Best 10 Government Programs to Start a Business in India
India has rapidly emerged as one of the world’s fastest-growing startup ecosystems, strongly supported by progressive government policies and funding programs. From early-stage entrepreneurs with innovative ideas to startups ready for scale, the Indian government offers a wide range of schemes designed to provide financial assistance, mentorship, tax incentives, and easier access to credit.
Awareness of these government programs can significantly reduce startup costs, minimize financial risk, and accelerate business growth. Below are the 10 best government programs for entrepreneurs and startups in India that every founder should know.
1. Startup India Initiative
Launched by the Government of India, the Startup India Initiative forms the foundation of the country’s startup ecosystem. Startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) gain multiple benefits, including income tax exemption for up to three years, self-certification under labor and environmental laws, faster patent processing, and easier participation in government tenders.
This scheme is ideal for early-stage startups seeking credibility, regulatory ease, and long-term growth support.
2.Startup India Seed Fund Scheme (SISFS)
The Startup India Seed Fund Scheme supports startups at their most critical early stage, when raising capital is often the most challenging. The scheme provides funding for idea validation, prototype development, proof of concept, and market entry.
Funds are routed through government-approved incubators, making it particularly suitable for innovation-driven and technology-focused startups.
3. Fund of Funds for Startups (FFS)
Managed by SIDBI, the Fund of Funds for Startups has a total corpus of ₹10,000 crore. Instead of directly investing in startups, the fund invests in SEBI-registered venture capital funds, which then invest in promising startups.
This program has helped thousands of startups raise growth capital and expand across sectors such as fintech, healthtech, edtech, and SaaS.
4. Pradhan Mantri MUDRA Yojana (PMMY)
The MUDRA Loan Scheme targets micro and small entrepreneurs who require working capital or funding to start a small business. Loans are offered under three categories—Shishu, Kishore, and Tarun—with funding of up to ₹10 lakh.
A major advantage of this scheme is that the loans are collateral-free, making them highly accessible to first-time entrepreneurs.
5. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
Arranging collateral is one of the biggest challenges startups face while seeking loans. CGTMSE addresses this issue by providing credit guarantees to banks and financial institutions.
This encourages lenders to offer collateral-free loans of up to ₹2 crore to eligible startups and MSMEs, significantly improving access to formal credit.
6. Stand-Up India Scheme
The Stand-Up India Scheme promotes entrepreneurship among women and SC/ST communities. Under this scheme, bank loans ranging from ₹10 lakh to ₹1 crore are provided to establish greenfield enterprises in manufacturing, services, or trading.
This initiative plays a crucial role in promoting inclusive economic growth and social empowerment.
7. Prime Minister’s Employment Generation Programme (PMEGP)
PMEGP is a credit-linked subsidy program aimed at generating self-employment opportunities. It provides financial assistance to set up new micro-enterprises in both rural and urban areas.
Eligible entrepreneurs can receive subsidies ranging from 15% to 35% of the project cost, making it especially beneficial for small manufacturing and service-based businesses.
8. Atal Innovation Mission (AIM)
The Atal Innovation Mission focuses on building a strong culture of innovation and entrepreneurship in India. Through Atal Incubation Centres (AICs) and Atal Tinkering Labs (ATLs), AIM provides infrastructure, mentorship, funding access, and networking opportunities.
It is particularly useful for startups working in deep-tech, artificial intelligence, robotics, and sustainable technologies.
9. SAMRIDH Scheme
Launched by the Ministry of Electronics and Information Technology, the SAMRIDH Scheme supports digital and technology startups. It offers funding support, structured accelerator programs, mentorship, and market access through partner accelerators.
This scheme is highly beneficial for tech-oriented startups aiming to scale both domestically and globally.
10. Startup Credit Guarantee Scheme (SCGS)
The Startup Credit Guarantee Scheme is designed specifically for DPIIT-recognized startups. It provides credit guarantees on loans, enabling startups to secure larger funding amounts without collateral.
This scheme is especially helpful during the scaling phase, when capital requirements increase rapidly.
Conclusion
Government schemes play a vital role in reducing financial risk, improving access to funding, and fostering innovation within India’s startup ecosystem. Whether you are launching a new business or expanding an existing one, leveraging these programs can provide a strong foundation for long-term success.
To maximize benefits, entrepreneurs should carefully review eligibility criteria and apply through official government portals.
