With an increasing interest towards entrepreneurship, the startup sector in India has received a massive boost in recent times. Therefore, it is no wonder this country is currently the third-largest ecosystem for such developing organisations.
Due to macroeconomic factors, funding is hard to come by for startups in 2023. This ongoing funding winter has ensured that the Indian government take concrete steps to infuse confidence & capital into the Indian startup economy.
This blog compiles a list of the most popular government funds that founders should apply for in case, they are looking to raise funding .
List of Top Government Funds for Startups
Some of the most notable undertakings by the government to aid the entrepreneurs of this country had been discussed below:
- Startup India Seed Fund Scheme (SISFS)
During the early stage of its business proceedings, a competitively new company can face significant fiscal challenges when it comes to producing prototypes for its final products or running a trial for the same.
To ensure a startup can seamlessly conduct these aforementioned ventures from the outset of its market entry, the government launched the SISF scheme. As per the guidelines of this policy, a business can receive up to ₹20 lakh rupees for its research and development measures.
- Startup India Initiative
This govt funding for startups applies to private limited enterprises, LLPs, and registered partnership firms of this country. As a result, the scheme has so far recognised around 50,000 businesses to be eligible for the benefits provided by this initiative.
In simpler terms, the primary target of this scheme is to reduce financial burdens on small businesses by safeguarding them from the cascading effects of taxation. Therefore, companies under the purview of this scheme can enjoy significant tax exemptions while also getting a chance to enrol in courses and mentorship programmes which can pave the way for sustainable development.
Interestingly, with the emergence of several neo-banking facilities, it has become hassle-free for startups to remain tax compliant. For instance, with RazorpayX Tax Payments, you can have a one-stop solution to all your concerns. With the state-of-the-art dashboard of this platform, auto-paying your tax is now possible in a matter of minutes.
An acronym for A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship, (ASPIRE) is an initiative by the government of India aims to help entrepreneurs become large-scale employers. As a way to strengthen the countryside economic status of this nation, ASPIRE has taken pivotal steps to establish technological and incubation centres throughout rural India for MSMEs.
A larger portion of this country’s overall fiscal capabilities depends on its agricultural output capacity. Therefore, this govt fund for startups encourages newer inventions in the field of AgriTech via substantial grants to cover the expenditures required for plant and machinery.
- Venture Capital Assistance Scheme (VCA)
The VCA was launched by government bodies to ensure a startup can secure substantial working capital without falling into a debt trap that can hinder its future aspects. With a ceiling of ₹50 lakh as the maximum amount providable as a loan, govt fund for startups scheme primarily caters to the agri-business industry. It ensures that a zero-interest line of credit is available for the entrepreneurs of the farming sectors from the financial institutions of India for a longer repayment window.
Other than the schemes mentioned above, the Indian government overlooks several other projects which can come in handy for newfound corporations regarding their fundraising ventures. Some of these govt funds for startups include the following:
- Pradhan Mantri Mudra Yojana (PMMY)
- Qualcomm Semiconductor Mentorship Program (QSMP)
- ATAL Innovation Mission
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
- Single Point Registration Scheme
- Modified Special Incentive Package Scheme (M-SIPS)
- Zero Defect Zero Effect (ZED) Certification Scheme
- Design Clinic Scheme for Design Expertise
- Dairy Entrepreneurship Development Scheme
- Credit Linked Capital Subsidy for Technology Upgradation (CLCSS)
How Can RazorpayX help startups with Funding?
RazorpayX, the business banking arm of Razorpay is on a mission to reimagine business banking for startups. During our outreach activities, most founders stated that getting their foreign-raised funding back to India is a major challenge. RazorpayX is solving this with their new service called RazorpayX Forex.
This new service aims to take care of all your foreign capital inflow back to India with compliance taken care by forex experts that specialise in working with startups.
Forex with RazorpayX is fast, compliant & transparent. Check out what startups that successfully raised foreign funding have to say about the RazorpayX Forex Experience.
Frequently Asked Questions
1. How many startup companies are currently operational in India?
The number of startups in India has increased thanks to sustained government initiatives in this regard. According to the recent data, there are 84,012 startups in India as of November 2022.
2. What is the market size of the Indian startup industry?
The total market size of India’s startup sector is over USD 340 billion. The country has emerged as the third largest startup ecosystem in the world as of September 2022.
3. How many startups in India have currently reach a unicorn status?
As many as 108 startups in India have been recognised as unicorns till date. The most popular unicorns being Paytm, Flipkart, Cred, Groww, Upgrad & Razorpay.