Central Government Schemes for Entrepreneurship Development

The Government of India has launched several flagship schemes over the last decade specifically to encourage new enterprise creation, ease access to finance, and build an innovation ecosystem.

Startup India, launched on 16 January 2016 and administered by DPIIT, is the umbrella initiative for building a strong startup ecosystem in the country. An eligible new-age enterprise can apply for DPIIT recognition, after which it becomes entitled to benefits such as a tax exemption for three consecutive financial years out of its first ten years since incorporation (under Section 80-IAC of the Income Tax Act), access to a Fund of Funds for Startups — a corpus operated through SIDBI that invests in other venture capital funds rather than directly in startups, so as to catalyse private venture funding — and simplified, self-certification-based compliance under specified labour and environment laws so that a young company spends less time on paperwork and more on its business.

Stand-Up India, launched on 5 April 2016, focuses on widening who gets to become an entrepreneur. It requires every bank branch to facilitate at least one loan, between ₹10 lakh and ₹1 crore, to at least one Scheduled Caste or Scheduled Tribe borrower and at least one woman borrower, for setting up a greenfield enterprise — a first-time venture, not an expansion of an existing one — in manufacturing, services, or trading.

The Pradhan Mantri Mudra Yojana (PMMY), launched on 8 April 2015, addresses the financing gap faced by very small, non-corporate, non-farm enterprises that banks have traditionally found too small or too risky to fund on ordinary terms. Loans up to ₹10 lakh are extended through banks, non-banking financial companies, and microfinance institutions, refinanced by MUDRA (Micro Units Development and Refinance Agency). PMMY loans are grouped into three categories by the stage of the borrowing unit's growth, summarised below.