Government Schemes For Startups Startup Funding

What is “Government schemes for startups”?

The Modi government has come up with various government schemes for startup in India. These government schemes are focussed to increase and improve the startup community and entrepreneurship in India. These provide a wide range of financial and infrastructural support to the Indian startups.

Following are the government schemes for startups in India:

1. MUDRA Loan

This is also known as Pradhan Mantri Mudra Yojana. This the primary government scheme for startup business loan. The Micro Units Development and Refinance Agency or MUDRA, is a non-banking finance company that provides funds to micro and small enterprises. It is applicable for manufacturing, trading, and even allied agricultural services, no collateral/security is required to avail this loan, and there is no subsidy in this government scheme. There are three schemes in mudra loan, Shishu (loan up to 50,000), Kishor (Loan between 50,000 and 5 lakh), and Tarun (Loan between 5 lakh and 10 lakh). small business owners, micro-units and MSMEs can easily avail this government scheme to start new businesses or to grow their existing business.

Documents Required for Pradhan Mantri Mudra Yojana 

  • Mudra Loan application form.
  • Vehicle loan application form.
  • 2 passport size colour photographs.
  • Photo Identity proof.
  • Address proof.
  • Income proof.
  • Bank statement (last 6 months)
  • Business plan
This is the most relevant and easily applicable government schemes for startups.


The National Bank for Agriculture And Rural Development provides loans for agriculture and village industries. provides funding services for the development of food parks and food processing units in designated food parks. This a focused government scheme for startups in India. Those who completed Bachelor’s Degree in any subject from a recognized University with a minimum of 50% marks (SC/ST/PWBD applicants – 45%) in aggregate or Post Graduate degree with a minimum of 50% marks (SC/ST/PWBD applicants – 45%) in aggregate or Ph. D can apply for this loan, to implement and regulate financial assistance in rural area NABARD work in conjunction with the RBS.

3. Credit Guarantee Scheme

The Credit Guarantee Fund Trust for Micro and Small Enterprises provide zero collateral loan to micro and small industries. SME and MSME sector are eligible for this government scheme, startups can avail this loan with the subsidized interest rate, up to Rs. 200 lakhs can be given to MSMEs with this government scheme. Special preference is given to the women entrepreneurs who are eligible for this government scheme

 Some entities are excluded from the CGTMSE coverage. They are documents required to apply for CGS government scheme for startups in India:

  • Retail Trade.
  • Educational Institutions.
  • Agriculture.
  • Self Help Groups (SHG).
  • Training Institutes.

4. Stand Up India Scheme

The stand-Up India scheme mainly focused on women entrepreneurs as well as those from Scheduled Caste (SC) or Scheduled Tribe (ST) communities. bank loans between 10 lakh and 1 Crore will get through this government scheme for Greenfield ventures in manufacturing, trading, and service units. Beneficiaries will get a subsidy of 10,000/- or 50% of the unit cost, whichever is less. The loan can be provided as working capital with a maximum return period of 7 years with a maximum moratorium period of 18 months.

5. AIC

Atal Incubation Centres was established by Atal Innovation Mission to innovative start-up businesses in their pursuit to become scalable and sustainable enterprises. Academic institutions such as higher educational institutes, R&D institutes, etc. as well as non-academic institutions such as corporate sector enterprises, alternative investment funds registered with SEBI, business accelerators, groups of individuals, and individuals, etc are eligible to apply for this government scheme. AIC provides a grant-in-aid of 10cr with a maximum 5-year duration.


Credit Linked Capital Subsidy Scheme is for updating the technology used in micro and small enterprises. This government scheme is useful for the manufacturing unit those who wish to buy the latest technology equipment. MSEs are required to apply online through Primary Lending Institutions (PLIs), from where the MSEs avail term loan with subsidy in this government scheme.

  • Aadhar card / Voter ID / PAN card
  • Address proof
  • Business proof
  • Recent photographs
  • KYC documents

7. Raw Material Assistance

Raw Material Assistance Scheme launched by National Small Industries Corporation aims to assist manufacturers and MSMEs with procuring raw materials, both indigenous & imported up to 180 days. This government scheme helps the manufacturers to focus on the quality of their products, as they can avail low-interest loans and financial help to get raw materials. Security in the form of Bank Guarantee from Approved Banks need to get this loan.

8. PMEGP Scheme

Prime Minister’s Employment Generation Programme (PMEGP) is a credit-linked subsidy programme by the Ministry of Micro, Small and Medium Enterprises, Government of India. Khadi and village industries commission implemented the scheme at the national level with a subsidy of 15-35% of the project cost, with free from collateral security up to Rs.10.00 lakhs. Rs 25 lakh for a manufacturing unit and Rs 10 lakh for a Service unit is the maximum project cost allowed under the scheme. The cost of land is not counted for calculating the project cost.  25% is the admissible government subsidy for the general category and 35% for the special category, which includes SC/ST/OBC/Minorities/Women/Ex-servicemen, Physically handicapped, NER, Hill and Border areas in rural areas, . The admissible subsidy rates for both categories in urban areas are 15% and 25% respectively. Beneficiary above 18 years, passed at least 8th standard are eligible for the government scheme.

 Here are some documents you may need to produce when applying for the PMEGP loan scheme:

  • Aadhaar card
  • PAN card
  • Project report
  • Caste certificate
  • Special category certificate, if required
  • Rural area certificate
  • Education/ skill development training/ EDP certificate
  • Authorization letter

9. Marketing Promotion Schemes

Procurement And Marketing Support Scheme (P&MS). P&MS helps to develop domestic markets and promotion of new market access initiatives. Also, educate various facets of business development. P&MS creates awareness about the latest market technique and other such related topics, trade fairs, etc. Individual manufacturing / service MSEs can apply for this government scheme.

Marketing Assistance Scheme

 The marketing assistance scheme provides assistance about participation in international exhibitions or trade fairs, & exhibitions organised by other organisations/industry/agencies, also organising intensive campaigns and marketing promotional activities & organising buyer-seller meets. MSMEs, Industry Associations, and other organisations related to the MSME sector can apply for this government scheme.


Please click this link to know “how to apply for Bank loan“.