MSME Schemes For New Businesses – Everything To Know

The Government of India as well as the Ministry of MSME have introduced several innovative government programs and programs aimed at empowering Indian entrepreneurs and MSMEs. This article has reviewed the top 5 government programs for startups and small businesses that can help them develop and expand.”

Are There Any MSME Schemes For New Businesses?

The Government of India is very consistent when it comes to Micro, Small, and Medium Enterprises (MSMEs) and businesses: they must be nourished, safeguarded, and promoted for the good of India.

The Indian government expects MSME’s contribution to GDP to reach 50% by 2024, up from the present 29%, and to employ 15 crore Indians, up from the current 11 crores. That’s why the Ministry of Micro, Small, and Medium Enterprises has created many government initiatives aimed at providing new assistance as well as a framework for sparking more development for new entrepreneurs enterprises.

Startups and SMEs are the bedrock on which the government’s Atma Nirbhar mission, as well as the Make In India vision, will flourish – creating more jobs, boosting exports, raising the average standard of living for millions of Indians, and strengthening India’s worldwide position.

India is one of the fastest-growing business ecosystems on the planet, particularly for IT startups. The year before, venture capitalists invested a career-high $48 billion in Indian businesses and expansion plans.

As a result, India is in a unique situation right now, in which both the government and private financiers want Indian entrepreneurs, startups, and MSMEs to flourish and stake their claims around the globe. In this effort, the Indian government and the Ministry of Micro, Small, and Medium Enterprises have developed several term institution initiatives and programs aimed at empowering Indian startups and MSMEs.

Government Programs For Startups And Small Businesses

Here are the top five government programs for startups and small businesses that can enable them to grow and expand:

1. Pradhan Mantri Mudra Yojana

Pradhan Mantri Mudra Yojana (PMMY) is a scheme launched by the Prime Minister of India.

PM Modi announced the Pradhan Mantri Mudra Yojana, under which MUDRA Banks offer low-interest credit to microfinance banks and non-banking financial firms, which in turn give low-interest loans to entrepreneurs and MSMEs. As a result, the Pradhan Mantri Mudra Yojana is a one-of-a-kind fund of funds designed to encourage Indian businesses. The MUDRA initiative allows for loans of up to Rs 10 lakh.

It was introduced in 2015, and within two years, it had created over 1.8 crore jobs through loans as well as businesses developed through MUDRA. More than 67 lakh loans worth Rs 48,000 crore have indeed been granted under the MUDRA scheme as of August 14th, 2020.

There are three types of firms that can make use of the MUDRA loan for startups:

Category 1: Shisha, which is for start-ups. Loans of up to 50,000 rupees are available.

Category 2: Kishor, a middle-aged company, falls within category 2. It is possible to get a loan of up to Rs 5 lakh.

Category 3: Tarun, which is a well-established and well-versed company. Loans of up to Rs ten lakh are available.

2. Micro and Small Business Credit Guarantee Trust Fund (CGTMSE)

The CGTMSE program has been one of India’s largest startup loan programs, launched by the Ministry of MSME. Eligible entrepreneurs and MSMEs can get a collateral-free credit of up to Rs 1 crore under that same government initiative.

The credit is disbursed by the Ministry of MSME and Small Industries Development Bank of India’s Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) (SIDBI).

3. ZED Certification Scheme

In the ZED Certification Scheme, financial assistance is provided to SMEs. The objective of ZED, or Zero Defect and Zero Effect, is to inspire manufacturers to produce better products with high reliability as well as zero faults. It focuses on new and existing production units. 

The goal is for firms to be able to adopt world-class production techniques and employ technologies to improve that their goods are the finest in class. The federal program will provide federal aid as well as expertise and resources to ensure that their products are defect-free.

4. Credit Linked Capital Subsidy for Technology Upgrading (CLCSS) plan

The Indian government recognizes that innovation is the instrument that would enable Indian entrepreneurs and MSMEs to engage with global competition. This is why the government created the Credit Linked Capital Subsidy for Technology Upgrading (CLCSS) plan, in which the government helps MSMEs improve their technology to transform cutting-edge information systems for their businesses.

The government gives a 15% subsidy for investments up to Rs 1 crore in technology upgrades for businesses and MSMEs in India under the CLCSS. This federal program covers almost 7500 products and services.

5. Design Clinic for Design Expertise to MSMEs

Style and creativity are essential in any industry, and every entrepreneur and small business should take a design-centric approach to fix their niche’s challenges. The MSME Ministry has established a Design Clinic for instilling design-related skills for startups and MSMEs to promote and motivate small enterprises to explore and test out creative features for their goods.

The government would grant up to Rs 60,000 in aid for visiting design seminars and up to Rs 3.75 lakh, or 75% of the cost of a seminar, where the entrepreneurs and/or their staff can apply the knowledge of design concepts and understand further about them, underneath this federal program. Entrepreneurs can study the newest design styles and technologies, connect and engage with other designers and business people, and gain a deeper understanding of design mindset and theories through this program. MSMEs, new firms, startups, and organizations can register for the design clinic online and gain access to a new creativity site.

The Bottom Line

The Government of India and the Ministry of MSME have launched StartupIndia, a large portal that gives perspective and current businesses a great deal of information and tools for their startups, companies, and MSMEs.

Entrepreneurs can learn further about Patents, Copyright Issues, Best Selection Processes, Research Reports, all Startup Loan Schemes, Entrepreneurship Development Programs, and other topics by visiting this website.