, schemes, and initiatives but also connect with other MSMEs for networking and collaboration opportunities.

4. Pradhan Mantri Mudra Yojana (PMMY):

PMMY, a government scheme, focuses on offering financial assistance to micro-enterprises and startups through loans from various financial institutions. Startups and MSMEs can benefit from this scheme by availing loans up to Rs. 10 lakhs without any collateral, easing their access to essential capital for initiating or expanding their businesses.

5. Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGTMSE):

The government launched CGMSE, a credit guarantee scheme, to offer collateral-free credit facilities to MSMEs. This scheme allows startups and MSMEs to access credit up to Rs. 2 crores without requiring collateral or a third-party guarantee. CGMSE aims to simplify credit access for MSMEs, promoting entrepreneurship and fostering economic growth.


In summary, these government schemes are pivotal in bolstering the growth of startups and MSMEs in India. By providing financial assistance, incentives, and a favourable regulatory framework, these schemes empower entrepreneurs to fulfil their aspirations and contribute to India’s economic progress.

These initiatives not only support existing startups and businesses but also inspire and motivate aspiring entrepreneurs, students, and leaders across various sectors to embark on their entrepreneurial journey. They aim to foster an Aatma nirbhar Bharat (self-reliant India) by encouraging the talent of India to innovate, implement new ideas, and transform them into successful ventures.

These efforts have yielded significant success, with India ranking third globally in the number of startups, reflecting the positive impact of these schemes in nurturing entrepreneurship and fostering a culture of innovation in the country.

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