The government of India has announced a number of schemes and initiatives in the last two decades in order to boost startups in India. These schemes mainly aim to boost innovation, create jobs, promote entrepreneurship as a career, boost economic growth, and promote digitalisation. The overarching objective is to make India a leader in innovation and entrepreneurship.
These schemes are specific to sectors, industries and purposes. Some, for instance, engineering-related schemes, are mainly offered by the
- National Science and Technology Entrepreneurship Development Board (NSTEDB),
- National Innovation Foundation (NIF), and
- The National Small Industries Corporation (NSIC).
Therefore the application process, eligibility criteria and compliance regulations for each of these schemes are different.
Startups should first identify a relevant scheme
Before applying to any scheme, determine which schemes are relevant to your startup. You can do this by studying different schemes available on government websites. An exhaustive list of 124 schemes currently being offered by the Indian government for startups can be found here.
The eligibility criteria for availing government schemes for startups in India can vary depending on the specific scheme and the government agency that is managing the scheme. However, some general eligibility criteria that are common across most schemes include:
- Incorporation: The startup should be incorporated in India as a private limited company, partnership firm, registered society, or LLP.
- Age of the Startup: The startup should be less than 7 years old from the date of incorporation.
- Innovation: The startup should be working on a new product, process or service that is innovative and has the potential for scaling up.
- Sectoral focus: Some schemes have specific sectors they are focusing on, like clean energy, healthcare, transportation, and so on. Startups working in these sectors are eligible to apply.
- Turnover: Startups should have an annual turnover of less than 25 crore INR
- Intellectual property: Some schemes require the startup to have applied for or obtained intellectual property rights such as patents, trademarks, or copyrights.
- Impact analysis: Some schemes require the startup to demonstrate the social or economic impact of their business.
- Compliance: Startups should comply with the laws and regulations of the country.
Eligibility criteria for high-risk, high-reward schemes
The Startup India website emphasizes 3 main points for the eligibility of the ‘High-Risk High Reward’ scheme that is:
- The applicant should be an Indian citizen residing in India.
- The applicant(s) must hold a regular academic/research position in a recognized institution.
- The proposals can be submitted by an individual or by a team of investigators. Proposals submitted by a team of investigators must identify a Principal Investigator, who will spearhead the research objectives and administer the grant.
Necessary documents for startups
To apply for a scheme, you will need to submit certain documents, such as a proposal, business plan, financial statements, and other relevant documents. Make sure that you have all the necessary documents ready before you apply.
- Proposal or a Business Plan: A detailed document that outlines the idea, nature of your business, the products or services you offer, your target market, your financial projections, and your plans for growth.
- Financial Statements: This could include your balance sheet, income statement, cash flow statement, and other financial documents that provide an overview of your startup’s financial position and performance.
- Incorporation Documents: This could include your registration certificate, PAN card, GST registration certificate, and other documents that establish the legal identity of your startup.
- Identity and Address Proof: This could include a PAN card, Aadhaar card, Voter ID, or Passport of the promoter(s) or the startup.
- Proof of Intellectual Property: This could include patents, trademarks, or copyrights that your startup holds or has applied for.
- Proof of Innovations: This could include any technical reports, prototypes, or proof of concept that demonstrate the innovation behind your startup.
- Any other relevant documents as specified by the scheme.
Example of a ‘StartUp Research Grant’ scheme
The Science and Engineering Research Board (SERB) is one of the leading institutions offering assistance to startups that focuses on research related to science and engineering domains. The key document required to avail of schemes offered by the SERB is a research proposal.
Once you have identified the relevant schemes and prepared the necessary documents, you can apply for the scheme. The application process can vary depending on the scheme, but it typically involves submitting the application form and the necessary documents online or in person.
- Prepare the necessary documents: Gather all the necessary documents, such as a business plan, financial statements, and incorporation documents, as required by the scheme.
- Fill out the application form: Fill out the application form for the scheme, which can typically be found on the website of the relevant government agency. Some forms are to be filled out online while some are to be filled out offline.
- Submit the application: Submit the application form and the necessary documents to the relevant government agency. This can usually be done online or in person, depending on the scheme.
- Follow-up: After you have submitted your application, you may need to follow up with the relevant government agency to ensure that your application is being processed.
- Compliance: Once you have availed of the benefits of the scheme, you will be required to comply with the terms and conditions of the scheme. This could include submitting regular reports or audits or meeting certain performance targets.
The Pradhan Mantri Mudra Yojana offers three types of loans, depending upon the stage of the startup. The application form for each loan type is different and can be found on the Mudra official website.
After you have submitted your application, follow up with the relevant government agency to ensure that your application is being processed. You will be notified by the agency if you have been selected to receive the benefits.
Once you have availed of the benefits of the scheme, you will be required to comply with the terms and conditions of the scheme. This could include submitting regular reports or audits or meeting certain performance targets.
It’s important to note that the process and requirements may vary depending on the scheme and the government agency that is managing the scheme. It is always a good idea to check the official website of the scheme for the most up-to-date information and to contact the relevant government agency for any additional queries.